D.  Water

1.  Water facts

• Earth's water - oceans = 97%, fresh water = 3%

• Fresh water - glaciers and ice caps = 70%, underground aquifers = 29%, rivers and lakes = 1%

• Hydrologic cycle

.

• Surface water renewable, but aquifers not on a human time scale

• 2,000 cubic meters of water needed per person per year

• Water distributed unevenly geographically and seasonally

.

2.  Classification of scarcity

a.  Water stressed - countries where freshwater supplies are between 1,700 and 1,000 cubic meters per person per year

b.  Water scarce - countries where freshwater supplies are less than 1,000 cubic meters per person per year

c.  Absolute water scarcity - countries where freshwater supplies are less than 500 cubic meters per person per year

.

Water availability per region 2012

• Region	Cubic meters per person (average)
  Middle East and North Africa	500
  Sub-Saharan Africa	1,000
  Caribbean	2,466
  Asia /  Pacific	2,970
  Europe	4,741
  Latin America	7,200
  North America (including Mexico)	13, 401

.

3.  Water demand

• Global water withdrawals - agriculture = 70%, industry = 20%, domestic = 10%

• 20% of cropland requires irrigation, produces 40% of food

• U.S. - irrigation = 41% of water withdrawals, industry (including electricity generation) = 46%

.

a.  Virtual water

• Water use inbedded in a good or service throughout the production process

.

• Water footprint - total amount of water consumed by a human entity, including virtual water

National Water Footprint for Selected Countries, 1997–2001 (in Cubic Meters per Person per Year)

.

b.  Virtual water trade

• Virtual water means trade in goods leads to trade in water

.

• Exporting virtual water affects local hydrological cycle

.

c.  Projected water demand

• Global water demand expected to increase by 55 percent between 2000 and 2050

• Most growth will be in developing countries

• Access to safe drinking water expanding in developing countries

Global Water Demand, 2000 and 2050

.

4.  Dealing with water shortages

a.  Increasing water supplies

(1)  Extracting groundwater from aquifers

• Extraction is exceeding recharge

• Key aquifers becoming depleted

.

(2)  Building dams

• Captures floodwater, prevents flooding

• Provides hydroelectric power, irrigation, and recreation

• Environmental and social damage - reduces biodiversity, reduce fish population, lower crop production, disrupt flow of nutrients, contribute to global warming, affect water supplies, displace population

.

(3) Desalination

• Remove salt from seawater

• More expensive than surface water and groundwater

.

b.  Managing water demand

(1)  Microirrigation

• Use small amounts of water closer to plants

• More efficient than traditional irrigation

.

(2)  Recycling and reuse of wastewater

• "Graywater" - laundry and bathing water can be reused for irrigation

.

(3)  Water use standards

• Dishwashers, washers, toilets, showerheads

.

(4)  Conservation

• Cheapest way to address water shortages

• Nonprice approaces:

(a)  Required or voluntary adoption of water conserving technologies

• Set standards, offer rebates, free items (e.g., showerheads)

.

(b)  Mandatory water use restrictions

• Limits on lawn watering, washing cars, filling swimming pools

.

(c)  Education and information

• Mailings, public events, public service messages

.

(d)  Innovative institutional design of common-property resources

• Traditional patterns of communal water use

.

c.  Water pricing

• Water utilities either publicly or privately owned

• Average cost pricing is usually used - set price equal to average cost

• Efficiency requires price = marginal cost

• Natural monopoly:

.

.

.

.

.

.

.

.

.

.

.

• Water use often subsidized

.

(1)  Groundwater

• Nonrenewable resource

• External cost on future generation if water used in current generation

.

.

.

.

.

.

.

.

.

.

(2)  Welfare impacts

• External cost due to environmental impacts

.

.

.

.

.

.

.

.

.

.

(3)  Pricing structure

(a)  Uniform rate structure - price per unit is constant

(b)  Increasing block structure - price per unit increases as amount used increases

(c)  Decreasing block structure - price per unit decreases as amount used increases

.

.

.

.

.

.

.

.

.

.

• U.S. - 32 percent uniform, 28 percent decreasing, 40 percent increasing

• International - 49 percent increasing, 47 percent uniform, 4 percent decreasing

• Increasing block structure encourages conservation

• Rising water rates disproportionately affects low income households

.

5.  Water markets

• Difference between value and price

• Water should go to high value uses

.

a.  Water rights

• Riparian water rights - water rights based on adjacent land ownership

• Prior appropriation water rights - water rights based on established beneficial uses (use of water for productive purposes)

.

.

.

.

.

.

- Not economically efficient

- Discourages conservation - if not used, allocation could be reduced

.

b.  Privatization

• Promoted by World Bank and International Monetary Fund (IMF)

- Private companies supposed to be more efficient

- Could lead to price increases, overuse

• Opposition has led to re-municipalization of water provision

- Manage water as a common property resource

.

• Water is both a private and a public good

• Need to consider ecological cycles, economic efficiency, and social functions of water

.