Environmental Economics: Water Management (Part 3)

Years ago when I was a kid I always wanted a pool. I loved swimming, and figured my life would be brilliant if I could simply step outside and jump into some water. What little Alex forgot was pool maintenance. From ensuring no algae growth to the chlorination of the water causing little Alex to feel tired upon exiting of the pool, little Alex had his eyes set on the benefits without weighing the consequences of acquiring a pool.  Little Alex also had a secret fantasy of throwing his dog into the pool and watch him swim – but that’s another story.

 However, little Alex was a highly intelligent individual who decided a little research might help. So he wrote in stone that he would write an article on Water Management one day.

That anecdote has nothing to do with this topic except it includes water. Water Management is increasingly becoming more of a concern internationally as the concept of Water Wars becomes more and more of a possibility. Of the water resources on Earth, 3% is not salty. Of that 3%, 66% is locked up in glaciers and ice caps. So 1% of the world’s water is left for human use. However, 20% of this water is remote and inaccessible – so 0.8% of the world’s total water is used for human activities. 

Agriculture uses 70% of the world’s usable water, while approximately 2.8 billion people live in areas where there either is not physically enough water to meet demand or areas where there is lack of human investment or capacity to meet water demand.  Problematically, 50% of the world’s population now are urbanized which has led to traditional water resources being polluted with urban waste water. As a result, farmers who sell their crops to cities often use polluted water. Heavy metals, antibiotics, oestrogens and other elements may be present in the water which in turn affects the food consumed by urban dwellers. Sometimes, irrigation of crops are contaminated with bacteria or viruses which can lead to diarrhoea or cholera outbreaks.

Usually, pollution of water resources occurs near cities or areas where urban sprawl is present. Noted is the fact that other areas such as karstic aquifers located in the mountains of Europe have a high level of clean water, not affected by industrialization of the modern age.

Specific examples of water management can be located anywhere in the world. In Canada, the participants in the oil industry have a heavy hand in water management. It can take between 1.4 – 4 litres of water to extra a litre of synthetic crude while 4 million litres to bring a gas well into production. Additionally, fracking uses a large amount of water as the head of Shell stated that shale gas development could use twice as much water, as traditional production of gas.  Interestingly, the Canada West foundation released a report showing water issues are becoming an issue in the West, as droughts are appearing to be “more severe and more frequent”.

In the United States, a report was released comparing water rates. Interestingly, the cities in rain scarce areas have lower residential water rates, but a higher level of use.  Per capita water use is declining in most of the cities surveyed in the Circle of Blue report. Additionally, it is estimated by the EPA that $335 billion will be needed to repair America’s water infrastructure to ensure adequate supply.  It is hypothesized that since the demand for water has fallen, price will rise (as it already has) as revenue is based on per use.

With a large population, India is no stranger to water management problems.  There have been reports of wells drying out and states fighting with each other over supply. Rajendra K. Pachauri is the Director of the Energy and Resources Institute of India had an interesting comment regarding water privatization. He believes that water efficiency will only increase once the private sector becomes far more involved.  Simply put, politicians “need to change people’s mindsets. Everyone in this country [India] thinks access to water is a God-given right. It’s a scarce resource which has to be treated as such and, like everything else, come with a price attached”.  However a UN report from 2006 on Human Development states that privatization of water resources leads to reduced access for the poor around the world as prices rise.  For example, New Yorkers pay around 65 cents a cubic meter for water while Colombians pay around $5.50.  Londoners will pay around $1.50. However, this may also have to do with stronger infrastructure in the Western areas just listed.

The UN Report report highlighted several facts. First, 12% of the world’s population uses 85% of the water. Corporations around the world that own or operation water systems serve only 7% of the world’s population while over 400 million children have no access to safe water and 1.4 million children die each year from lack of access to safe water. 

With the world’s population increasing, more efficient means of water distribution will need to be found.  Ideas such as monitoring irrigation performance and improving models, developing water reuse systems and better information management systems/technologies for sewage and water networks are all solutions that companies such as CSIRO in Australia advocates for.