water scarcity and how should it be managed?

8/13/2019 Water Scarcity and how should it be managed?

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WATER SCARCITY AND HOW SHOULD IT BE

MANAGED?

Resource Economics

Khadija Khan

Mehak Rafique

Lahore School of Economics

Tuesday, 18thJune 2013.


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Table of Content

Introduction .................................................................................................................................................. 2

Water scarcity and the Industries ................................................................................................................. 3

Government Policies and Institutions ........................................................................................................... 6

Cost-Benefit Analysis .................................................................................................................................... 8

Climatic Effects ............................................................................................................................................ 10

What we get out of it .................................................................................................................................. 12

How can it be linked to Pakistan ................................................................................................................. 14

Way Forward ............................................................................................................................................... 16

References .................................................................................................................................................. 18


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Introduction

Water is an essential element to life, the human dignity and most importantly the ecosystems.

Water is considered to be a unique resource unlike the finite resources such as coal or oil. The

amount of fresh water present on earth accounts for 3% only, and 1% of that is used by human

beings. Water is used for numerous purposes, and the use has increased over the course of years,

such as irrigational purpose, hydropower, dams, industrial and urban development, infrastructure

projects and so forth. This much success has been only possible after paying a cost for it- the

water resources are drying up. The future of the water resources is alarming, and the reasons for

the scarcity are many: the increasing population and its need for food and water is further

tightening the situation, the increased standard of livings is causing a higher water per capita

requirements, the rising economic growth in the developed countries need water for development

(domestic, agricultural and industrial), the demand for water infrastructure development to meet

the demand for water and energy needs (hydropower, dams etc), the climatic changes(variability

the precipitation rates, snowfalls, and floods), and many other reasons make up the water scarcity

issue. The United Nations expects that by the year 2025, 3 billion people in 52 countries will be

affected by water scarcity and they will not have enough water to drink, for sanitation or for

household use, and it is also projected that in 2025, the worlds water resources will need to be

enhanced and manipulated by 22 percent to meet the needs of the society (Thomas, Bender. N,2004, the Impact of Water Scarcity and Pollution on the Textile Industry: A Case Study from

Turkey). Hence we begin by address the problem of water scarcity and how should it be

managed over the years.


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Water scarcity and the Industries

Day by day the pressure is building up on the industries as to how to use and manage the worlds

most precious resource-water. Water usage is divided between many sectors; agricultural,

industrial and domestic, where industrial usage of water accounts for 22% for the world. There

stands a challenge in the way of these business/industries to deal with the situation of exposure to

water related risks. Water scarcity and managing the resource is a big hurdle for water and

energy-related industries, the agro-based businesses, product manufacturing departments,

chemical industries, financial and insurance industries and retail and distribution departments.

The industries, specially the chemical industries and pharmaceuticals are trying their best to use

less of water as required and pollute less in return as lack of clean water is a rising problem.

Hence the industries now have started using less water and by the years 2005-06 the chemical

industries in many states had reduced the water usage up to 8%. In the US, some of the chemical

factories have reduced the hazardous emissions of chemicals into water which are dangerous for

the aquatic life as well as the environment.

Industries under the pressure of using less water have come up with useful strategies to use less

water and store it for their use. They have started taking steps to store water, such as installing

water cooling kits to avoid evaporation of water, sterilization to maintain water quality, water-

harvesting methods where the excess of monsoon water is stored up and used in dry seasons.

These steps have started showing their impacts over the years. Some companies try to reduce

water consumption, some try to store water, and some try to recycle water and some re-use it.

The question is that what sort of technologies and ideas the companies need to invest in for the

maintenance and increased water supply.

Desalination is of the techniques-creating water instead of depending on the existing supply.

However recent studies in California where, to alleviate water shortages, there are plans to buildaround 20 desalination plants, the biggest of which would have a daily capacity of 400,000m

3

shows that recycling and reuse may be a more sustainable option (Milmo. S, 2008, Thirsty

Work). However everything comes with a price, and so does this technique, where it is costly to

install this and is very energy-consuming. However to judge the success criteria it must be so


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that the impact on water and energy is efficient. The reduced consumption of water by the

industries should in return decrease the energy consumption and lower the costs.

Leading water-using industries also include the textile industries which use water on a large

basis. Textile industries in countries like turkey have also hit the water scarcity stage and our

taking steps to deal with it. These textile industries at first tried to move out to locations where

they could store their water requirements. They have tried to cope up with the shortage of water

by building up their own waste water treatment plants and made sure that no polluted water is

being discharged out of their factories. Turkey is facing the consequences of water scarcity and

pollution as far as their textile industries are concerned, and this is not only turkeys problem, in

fact this is a global concern. Turkish industries are importing such techniques that facilitate them

in producing their goods where no water is used at all (Bender. N, 2004, The Impact of Water

Scarcity and Pollution on the Textile Industry: A Case Study from Turkey).

As far as the textile industries are concerned, they need fresh and clean water for the purpose of

dying the fabric and to produce the fabric. On the other hand water thats available to these

industries is highly polluted and thus needs to be treated. Hence the textile industries have

switched on to less harmful chemical based dyes and technologies. An example is Ultrasonic

where Ultrasonic waves are being researched in order to replace processes that require water or

to decrease the amount of reagents in the effluent. The ultrasonic waves can produce effects on

textiles that are similar to current physical and chemical techniques with the advantage of not

using water. Instead of chemicals or machinery that requires water during processing, researchers

are allowing the fast impulses of the ultrasonic waves to do the work (Bender. N, 2004, The

Impact of Water Scarcity and Pollution on the Textile Industry: A Case Study from Turkey).

Another type of water conservation strategy is the foam application where this application

replaces water with air to apply the dye on the fabric. Sperretto Rimar washing system is another

way of re-using water in the textile industries. Chemical formulas that are used to make dyes are

also being altered with the help of enzymes that make them less dangerous. The case study done

by Nathan Bender in his paper mentions that Turkey imports machines which help them use less

water and chemical in order to produce their fabric. It also talks about the Neuenkirchen

clarification system is a way of recycling the water that contains chemical waste products as an

end product.


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Industries on the whole play a large role in polluting the water streams and create the problem of

water shortage in those areas. A number of organizations have been established to cater to these

problems where the industries dump tons of heavy metallic wastes, toxic chemicals and sludge.

These organizations take up the responsibilities that the industries do not pollute the water and

also focus on dams, sewer systems, desalinization, and water allocation.

Not all manufacturing and other industries carry out the water treatments, the reason being that

water purification and recycling and its re-use may not only include higher costs of installation

or adopting these techniques, but also require training, expertise skills, and education.


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Government Policies and Institutions

Government policies and the institutions that are handling the supply side of water are one of the

issues that most of the countries are facing related the water scarcity.Government or

bureaucratic decisions favor the building of more dams which in turn cause environmental

problems such as flooding the lands by the reservoirs of dams and also increase the charges on

water use. Despite this governmental solution, every solution in supply side is with a pitfall. The

major pitfalls that most of the developing countries are dealing with, facing water scarcity, to

begin with that the increasing technology has raised the cost of new machinery and system along

with the debts that one country has taken fail to raise the funds to proceed with the process to

control the water scarcity in present and future as well. The other main issue related to

government is subsidizing the water use, enabling the users to use as much as water they want to

whether in agriculture purpose or so how, defy to encourage the conservation of water resource

that is not taking into account the future generation that they would be worse off than the present

generation. Government is foremost in increasing the water scarcity through public irrigation

system, ground water and private irrigation, and lastly urban water systems. Public irrigation

systemhas been an intense issue around the globe for ones facing water scarcity and there has

also been not a clear understanding of how to control it. Issue that deals with public irrigation is

that the remaining water, after given to water users (farmers, households, factories), is whether

used or wasted. Price setting, without taking in to account the waste of water or the cost that

actually is to supply the water discourages the conservation of the water and further failure to

provide water for irrigation in present and future. It is evident that irrigation infrastructure is

foremost to make irrigated area effective. These problems are compounded by the negative

externalities imposed by upland deforestation (Alan Richards, 2002). Bureaucratic structure of

responsibility plays a crucial role in public irrigation but so far they are the cause in the failure of

this system. To begin with the reasons, they pay more attention towards the supply side and

overlook the issues that this might lead to, decisions of allocation are segmented, prefer

seniority, and centralized decision making. In conjunction with the public irrigation, the private

irrigationhas also been the other issue in water scarcity encouraged by the government.

Governments of most developing countries has subsidized the power and promoted machinery

use to get ground water by lowering the tariffs and abolished the bans on imported machinery.


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Encouraging the irrigation by tube well has serious consequences; one has to face in the future, is

increased cost of capital and power and most importantly the reduction in availability of water

tables. Population has increased in cities and the issue related to urban water system is water

supply and sanitation service to such a huge population. Supply of water to massive population

needs proper sanitation services, for this purpose cities have to get the water from underground

or more distant sources which increases the cost of supplying it along with the cost of lower

quality water treatment.


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Cost-Benefit Analysis

The value of environmental goods or services can be determined by its direct, indirect, non-use,

option and existence values along with the understanding of the cost and benefits of

conservation. Discounting has been an intensive issue and a reason of scarce resource which in

this particular case is water. Discounting is a reason of deviation from sustainable development

by compromising future generation. As with the growing economy, the demand for water has

increased and the cost has also increased for the provision of clean water. Industries have

polluted the nearby water by its waste which has further raised the cost of their treatment. The

other issue regarding the dirty water is adverse effect on aquifer due to fertilizers and pesticides

and by unnecessary pumping, leading to scarcity of water. Diminution of aquifer jeopardizes the

ecological system. The core issue is the inability to understand the cost and benefit analysis of

such problems to reach to a sustainable or acceptable policy that benefit the current and future

generation as well with the reduced cost of executing it. One has to take in to account the

economic value of use and non-use benefits that will be generated by this plan and weighing

these benefits against the costs of implementing this plan, using different discount rates (Ekin

Birol, 2009). Ekin barol and its co authors has highlighted the cost benefit analysis framework by

explaining it through the experiments that were conducted in 2008. The proposed idea to control

the scarcity and poor quality of water is to fill the aquifer with the treated waste water inLimassol and close by places. The benefiters are farmers, deriving option and use value, other

public close the Limassol city, deriving indirect and non-use values. In particular article, two

experiments were carried out, given different attributes, taking in to account the economic value

that benefiters have accrued through that experiment. The first experiment related to farmers has

attributes of quality and quantity of water and it is specified in the experiment that highly treated

waste water is the only mean to maintain the current quality of water otherwise the water quality

will be poorer than before, deteriorating the crops. The other attributes are employment and

monetary. Employment level will effected, if the plan to replenish the aquifer with treated waste

water not taken seriously and the low quality water will destroy the crops leading to decline in

the employed farmers by large proportion. Monetary attribute tells that the price of water paid by

the farmers could remain same or increase by some percentage depending on the m3 of water

extraction. Second Experiment is related to residents given almost the same attributes. The


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employment attribute is the same as in the farmer experiment except the fact it takes in to

account the economic benefit public gets from social, economic and ecological factors. The

water attribute is to capture the impacts of economics factors on residents as to know the

diversification of local crops. The ecological attribute is the one which has not been mentioned in

farmer choice experiment but has been mentioned in resident experiment to know the effect of

scarce water on the region. Survey conducted by sampling the farmers and residents, asked for

their view on implementation of their plan to refill the aquifer by treated waste water firstly by

reminding them of the whole situation of the existing aquifers and damages that has been

occurred due to dirty. Condition logit model was followed to get the results. The result of the

CLM reveals that all attributes included in the definition of the aquifer management plan are

highly significant determinants of aquifer management plan choice (Birol, Koundouri,

kountouris, 2009). The results are in the favor of alternatives to maintain the current condition

evident from positive coefficients on quality, quantity and employment. Whereas in the case of

prices favoring those plans with lower prices of water apparent from the negative coefficient.

The whole scenario highlights one important point that farmers and residents utmost need is the

better water quality and quantity and there is also large economic benefit from it. Willingness to

pay and compensating surplus are the two keys to ensure the replenishment of aquifer maintains

the water quality and quantity at the current level. The article in the end discusses about the cost

benefit analysis that is mostly analyzed by the net present value but it does not take in to account

the future generation which is quite problematic as future is difficult to predict so it considered

uncertain. The second foremost step in cost benefit analysis is to know the fixed and variable

cost to incur in aquifer replenishing plan. The last step that should be followed in this analysis is

to analyze that whether the plan implementation will be Pareto improvement as this is related to

cost-benefit improvement. This cost benefit analysis is helpful in a sense as it takes in to account

the cost and benefits that one group has to accrue in conjunction with sustainability.


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Climatic Effects

We know that changes in the water quality and quantity because of the changes in climate in

return can cause problem of food availability, utilization and specially water management.

Changes in the climate can cause a number of difficulties when it comes to manage the water

resources for the purpose of infrastructure and management practices.

The indicator used to formulate the water necessary to survive is the water resources per capita

by watershed. In a short period, we can think of the water resources to vary because of the

patterns of monsoon cycles. On the long run however, it can be judged from the severity and

intensity of the floods, droughts and other hydrological calamities.

The general trend is such that the water resources are affected by the climatic changes. The

regions which are facing the problem of water scarcity are facing adverse climatic changes. In

the regions like tropical, high latitude, and equatorial, they are facing an increase in the

temperature, and the evaporation rate has also gone up gradually over the years and it is

projected that it will increase up to 17-18% in the year 2025. These changes not only reflect the

variations in the levels of precipitations, but also the increase in the evaporation rate, where

larger parts of the world where water shortage is a problem, they face an overall reduction in the

level of runoff and annual precipitation. (Arnel. Nigel W., 1999, climate change and global water

resources).

It can be said after reviewing the climatic situations in various regions that the increase in the

evaporation is because of many reasons like increase in the temperature, the increased vapor

pressure, and higher wind speeds. In northern snowcapped areas, the overall increase in

temperature means that there will be less amount of precipitation in the form of snowfall. Hence

the water resources in these snowcapped regions are in the form of snow fall. Across large parts

of North America, northern China and Eastern Europe, snow cover by the end of winter has

been considerably reduced by the 2050s and this has implications for the timing of stream flow

through the year as indicated in the next section. In northern Asia, however, extra winter

precipitation leads to an increase in March snow cover (Arnel. Nigel W., 1999, climate change

and global water resources).


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According to the paper presented by Schaake and Kaczmarek (1979), they conducted a study on

the climate, the climatic change and water supply. They discussed the issue of the water scarcity

which might or might not had been the result because of the changes in the climate, whereas they

also assessed the possible changes that climate brings to the water resources (J. Nemec, J.

Schaake, 1982, sensitivity of water resource to climatic variations).


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What we get out of it

Most of the developing countries are facing the problem of water scarcity and has not taken

proper measures to control the scarcity. Government role in exacerbating this issue is that they

perceive that building of dams can increase the provision of the water to their citizens and

demands can be fulfilled to some extent with it. But this perception of the government and

related institutions is strongly needed to be changed as the increasing the supply and subsidy on

water has only encourages the users to consume water more and more. The article that has been

reviewed for the issue also made it very easy to understand by dividing the water supply division

in to three sections, that is public, private irrigation system and urban water system. these

sections highlight only one major issue that government only motivates consumer to use as much

water as they want and no strict measures are taken to control. As in public irrigation the price

that has been set for farmers ignore the cost of the water they wasted and in private irrigation

reduce tariffs and reducing bans on imported machinery to get water from ground water.

Eliminating bans on imports and encouraging the use of hydro power is only increasing the

consumption of water and energy. With growing population the cost of supplying the water has

increased which made the sanitation services poor.

Cost benefit framework has been the important tool in analyzing the cost and benefit accrued to

the different groups. The step that one has to follow of calculating NPV is problematic in sense

that it does not predict the future. Increasing discount rates will make the future generation worse

off so keeping lower discount rate is better strategy to not increase the cost for future generation.

Discounting leads to Pareto improvement that one has to be compensated to benefit the other

person, which is not efficient and efficiency cannot be achieved in real world. Cost benefit

analysis helps to evaluate that which policy is appropriate. If cost to implement the plan is

greater than the benefit it is giving, then should not be opted. A proper survey should be done to

know the Willingness to pay so that to be able to analyze the cost benefit. A perfect econometric

model should be used to get a better result without errors in it.

It is evident that the developed countries like the US, Canada, China, Turkey and many

others have already taken steps to deal with water scarcity since a long time ago. The industries

in the developed nations, have tried to stabilize conditions for the production and manufacturing


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departments with the help of technology and their knowledge. A higher cost of conserving water

is one of the major drawbacks for the developing nations and the third world countires for not

taking any steps to conserve water. They are not provided with enough incentives to carry to take

any steps to save water. Moreover Climatic changes as a result of deteriorating environment have

played its role in further alleviating the problem of water shortage. The temperature has started to

increase in a number of regions mainly because of global warming and hence this causes

flooding and in some areas higher evaporation leading to droughts or lower precipitation rates, or

even a decrease in the snowfall in the northern areas. The main problems lies in the fact that

temperature of the world is increasing overall and the consequences have to be faced-less

precipitation, more of evaporation, and increased melt down of the glaciers and snowcaps.


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How can it be linked to Pakistan

Pakistan has been blessed with water resources through Himalayan and Karakoram. Pakistan is

an agricultural country and it is considered as the backbone of our country. The consumption of

water is highly needed in agriculture sector for cultivation and other purposes beside this our

industries work by hydropower and for this purpose dams are built. Water is the essential need

for the living and survival of an economy, precisely. Pakistan is quite behind the other

developing counties in the race of development and overcoming the issues regarding the water

scarcity. As been said that Pakistan has various water resources such as rivers, rain, lakes,

glaciers, surface water and ground water. Historical background of Pakistan related to water

resource has not been good as after the independence had only two three dams which has

increased in number till now but are not as efficient as they should be. The storage loss due to

dams has increased through the years. Government perceives that large quantity of dams will

overcome the problem in supply side which in turn has adversely effected the nearby

environment. The demand for water is increasing rapidly, while the opportunities for further

development of water resources are diminishing (Ayaz Ahmed, 2008). The increasing demand of

water is mainly due to increasing population growth which has made it more difficult for the

government to fulfill the need of every citizen. Cultivation of land has to be increased so as to

produce more food with the increasing demand of the increasing population. Expansion inirrigation has led to other serious problem that is salinic, soak up all the mineral salts from the

earth, which has polluted majority of the water tables and poor sanitation services with the rising

sewage overflowing towards the rural community, Balochistan and KPK are the provinces which

are highly affected by the salinic. Salt water intrusion has increased the proportion of dirty water.

Sewage and dirty drinking water problem is highly evident in Karachi as no construction or

maintenance has been done on broken water pipes and the underground dirt has polluted the

water in the pipes. The other issue regarding the polluted water is linked to industries. In

Pakistan industries are located at distant places from the very edge of the developed cities but

near to rural areas, dumping the waste directly or indirectly in to lakes thus polluting it with toxic

chemicals. Industries that are polluting the water heavily by toxicants are sugarcane, tanner,

cement and fertilizers. No precautionary measure has been taken seriously so far as it is obvious

from the fact that Pakistan has only three waste water treatment plants.Managing the Indus river


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basin the light of climate changes, water supply is falling behind agricultural and urban demand

particularly in Karachi where population growth exceeds the physical institutional capacity of the

public water system (Omar, 2004). Politics always had a negative impact, as in instead of solving

the situation; worsen the situation more than before. Corruption has constantly been the major

factor in worsening the situation of allocation of water resource or any other resource between

different cities along with rural and urban, which has been evident from the disputes between

Sindh and Punjab. In Punjab rural areas the water supply is through the piped water or hand

pump and large percentage of people in Sindh, Balochistan and KPK, as compared to Punjab,

depends on dug well, river or canal. It has been predicted by the economists that Pakistan will

face the water scarcity issue in the near future as the population is increasing and the availability

of water resource is diminishing. The climatic changes have also adverse effects on the water

availability as the green house gases which trap the solar radiations and increase the temperature

of the earth. Due to increase in temperature the climatic changes in the form of rain fall, ice

extent, and sea level rise has taken place. Climate change will add to the susceptibility of the

agricultural zones to natural catastrophes such as storms, floods and droughts in addition, to

exposing the country to socioeconomic losses. Global warming is also one of the reasons in

water scarcity, quite apparent from the level of scarcity in KPK, Balochistan, Sindh, where the

sources of water has depleted, Stream flow reduced and drying up of wells especially in Quetta.

Pakistan has been unable to form a better strategic plan to overcome these issues or problems

related to water. Every year the situation worsens more than before and government is highly

ignorant to even strategize to control these issues.


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Way Forward

Water scarcity is increasing at an alarming rate and we need to conserve this precious liquid.

There are many ways that the water can be conserved to meet future needs, to save money, and

most importantly to preserve the environment.

There are many solutions provided by many environmentalists to deal with the shortage. Cloud

Seeding is one of the most recent scientific inventions. This technique stimulates ice crystals to

form precipitation-an attempt to induce rainfall. This type of a technique works against the harsh

climatic conditions that deprive the lands with water resources. However this is an uncertain

method to induce rainfall and there arent many evidences to support. Nevertheless it is relatively

inexpensive (Frederick K.D. 1995, Americas water supply: status and prospects for the future,

Vol.1)

Another method is Desalination, which is becoming a great concern for many engineers, and

governments. This method converts the sea water to fresh water for the commonly known uses of

water. However less attention is paid to the desalinization of water in the subterranean and

surface brackish water. Desalination has in fact resulted in cost reductions, greater efficiencies,

and nearly half of the worlds water is desalinated by the Middle East countries and 15% byNorth America (Colorado River basin Water Management: Evaluating and Adjusting to

Hydroclimatic variability, 2007)

Another interesting way to conserve water is to remove the water-consuming invasive plant

species namely, cheat grass, camelthorn, Ravenna grass, Russian olive, and tamarisk, or salt

cedar America (Colorado River basin Water Management: Evaluating and Adjusting to

Hydroclimatic variability, 2007). These species are able to survive in any sort of habitat and are

imposing danger to water parks and many other resources.

Agricultural water conservation can bring about remarkable results such as employing different

cropping patterns, and different salinity control programs and so forth.


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Urban Water conservation is also under attention. These programs include water conserving

technologies (e.g., lower-flow plumbing fixtures and more efficient irrigation systems), market

incentives, regulatory policies, new landscaping techniques and the use of drought-tolerant

(xerophytes) plants, and public education announcements encouraging urban water conservation

(Colorado River basin Water Management: Evaluating and Adjusting to Hydroclimatic

variability, 2007).

By far Recycling is one of the latest methods that the people can implement to conserve water,

and it is not only efficient but also conserves the ecology.


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References

Ahmed, Ayaz., Iftikhar, Henna., Chaudhary, G.M. ( 2007). Water Resources and conservation

Strategy of Pakistan.The Pakistan Development Review, Vol. 46, No. 4.

Arnell. N.W. 1999, climate change and global water resources

Birol, Ekin., koundouri, Phoebe., Kountouris, Yiannis. (2009).Assessing the economic viability

of alternative water resources in water scarce region: the roles of economic valuation, cost-

benefit analysis and discounting.

Colorado River basin Water Management: Evaluating and Adjusting to Hydroclimatic

variability, 2007, The National Academies Press

Frederick K.D. 1995,Americas water supply: status and prospects for the future,

Vol.1.retrieved fromhttp://www.gcrio.org

J.Nemec, J. Schaake, 1982, Sensitivity of water resource systems to climatic variations,

Hydrological sciences-Journal

L .Bender. N. 2004, The impact of water scarcity and pollution on the textile industry: A case

study from Turkey,

Llyods, Global Water Scarcity; Risks and challenges for Business.

Milmo. S, September 2008, Thirsty Work, Chemistry World, p66-68

Richards, Alan. (2002). Copingwith water scarcity: the governance challenge

Tisdell. C. 2007, Economics, Ecology and the Environment; Economic change and

environmental issues: Policy reforms and Concerns in Australian Agriculture.
http://www.gcrio.org/http://www.gcrio.org/http://www.gcrio.org/http://www.gcrio.org/


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water scarcity and how should it be managed?

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