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Water: Economics and Policy
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by Anne-Marie Codur, Jonathan M. Harris, and Brian Roach
Global Development And Environment Institute Tufts University
Medford, MA 02155 http://ase.tufts.edu/gdae
A GDAE Teaching Module on Social and Environmental
Issues in Economics
Copyright © 2015 Global Development And Environment Institute, Tufts University. Copyright release is hereby granted for instructors to copy this module for instructional purposes. Students may also download the module directly from http://ase.tufts.edu/gdae. Comments and feedback from course use are welcome: Global Development And Environment Institute Tufts University Medford, MA 02155 http://ase.tufts.edu/gdae E-mail: gdae@tufts.edu
Anne-Marie Codur, Jonathan M. Harris, and Brian Roach are Researchers at the Tufts University Global Development and Environment Institute, Medford, Massachusetts.
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Water: Economics and Policy
Water is the driving force of all nature. — Leonardo da Vinci
1. GLOBAL SUPPLY AND DEMAND FOR WATER Water is a unique natural resource that forms the basis for life on Earth. Two thirds of the planet’s surface is covered by oceans. 97% of the Earth’s water is salt water and only 3% is freshwater – 70% of which is in solid form, captured by the polar ice caps and by glaciers (Fig. 1). Of the 30% of freshwater that is available in its liquid form, most is in underground aquifers. The freshwater that makes up all of the terrestrial sources such as rivers and lakes only represents 1% of the planet’s freshwater. Figure 1: The composition of the planet’s water
Source: Getting the picture: our changing climate – http://gettingthepicture.info/3/; http://www.unwater.org/downloads/Water_facts_and_trends.pdf
Water can be characterized as a renewable resource, since it can generally be reused indefinitely as long as it is not severely polluted. Also, water is continually purified in a process known as the hydrologic cycle (Fig. 2). Water evaporates from lakes, rivers, oceans, and through the evapotranspiration of living organisms, returning as precipitation that replenishes the freshwater sources, whether on the ground or underground.
The flows of freshwater that are recycled in the hydrologic cycle are at times
stocked in two types of natural reservoirs, bodies of surface water such as lakes and rivers, and stocks of groundwater, which are found in underground aquifers. While aquifers are
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replenished as a result of infiltration, most aquifers have very long replenishment times, making them essentially nonrenewable resources on a human time scale. Aquifers under the Sahara, for example, are thousands of years old, and are sometimes referred to as “fossil water.” Thus the analysis of water systems combines elements of renewable and non-renewable resource theory.
Figure 2: The Hydrologic Cycle
Evaporation fueled by the sun’s energy lifts 500,000 cubic kilometers of moisture
into the atmosphere each year—86 % from the oceans and 14 % from the land. An equal amount falls back to earth as rain, sleet, or snow, but it is distributed in different proportions: whereas the continents lose about 70,000 cubic kilometers through evaporation, they gain 110,000 through precipitation. As a result, roughly 40,000 cubic kilometers are transferred from the sea to the land each year. The total available supply of 40,000 cubic kilometers converts to about 5,700 cubic meters per person per year. Hydrologists have established that, considering the water needs of modern societies, a threshold of 2,000 cubic meters per person per year represents the level above which a population can be sustained comfortably.1 But while the total global water supply is sufficient to meet human needs, not all water can be captured for human use. As much as two-thirds of the total water supply runs off as floods. Some water must also be allocated to meet ecological demands, such as supplying wetlands and wildlife habitat.
According to the United Nations, an area is said to be experiencing water stress when annual water supplies fall below 1,700 cubic meters per person per year. 2 A region is said to face water scarcity when supplies fall below 1,000 cubic meters per person, and absolute water scarcity when supplies drop below 500 cubic meters per person per year.3
1 Postel, 1992. Hydrology is the scientific study of the distribution and movement of water on the earth’s surface, underground, and in the atmosphere.
2 Center for Strategic and International Studies, 2005. 3 U.N. Food and Agriculture Organization (FAO), 2012.
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Global water supplies are not evenly distributed geographically or seasonally. Some regions of the world have abundant water resources, while others suffer from a scarcity of water. The symptoms of physical water scarcity include severe environmental degradation, declining groundwater, and unequal water distribution, and they cause severe constraints on food production, economic development, and protection of natural systems.
In addition to physical scarcity, the concept of economic water scarcity relates to
situations where a lack of proper infrastructure in water distribution, water recycling and treatment, and sanitation, leads to inadequate water supply. This situation often causes the population to rely on unhealthy sources of water, with tragic health and mortality consequences, as is the case in large parts of Africa, where waterborne diseases are the leading cause of children mortality. Worldwide, 6000 children die each day as a result of diseases caused by ingestion of unsafe water.4 Figure 3 shows the countries that are already experiencing water stress or water scarcity in physical terms. The countries with the most limited water supplies are in North Africa and the Middle East. Water stressed countries include India, South Africa, and Poland. Figure 3: Global Freshwater Availability, 2007
Source: UNEP, 2008.
4 UNICEF, http://www.unicef.org/media/media_21423.html.
0″”””1000″””1700″””2500″”6000″”15000″70000″
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Cubic&meters&per&person&per&year
Water”scarce Water”stressed
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Figure 4 presents a more precise picture of water scarcity by displaying not only physical scarcity but also economic scarcity, showing that many African countries which are not water scarce in physical terms, are experiencing water economic scarcity and low access to clean water. Figure 4 also shows regional variability inside countries – The United States and Australia are on average well above the threshold of 2000 cubic meters of water per capita per year, but entire regions such as the US Western States and the Southeastern part of Australia are experiencing physical water scarcity. Figure 4: Physical Water Scarcity vs. Economic Water Scarcity
Reproduced by Worldwatch Institute, March 2013, http://vitalsigns.worldwatch.org/node/180.
Some of the most populated areas of the world are experiencing increasing water
stress and scarcity (see Table 1) and the problem will only intensify throughout the 21st century, under the growing pressures of population growth and climate change, which will worsen water availability in areas that are already arid and semi-arid.
The Middle East and North Africa region is the most water scarce (average 500 cubic meters per person per year) with a population of 432 million in 2007, expected to increase to 692 million in 2050.5 Sub-Saharan Africa already suffers from water scarcity (1000 cubic meters per person per year) with a current population of 936 million in 2013, expected to double by 2050.6
5 Population Reference Bureau, 2008 http://www.prb.org/Publications/Articles/2008/menafertilitydecline.aspx. 6 World Bank, http://data.worldbank.org/region/SSA; Population Reference Bureau http://www.prb.org/Publications/Datasheets/2013/2013-world-population-data-sheet/data-sheet.aspx
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Table 1: Water Availability per region (2012) Region Average water availability
(cubic meters/person) 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 Source: FAO, Aquastat (2013), UNESCO (2012) – from vitalsigns.worldwatch.org
To examine those challenges in more depth, we turn first to a more detailed analysis of the uses of water in modern human societies, and indicators that can be used to measure the impact of our water use. Uses of water
When considering the use of water, it is useful to think of water along three critical
dimensions: consumption, withdrawal, and quality.
Consumption refers to water that disappears or is diverted from its source, for example by evaporation, incorporation into crops or industrial processes, drinking water, etc. The source may or may not eventually be replenished. If replenished, the process could potentially take many years— decades, centuries, or longer.
Withdrawal refers to water that is essentially “sucked up” for a given use, but then
returned to its source. The quality of the returned water may or may not be the same as it was prior to removal.
Quality is a broad term that can refer to pollutants that enter the water; changes to
oxygen content, salinity, and acidity; temperature changes; destruction of organisms that live in the water; and so on.7
Considering these three dimensions of water, scientists have proposed a
decomposition of water into three categories of water that allow for a more precise analysis of human use of freshwater8:
Green water: the water that exists in flux in natural ecosystems, as clouds, mist,
rain, as well as the humidity that is captured by the soils and plants.
7 Definitions are adapted from Glassman, et al., 2011. http://www.nationalfoodhub.com/images/THE_WATER-ENERGY_NEXUS_REPORT.pdf>.
