We have talked a lot in class about the water-energy nexus. In fact, there was an entire lecture dedicated to the topic. I think this is a fascinating study.
Water is essential for all organisms, and is required by every sector of our society/economy. Electricity generation, refining, manufacturing, and construction uses large quantities of water. The U.S. is blessed with enough rain that water scarcity issues don't cross the minds of many Americans. However, in the western U.S. and in Australia, South Africa, northern Africa, and the Middle-East, significant water concerns arise from the cost and/or lack of freshwater supplies. Water scarcity, unlike the dangers from global warming, are real, quantifiable, and truly a matter of life or death.
Therefore, countries around the world and states in this country ought to promote greywater reuse in populated areas as a viable option to conserve water. Greywater can be recycled to irrigate lawns, irrigate parks and golf courses, fill fountains, and flush toilets in buildings and houses. Some home builders are already jumping on the "green" marketing band-wagon to sell their eco-friendly pre-fab houses (http://greeninc.blogs.nytimes.com/2009/02/11/reinventing-modular-housing-as-green/?scp=2&sq=greywater%20reuse&st=cse). The California companies manufacturing the homes mentioned in the article are selling houses that already include rainwater collection devices, greywater reuse treatment and plumbing, and tankless water heaters.
In terms of policy, states (or countries abroad) can offer tax rebates to people that buy grewater treatment devices for domestic or commerical purposes, can discount property taxes of those individuals or corporations that recycle greywater for flushing toilets, and can promote water conservation at public fairs that highlight the effectiveness and cost savings of greywater reuse. Austin Water Utility even has a toilet replacement program where you can receive a water efficient toilet that uses 1.6 gallons per flush for your old bowl (http://greeninc.blogs.nytimes.com/2009/02/11/reinventing-modular-housing-as-green/?scp=2&sq=greywater%20reuse&st=cse). Even though some urban areas in Florida, California, and Texas are improving conservation measures, more studies need to focus on cutting plumbing (requires energy to move water) and treatment (requires energy) costs. Currently, the price of water in the U.S. is too low for greywater reuse to gain widespread acceptance. People in the U.S. do not value water enough to go out of their why to save or recycle it.