Chapter 1

‘Scarce fresh water an investment boon’

Link:

http://www.canada.com/edmontonjournal/news/business/story.html?id=60e8a4c1-b733-4f96-a85c-d723c1f4e221

Summary

Usable water has become even more valuable than oil, with over 70 percent of the world’s surface area is covered with water, how is that even possible? Unfortunately, 98 percent of the world’s water is saltwater, with only two percent as usable freshwater. Even worse, of the two percent that remains, only one percent of it is accessible, through lakes, rivers, and streams. The rest of the water is frozen in the polar ice caps. “The lack of usable water worldwide has made it more valuable than oil. The Bloomberg World Water Index of 11 utilities returned 35 per cent annually since 2003, compared with 29 per cent for oil and gas stocks” Water prices are only predicted to go higher and higher. As the world continues to grow, more resources are consumed. For example, an increase in population would need an increase in meat, and to produce more meat, there must be vegetation for the animals, and to grow more vegetation, it requires more water. Not only is freshwater used for human consumption, but also in industries, and largely in agriculture. The use for freshwater may rise 22 per cent by 2025, compared to 1995. “The United Nations estimates that by 2050 more than two billion people in 48 countries will be short of water.” Because of the growing need of fresh water, revenues in investment of water are expected to only increase; currently the water industry generates about $450 billion in revenue annually, following behind electricity and oil.

Relationship to Ch. 1 – Resources (land) and Scarcity

In chapter 1, we learned about the basic concepts of economics. The scarcity of a resource, like water, is a one of the most important concepts of economics. Without scarcity, there wouldn’t be any point of studying economics. Because there is a need or a demand for freshwater, and because there is a limited supply, there is a value on it, a value that will only continue to increase. Everyone needs water, it is essential to our lives. Even though in Canada, with our large chunk of the world’s water supply, for only one percent of the world’s population, we could still face a water crisis. Because of our extensive use of water for domestic, industrial and agricultural purposes, the supply of water could still not be enough to be sustainable in the future. We, as citizens of this world, each have a duty to conserve our resources as best we can.