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Dealing with Water Scarcity: Need for Economy-Wide Considerations and Institutions

A simple metric of water scarcity is the water availability per capita. We calculate it for both water-endowed and water-short countries. Under ideal conditions of water resource management and with no external shocks, such as climate change, both affecting the availability and variability, respectively, over time and across landscape, our world faces increased scarcity of water.  This scarcity under ‘ideal conditions’ is by itself devastating.  Different regions and countries lost 50-75% of the available water per capita in the past 100 years.  Add to that the loss due to mismanagement and external climate change shocks, and we face a catastrophic situation, especially in some parts of the world.

The substantial reduction in the available renewable water resources, on the one hand, and the increase in the water-consuming economic activities—for example for food production, increases in standards of living—on the other hand, lead to a widening gap between the water quantities supplied and demanded.  Usually, such a gap is bridged in the short run by increasing the overdraft of available water stocks—namely groundwater aquifers.  Indeed, 21 of the world’s 37 largest aquifers around the world extracted more water than was recharged during a recent 10-year study period ending in 2014

 

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