As global water scarcity continues to increase the value of water and water resource management continues to increase – but how do we value water effectively? This piece examines how we value water by understanding the economic, social and ecological impacts of water resources.
Whilst it may fall from the sky water’s value is far from free.
The traditional model of value assigns a raw material price based on its real-world applications. Water was traditionally treated as a free social good that was naturally abundant and available. However, The International Conference on Water and Environment (ICWE) held in Dublin in 1992, declared that "water has an economic value in all its competing uses and should be recognized as an economic good.”
Modern water demands are growing exponentially.
We now use water to drink, for hygiene, for manufacturing, industrial processes, high intensity agriculture. Every aspect of our globalised economy utilises water.
In open market capitalism this is primarily a good thing – the cost of water is tied to the utility of the water. This means overall water costs “should” reflect the costs and economic benefits of industries that utilise them to generate the products, services and resources that are most beneficial (profitable) for the world.
Where issues arise is that water supply also has a cost attached to it – sourcing, purification, storing and distribution. Inefficient management and wastage of water become issues when the cost of water to consumers is not reflected by the real costs of its production.
The economic value of water should be – the costs of production versus the cost of use versus the utility.
Economics can only take us so far to assess the value of water. The reality is that water scarcity causes friction, conflict and war. Water abundance helps communities thrive, grow and survive – improving health, resources and agriculture.
Access to water effects mortality rates, healthcare and longevity. Access to water allows communities to grow and develop with one of their basic needs met.
The social value of water is that it allows communities to thrive.
On one side water supports all aspects of the world environment and without it life would not exist.
When we try to value water, we need to examine the broader impacts. As well as supporting life it is essential for agriculture – allowing crops to grow, nourishing soils across floodplains worldwide and supporting flora and fauna that humans rely on.
The environmental value of water is that it allows the planet to thrive.
We are only now beginning to truly understand the value of water to people, planet and community.
A holistic understanding of water and water management allows us to recognise its true value.
It is not simply an economic value.
According to the 2021 World Water Development Report, “Recognizing, measuring and expressing water's worth, and incorporating it into decision-making, are fundamental to achieving sustainable and equitable water resources management and the Sustainable Development Goals (SDGs) of the United Nations' 2030 Agenda for Sustainable Development”.
Understanding the true value of water allows us to create systems that prevent the mismanagement and wastage of water whilst protecting the planet, people and communities that depend on our most valuable resources.
Systems that integrate technology, management, infrastructure and people effectively are critical to the long-term prosperity of the planet.