In these columns last year, I had discussed the problem of overconsumption and underinvestment in the critical areas of water, air and forest management. On the lines of research by Elinor Ostrom, the Nobel prize winner of economics in 2009, I had suggested that common property management may be a good alternative to public or private management of public resources. This may also prevent the ‘tragedy of the commons’ from playing itself out in various public resources arenas. I had also suggested that social capital would be an important factor in overcoming collective action dilemmas in the supply of public goods. In this two-part article, I will dig deeper into these problems in the water sector and analyse the issues from the NIE+ perspective, which I have proposed in earlier articles. In Part I, I will discuss where we stand now and look at the policy trends in developing and developed countries. In Part II, I will outline policy guidelines that the NIE+ analysis offers.
The current situation
Just 2.5 per cent of the water on the Earth is freshwater, and more than 66 per cent of this is frozen in glaciers and polar ice tops. Water demand exceeds supply in most parts of the world. Further, the quality of water continues to deteriorate with sewage flowing directly to water sources in many parts of the world. Hence, water conservation continues to be a focus area in the policy matrix of most countries. Every country is confronted with either quantity or quality issues in respect of water supply (both surface water and groundwater). It is also true that in either case, efficient use and better management of available water resources can ameliorate the conditions appreciably. A number of studies at the World Bank (Saleth and Dinar, 2004) have also argued as much and this gives us hope.
Given that most of the water demand comes from the irrigation/agriculture, urban sector and human consumption, this has implications for the various policies in these areas. For example, given that any new irrigation project involves huge costs and an unfavourable environmental impact (relocation of populations, land acquisition etc.), it is better to improve water availability through more efficient use, better conservation techniques (like drip irrigation, sprinklers, behavioural change) and management. The same argument applies to the urban sector water supply. With growing urbanisation, about 60 per cent of the world’s population is likely to reside in cities by 2025, which will lead to a rise in demand for urban water. Further, in developing countries, poor quality of water also means poor sanitation, which in turn leads to serious public health issues such as frequent outbreaks of malaria and gastrointestinal diseases. Again, new projects of urban water supply are capital intensive and more efficient management of existing water resources may be a better solution. Not only that, but desalination technologies to reclaim sea and ocean water…
Read more:: Water conservation dilemma-I