/Users/Gundulaartmann/Documents/Fom/Economics/Why Is Water a Scare Good 2.Docxwhy Is Water a Scarce Good?

Why is water a scarce good?
Master of Business Administration (MBA)

Module Economics
Assignment 1
Course Instructor Prof. Dr. G. Mann

Author Gundula Artmann
Student ID Number 266 342
1st Academic Semester 2010/2011

Place, Date Gauting, 31.10.2010

Table of Content
1 Introduction 3
2 The Nature of Water 4
2.1 Total Water versus Freshwater 4
2.2 Water: Public versus Private Goods 5
3 Summary on Economics of Demand and Supply 6
4 Demand Drivers 8
4.1 Population Dynamics 8
4.2 Growth of agricultural Production 9
4.3 Use of Freshwater in Production 10
4.4 Climate Change 10
5 Supply Drivers 11
5.1 Pumping Surface Water 11
5.2 Aquifers 12
5.3 Desalination 12
5.4 Uneven Distribution of Freshwater 13
6 Some Measures against the Disparity of Freshwater Demand and Supply 15
6.1 Agricultural Optimisation 15
6.2 Water saving budgetary Measures 15
6.3 Closed Water Cycles in the Industry 16
6.4 Freshwater and Sewage Treatment 16
7 Conclusions 17
7.1 Disparity of Water Demand and Supply 17
7.2 Water Scarcity as a Part of complex Resources Management 18
Bibliography 20
Figures 22

1 Introduction

In our first economics lecture Prof Mann told us that water is one of the public goods available for all. In that context I remembered our visit at Lake Mead, which is the biggest artificial lake of the Colorado River that rises behind Hoover Dam. The declining water level from under less run off, high evaporation rate and over pumping exposure (compare Dürand et al. 2007). It inspired me to learn more about freshwater systems and I ask the question whether freshwater is a public good or a scarce resource.
Freshwater of adequate quality is a vital need of human society and natural ecosystems. Humans use freshwater directly and indirectly by consuming and purchasing products, which need freshwater for their...