What are ways to incentivize people and companies to protect water quality and supply?
Voluntary action, regulatory limits, water trading and more recently, psychological "shaming"
At least four approaches have been taken:
1) Voluntary - call by government on people to voluntarily reduce their water withdrawal - often happens in communities experiencing drought.
2) Shaming - more recently, some jurisdictions have notified heavy users of water who are not voluntarily reducing water that the government intends to publish their names on the Internet if they don't reduce their water usage. This has been found to be very effective.
3) Water can sometimes be rationed out with users given certain amount of water which they can use or trade with others. Fines if they use more than their quota.
4) water quality is usually protected by government limits for certain quality parameters (e.g. solids, fecal matter, etc).