Microeconomics about Fresh Water Supply Essay

Scarcity of fresh water is emerging as the most critical resource issue which world is facing in recent years. The signs of a shrinking water supply can be seen worldwide. Many restaurants no longer provide a free glass of water to diners and cities restrict its use for private pools and gardens. The supply of fresh water is limited, but with the increase in population, the demand of water increases rapidly. We use water faster from our resources than it can be replaced. This paper will discuss the issues regarding fresh water supply in the future with the already shrinking resources and fast growing world population, pollution of major water resources, impact of climate changes and longer drought seasons etc. The major factor of increasing water usage is the faster growth of world’s population. Demand for water is also rising due to increase in economic activities, urbanization and people’s lifestyles. Moreover, increasing population is shrinking the supply of water. Despite the fact that 75 percent of the Earth’s surface is covered by water, only 2. 5 percent of it is fresh water, and three-quarters of that is locked up in the form of glaciers and ice caps in polar areas, where human reach is nearly impossible. Only 0. 3 percent of the water is surface water, found in rivers and lakes. The rest is buried deep in the ground. (Hinrichsen & Tacio, 2001) The root cause of current global water crisis, especially in the third world countries, is population and there is a serious need to meet this crisis with modern techniques of water management. In the age of population explosion, more water is required for irrigation and we need to develop a sound planning to utilize water resources. Water scarcity has become a greater concern at present as people were facing shortage of water. Because of overpopulation, mass consumption, misuse, and water pollution, the availability of drinking water per capita is inadequate and shrinking. Because of population growth – coupled with industrialization and urbanization – will result in an increasing demand for water and will have serious consequences on the environment. The connection of Fresh Water and population is much closed, increase in population, urbanization affect the quality and availability of water resources. Also, population growth enhances the demand of fresh water for agriculture use, and house hold consumption. Scares and contaminated water supply also cause health problems. The shortage of water may arises political conflicts among countries, the example is India and Pakistan, both of them shares two or more rivers the India have advantage because he uses upstream water and the left is for Pakistan’s use. But they are not satisfied with all this, and try to get more and more by agreements and table talks. Some times it seems that they both are ready to fight for water, this type of situation is dangerous for the economy of both countries. (Hinrichsen & Tacio, 2001) Water is a strategic resource in the globe and an important element in many political conflicts. Some have predicted that clean water will become the â€Å"next oil†, making Canada, with this resource in abundance, possibly the richest country in the world. The Middle East region has only 1 percent of the world’s available fresh water, which is shared among 5 percent of the world’s population. Thus, in this region, water is an important strategic resource. By 2025, it is predicted that the countries of the Arabian Peninsula will be using more than double the amount of water naturally available to them. Jordan, for example, has little water, and dams in other countries have reduced its available water sources over the years. Other dispute on water is on river Gangus between India and Bangladesh. India controls the flow to Bangladesh. The two countries have now signed an agreement to use the water of Gangus River equally to prevent further conflicts in future. (Water Politics, 2008) As shortage of water increases by time to time, many countries of the world try to prevent this shortage by making laws and strategies for efficient use of water in house holds and industrial sectors. They attempt to make water reservoirs like dams and barrages to control the flow of water down stream and to fully utilize the river water and make it sure that not a single drop of water wastes. Dams are emerged as the major step which different governments take to overcome the crisis of water. There are at least 40,000 dams that are built to date in the world. (Hinrichsen & Tacio, 2001) Among these countries, India is the one, who increasingly rely on Dams to meet its water needs. The shortage of water may arises political conflicts among countries, the example is India and Pakistan, both of them uses 2 or more than 2 rivers the India have advantage of having the upstream water of all the major rivers which flow towards Pakistan. Thus there is a high probability of emergence of any new conflict over fresh water between these two countries. There are some other countries which have very little amount of fresh water within their boundaries, so they must use alternate way to get fresh water. They must resort to the conversion of sea water into fresh water to fulfill their needs, not to mention land locked countries. The process is known as Desalination. Without this process they are not able to support there population. The technology is very high energy consuming and is very expensive; it is beyond the reach of most poor countries which facing water shortage, like some countries of Africa. (Hinrichsen & Tacio, 2001) The major use of water is in Agriculture sector, industrial sector and by house holds. With the increase in population, the usage requirements are rise proportionally. Increase in population’s living standards, increases per capita water consumption. Increasing Agricultural and Industrial usage reflects improving in living standards. Agriculture Dominates global water use, accounting for 69 percent of all water withdrawals. Industry accounts for about 23 percent, followed by municipal consumption at 8 percent. (Hinrichsen & Tacio, 2001) In the coming years, population of world grows rapidly and the per capita consumption of water in coming years shrinks the world’s water resources, as a result the demand for water exceeds more than reserves to provide it. It is expected in future that a large number of countries facing water shortage due to exceeding demand of water. Water demand is also rises due to the growth of industrial usage, rising demand for household consumption and increasing use of water for irrigation to produce more food to feed rising population of world. Take United States of America as an example, while the average American in 1900 just consume 10 cubic meter of water per year for personal and household use, that figure had jumped by an average of 200 cubic meters a year. (Hinrichsen & Tacio, 2001) Most people in developing countries get their water from a public tap, community wells, rivers, lakes and rain water collected from ponds. As most of the developing countries become urban, people get their water from city water system. As we know that cities are ever growing larger and larger, their demand for water increases with the increase in population. Such growth of population puts pressure on city’s water reservoirs and most of them are unable to provide or fulfill that demand due to lack of resources. In Middle East, the amount of renewable water is declining due to increase in population. â€Å"The practice of heavily subsidizing water is costing Middle East governments dearly, both in terms of revenues and efficiency. Governments in the region, advised by water industry experts, are realizing that a fresh approach is required, one based on managing the region’s scarce water resources, rather than just reacting to uncontrollable consumer demand,† says Edmund O’Sullivan, Chairman of MEED Events. (Mideast faces fresh water crisis, By Staff Writer on Sunday, March 16, 2008) Due to shrinking water supply in Dubai, last month, the Dubai and Water Authority increased the tariff of water and electricity. This was the first time; Dubai has increased the tariff since 1998. â€Å"Tariff increases are bound to be met with resistance, so a gradual approach may be the best way forward. Although the change will not apply to UAE nationals, the biggest consumers of water, it is a step in the right direction. Managing existing water assets better could go some way to reducing the need for new capacity,† O’Sullivan said. (Mideast faces fresh water crisis, By Staff Writer on Sunday, March 16, 2008) Another major cause of shrinking water supply is water pollution; it becomes a major problem for all the countries of world, developed countries in Europe and North America face problems due to water pollution. In many countries of world, especially in developing countries, lakes, rivers and streams are used as receptacles for an assortment of industrial wastes, including untreated and partially treated municipal sewage, industrial poisons, and dangerous chemicals that mix into surface and ground water during agricultural activities. Caught between scare and polluted supply of water, and rising demand from population and industrial sector, most of developing countries are facing difficulties to provide demanded amount of fresh and clean water (Hinrichsen & Tacio, 2001). As the World Bank has warned, lack of water is likely to be the major factor limiting economic development in the decades to come (Serageldin, 1995). More than half of the world’s rivers are now so polluted that they pose serious health risks. One-third of Africa’s people already endure conditions of water scarcity, and water supplies are in jeopardy in China, India, Japan, Spain, southern France, Australia, the southwestern U. S. and many other parts of Asia and Europe. Rapidly growing populations, ever-increasing pollution, desertification and falling water tables endanger a fragile, finite resource. Toxic chemicals are contaminating water, endangering the world’s most precious supplies of water. Toxic brew of pesticides, nitrogen fertilizers, industrial chemicals, and heavy metals is fouling water everywhere, and that the damage is often worst in the very places where people most need water. In the next 50 years, an additional 3 billion people are expected to inhabit the Earth, creating even more demand for water for drinking, irrigation, and industry. But we’re polluting our cheapest and most easily accessible supply of water. (Sampat, 2000) Distribution of Freshwater: One major issue that is likely to have a major impact on freshwater’s supply and demand in the years to come is that of distribution. Like many other natural resources, freshwater’s distribution around the globe is extremely uneven. Areas inhabiting less than one third of the world’s population currently receive more than 75% of the annual rainfall. With global warming rapidly changing the environmental outlook of the globe, this natural distribution of freshwater is likely to become even more uneven. In some regions, where freshwater is available in abundance or annual rainfall is moderate enough to meet the demands of the local population, lack of proper resources and infrastructure restricts access to the freshwater supply. For instance, in South Asia, rainfall is the major source of freshwater. However, above 80 percent of the rainwater runs off too quickly to be effectively utilized. A number of methods and processes have been developed over the years to preserve freshwater resources and to ensure that runoff from the rainfall doesn’t go wasted. Dams and desalination are the two most commonly used processes world over. It should however be noted that not all countries suffering from shortage of water supply have enough resources to properly develop or employ such methods for the preservation of freshwater supply. Freshwater Resources: The Microeconomic Perspective: From a microeconomic perspective, the cost of freshwater is likely to increase sharply as soon as the planet starts running out of resources. Decline in quality of available freshwater resources such as river or lakes, change in rainfall trends and drying up of glaciers are some of the many factors that will eventually lead to a decline in the supply of freshwater in different parts of the world. Demand, on the other hand, will continue to increase as a result of an increase in population, lifestyle changes and improvement in quality of life in developing economies. The result will be a shift in the supply curve. In simple terms the price for freshwater will shoot up in the long run. There will be severe economic as well as sociopolitical consequences of such a shift in the supply curve. Economies suffering from freshwater shortages are already facing challenges that directly impact their economic performance and social progress. The only way out of this disaster is broad and extensive collaborative initiatives by the world nations to ensure the fresh water supply in the future. There should be immediate measures to be taken to sort out and cope with the problem of pollution of fresh water resources, because it is the most fatal blow on our already shrinking resources. Comprehensive awareness programs should be launched in every part of the world on local community bases so that the individuals become aware of the danger they are about to face in the near future and be prepared for it. Deliberate misuse of water should be considered a crime and extensive punitive measures should be taken in order to curb deliberate misuse and pollution of water supplies and resources. The overall condition of fresh water supply gives a clear indication that in the near future the fresh water supply will not only will be reduced but it will also become costly and the consequences will be very harsh and brutal for poor people who are already deprived off clean water supply may be completely left without water supply in the future. If immediate measures are not taken there is a very high probability that fresh water will become a luxury of the elite only and the commoners will have to survive without it if they can survive. References Hirichsen, Don & Tacio, Henrylito, (2001) The Coming Fresh Water Crisis is Already Here, Wilson Center, Retrieved on 17th March 2008 http://www. wilsoncenter. org/topics/pubs/popwawa2. pdf Middle East Faces Fresh Water Crisis, (2008) Emirates Business 24/7, Retrieved on 18th March 2008 http://www. business247. ae/cs/article_show_mainh1_story. aspx? HeadlineID=3929 Sampat Payal, (2000) The Hidden Freshwater Crisis, World Watch Institute Retrieved on 18th March 2008. http://www. worldwatch. org/node/1684 Water Politics, (2008) Wikipedia The Free Encyclopedia. Retrieved on 17th March 2008 http://en. wikipedia. org/wiki/Water_politics#Water_as_a_critical_resource Saijel Kishan and Madelene Pearson, Bloomberg News Published: Monday, July 03 2006 http://www. canada. com/edmontonjournal/news/business/story. html? id=60e8a4c1-b733-4f96-a85c-d723c1f4e221&k=50181 http://www. business24-7. ae/cs/article_show_mainh1_story. aspx? HeadlineID=3929