Water scarcity and property rights

Recently on The Economist has been published an article about water scarcity. In details the author asserts that water is scarce because it is badly managed. China for example uses 10 times more water for its industries than the average developed countries. Moreover, the farming sector, as we well know, uses 70% of the water supplies, mainly exploiting underground basins paying only for the supply costs and not for the infrastructures installed to provide the service. This ultimately, makes the price of water very cheap and as he states “When something is too cheap, people squander it”

As solution he suggests to better price and manage water, in order to give to the users a reason to reduce the water waste and to increment the funds to build more efficient infrastructures. The first step to implement this shift, which has an estimate cost of 26$ trillion (yes you are reading correctly), is to clarify “who owns the water or  who has the right to extract it).

Well, here I find myself in total disagreement! First of all, the facts presented in the article are generally correct, however at a very superficial level. Moreover, the author does not present any kind of solution to the problem. He said that we should price better the water, but the obvious question is: how would you change the water price? Moreover, who should be entitled to collect the money and ultimately how do price or put a property right on something that flows, like air? In the case of minerals or non dynamic resources, as they are present in loco, within a country, assigning property rights it is easy and practicable. But rivers stream across countries, springing from mountains glaciers that may be located in another country too! So who owns the water of that river? Who is entitled to claim the property right?

But let’s suppose that eventually all this becomes true, who would guarantee that all the revenues collected will be used to build more infrastructure and help countries that are going to face water scarcity?

Water is an human right and I agree that too much water is wasted every day in every part of the world, in our homes; but privatising a public good, essential to human life is definitely not the solution.

What do you think about it? Steamgreeners comment!!!

Here is the link to the Economist article : http://www.economist.com/node/21709541/comments#comments

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