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Symposium 2011

Proposal - by Richard Evans

The Challenge

Two fifths of the world’s population faces water shortages. During the coming decades, water scarcity is expected to rise as a result of a rapid increase in the demand for water due to population gr ...

Two fifths of the world’s population faces water shortages. During the coming decades, water scarcity is expected to rise as a result of a rapid increase in the demand for water due to population growth, urbanization and increasing consumption of water per capita. In addition, climate change is expected to influence the supply of water, modifying the regional distribution of freshwater resources.

In many societies water is considered a right rather than a commodity with economic value. This is not surprising when water is abundant and demand is low relative to supply. That condition no longer exists in many – and perhaps most – societies. In some cases water is being seen as either a commodity or a right depending upon its use – i.e. a commodity in industrial use but a right in personal use. The single largest use of water, however, is for agriculture which arguably encompasses both personal use (subsistence farming) and industrial use (large scale corporate farms) – as well as all shades in between. Not surprisingly it is at this intersection that the debate is most virulent. The logical solution is to treat a base allocation of water as a right for personal use and any marginal use as a commodity. Similar pricing mechanisms have been used for some time in utilities such as electricity. The challenge is in the details and in the circumstances of the particular situations. Establishing a basic right allocation in a country like Canada with abundant supply and a low and relatively slow growing population is far easier than in countries like Somalia or India with low supply and large and growing populations. Nevertheless, this formula is the best structure by which to deal with the duality of water’s role in society and human survival and prosperity. Treating water entirely as a commodity is most likely politically unsustainable in many countries today; however, to treat it as an un-priced and freely accessible right is likely to lead to excessive overuse and ultimate crises (including the virtual trade) even in the best endowed countries.

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