Water Scarcity: A Global Issue

Table of Content

For many of us, water is just a free beverage to save a few bucks at a restaurant. As all economists know, there is no such thing as a free lunch, and there is no such thing as free water. Water is something we take for granted far too often without taking in the real costs of what it takes to get the water. This water scarcity issue is present right in our back yard, as Alabama fights with Georgia and Florida to get as much as the valuable resource as they can. Lake Lanier near Atlanta, GA, is the pivotal issue between the states as they decide how much of the water from the lake should be allocated to each state.

Further west, a water dispute between the US and Mexico exists as to how the Colorado and Rio Grande rivers should be used by each country. This water scarcity issue is perhaps best shown by the dispute between India, China, and Pakistan over water from the Brahmaputra River. In a region with such an enormous part of our world population, determining an efficient allocation of water to each area is extremely critical. This project will seek to explain the history and background of these issues, examine current actions regarding the issues, and look to the future impacts of these issues.

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Tri-State Water Wars: Alabama, Georgia, and Florida Water wars are something many Alabamians are familiar with. Alabama, Georgia, and Florida are all still fighting over what is to be done with the valuable water resources Lake Lanier provides. The lake, which sits close to Atlanta, was built by the Army Corps of Engineers to help with flood control and hydroelectric power. Alabama and Florida have challenged the use of the lake because using the water mainly for Georgia interests restricts their water availability.

Alabama’s river system is hurt by Lake Lanier’s water being used up before hitting Alabama’s river system, and Florida shares similar concerns in addition to concerns about damage to its ecosystem. There have been multiple attempts at legislation, court cases, and compacts to fix the issue, but each has still left the states unsatisfied with the outcomes. Going forward, the issue may require a decision by the highest court that will be a final decision, as the states have been unable to come to a conclusion as to how Lake Lanier’s resources should be used for their state and the other states involved.

The tri-state water dispute first became an issue when Alabama filed suit against Georgia in 1990 citing that Georgia had violated the National Environmental Policy Act (NEPA). According to the NEPA, legislation that involves the environment of the parties which may be affected by the legislation must be given strong consideration to ensure that the environment of the parties involved is protected1. Alabama’s claim, which was later joined by Florida, stated that using the lake for Atlanta’s personal use benefit was harmful to waterways downstream in Alabama and Florida.

After years of disputes between the states over Lake Lanier, it seemed the issue had begun to come to a close in 2009 when District Judge Paul Magnuson ruled that Atlanta could no longer keep using Lake Lanier as an endless water supply for the city of Atlanta. District Judge Magnuson stated in his ruling that “Too often, state, local, and even national government actors do not consider the long-term consequences of their decisions. ” 2 Magnuson’s view on Lake Lanier’s purpose was that it needed to stay available for states which may rely on the Lake for its environment.

Even more important, Magnuson was trying to send a message to Georgia that use of such a scarce resource that goes unaccounted for can be detrimental to the environment in the long run. This issue of state and local governments not ensuring that their decisions are best for the overall good in the long run may create an even bigger issue for Lake Lanier down the road. Without methods of conservation and responsible use of Lake Lanier’s water in place, we may find ourselves left with no water left for important uses when droughts come to the southeast.

Judge Magnuson’s ruling in 2009 was a pivotal point in the waters wars dispute between Alabama, Georgia, and Florida, but it was not the nail in the coffin. On June 28, 2011, The 11th Circuit Court of Appeals decided to overturn Judge Magnuson’s ruling and give Georgia an edge in the water wars dispute. Regarding the use of Lake Lanier for Atlanta’s personal drinking water, the court announced “we cannot conclude that Congress intended for water supply to be a mere incidental benefit”(page 57)3.

The court’s view on the Army Corp of Engineers building Lake Lanier is that it could or would one day become a source of drinking water for nearby areas. This was a big blow to Alabama and Florida’s arguments that the lake could not be used for these specific purposes. The decision by the court also gave the states another year to determine the best way to use Lake Lanier’s resources and come to a consensus, but that deadline has since come and gone with little action.

Here in Alabama, parties with interests tied into the water dispute saw the court’s decision as a wakeup call for the state to take responsibility and do the right thing for the future of the issue. Cindy Lowry of the Alabama Rivers Alliance noted ,“As the only state in the tri-state water conflict that does not have a comprehensive water management plan, Alabama continues to be in the weakest position for negotiating the needs of people, businesses, communities, and ecosystems. 4 Gil Rogers of the Southern Environmental Law Center also stated that “The current severe drought in southeast Alabama is a stark example of how important preparation and planning are for managing our water assets. “4 With or without a favorable ruling from any court, the parties affected by legislation dealing with Lake Lanier know that conservation of scarce resources such as water are pivotal to planning ahead for severe times of drought when water availability is extremely low.

It seems the main problems between the three states are not necessarily the exact available gallons of water in Lake Lanier, but instead the lack of cooperation and management of the already available water resources each state has. Alabama and Florida may argue that their ecosystems will be hurt without Lake Lanier, but at the same time Atlanta will be extremely hurt without the availability of the lake for drinking water purposes. Who has the property rights in this case? It is obvious that the courts and states disagree.

Even still, the states must ensure that the water use of other bodies of water they already possess with full property rights are allocated in a way such that net benefit is maximized between uses. In the most extremely simplest of forms, the water dispute between Alabama, Georgia, and Florida is one of an open access regime. Each state can think of the lake as something they can continue to use at a very low extraction cost for its own benefit. Each state fails to manage and take action to promote proper allocations of the water.

In this simplified case, the states will use Lake Lanier until the total benefits the lake provides become equal to the total costs of getting the water. Even in the most elementary of higher education economics courses, this allocation is an obvious incorrect solution for proper extraction of the water. The states must realize that in order to maximize total benefit, they must avoid the previous solution and instead look at the margin. They must allocate in a way such that marginal benefit is equal to marginal cost. This will provide the states with maximum benefits from using Lake Lanier.

However, this is easier said than done, as states will most likely not seek the overall common good and instead seek to maximize their own benefits. It is often the case that the politicians which make the legislation necessary to provide efficient allocations of scarce resources do not listen to the sound advice of proven economic principles which provide them with the correct answer that they are looking for. In order to best resolve the dispute, the states involved must seek economic insight as to what should be done with Lake Lanier.

It is obvious that the states have not chosen the best ways to reach maximum benefits for Lake Lanier’s use, and they will not reach the best solution until they seek out an outsider who knows what they’re talking about. The Supreme Court has shown it will not fix the problem for the states, so the states must fix it themselves. States must put aside their differences and determine the solution which is best for the overall well-being of the states, maximizes net benefits, is sustainable in the long-run, and is a plausible piece of legislation. U. S and Mexico

The Rio Grande/Rio Bravo River runs over 1,900 miles from southwest Colorado through New Mexico and along the Texas-Mexico border all the way into the Gulf of Mexico. It’s river basin covers over 330,000 square miles and provides water resources to millions of people. 5 Water allocation from this river system has caused a lot of conflict over the past hundred years and was the focus of a 1944 treaty between the United States and Mexico. Population growth along the border in recent years as well as drought have intensified the conflict and caused many to call for a new treaty or other solutions to solve the water issues in this region.

The 1944 Treaty between the United States and Mexico was enacted to determine how the water from the Colorado and Rio Grande Rivers would be allocated. The Rio Grande was divided up according to its major tributaries. The United States would receive all the water from the tributaries originating in the United States as well as one third of the water from the six major tributaries that originate in Mexico: the Conchos, San Diego, San Rodrigo, Escondido, Las Vacas, and Salado Rivers. This one-third of the water must equal at least 350,000 acre feet per year averaged over a 5 year cycle. An acre-foot is about 326,000 gallons of water, enough to cover an acre a foot deep. In exchange for this water from Mexico, the United States agreed that at least 1. 5 million acre feet of water would flow into Mexico every year from the Colorado River. All water from smaller tributaries or rainwater is divided up equally between the two countries and is called 50/50 water. An Amendment called “minute 234” was added to the treaty in 1969 that allowed Mexico to incur a water debt in the five year cycles with “extraordinary drought” that could be paid back in the next five year cycle.

The term “extraordinary drought” has yet to be defined. 6 Starting in 1992, Mexico became unable or unwilling to maintain the 350,000 acre feet of water flowing into the Rio Grande that is required by the treaty and incurred a water debt. The causes of the water shortage were a drought in the area at the beginning and then the rapid population growth and urbanization of the areas in northern Mexico along the border after the adoption of the North American Free Trade Agreement (NAFTA). The problem became particularly bad in the early 2000’s when parts of the Rio Grande totally dried up and in the summer of 2001 the river failed to flow into the Gulf of Mexico for the first time in recorded history. The following summer in 2002 the river failed again to flow into the gulf and new policies were enacted to relieve the stress. The North American aid bank provided money for Mexico to improve the efficiency of its irrigation systems provided that one third of all the water saved would go to repay the water debt. The debt increased to a maximum of 1. 5 million acre feet of water in 2002, and was paid in full by September of 2005, mostly due to the repayments from efficiency gains. In the period between 1992 and 2002 the (Rio Grande Regional Planning Group) estimated that Texas lost around 100 million dollars in gross regional product because of Mexico’s water debt. Mexico has avoided incurring another water debt since 2005 through continuing to increase efficiency in its irrigation and urban water systems.

However, an extreme drought in 2011 and a rapidly growing population along the border have caused many to believe extreme water shortages will occur in the near future. The economics of the water problem along the Rio Grande are quite simple. There is very high and growing demand for the water and the supply is relatively fixed. So that the governments, industries, and people involved in this problem have three options. They can try to decrease demand, increase supply, or just let the price rise.

In the 1992 through 2005 problem years increased efficiency caused the demands of Mexican farmers and ranchers to decrease significantly and alleviated the problem in the short run. However this solution has limits because there is a minimum amount of water that a person, plant or animal needs to survive and no amount of efficiency will lower that. While, efficiency will still be very important to meeting the water needs of the region the population is expected to double from the 2000 levels by 2020 and even with perfect efficiency demand will still have increased. Supply is relatively fixed in that all the major sources of surface water are already being utilized and increasing the amount of ground water being used is not seen as being renewable by hydrologist. 8 Authorities in the area can have an effect on supply though because of the cyclical nature of the surface water resource by taking a counter-cyclical approach to water management. Basically, by storing up large amounts of water in the wet years and releasing this water in the drought years, the Mexican and American governments can smooth out the supply of water and hopefully keep the river from going dry or failing to reach the gulf.

Supply and demand can only be manipulated so much though and eventually the price is going to have to rise and probably significantly until people, industry, and agriculture begin to leave because of the high price or it becomes economically viable to pipe water in from other water rich regions. All three of these approaches will have to be employed to maintain sustainable water use along the Rio Grande River and additionally they will have to be implemented on both the U. S. and Mexico sides of the river if they are to be affective. First, a U.

S. Mexico water authority most be established to create similar prices, standards, and practices along the river because inefficiencies on one side of the river would be exploited at the expense of the other. In particular currently in Mexico all water is owned by the state, water rights need to be established as well as a water market so that Mexicans can buy the water they need and sell the water they don’t. Also water trade between the countries could occur and the water could easily move to its highest valued use whatever that may be.

Water banks could also be established that allow a person in either country to store water they don’t need right now and allow others to use it, but be able to withdraw water later when he does need it or wants to sell it. Prices need to set at a level that reflects the margin cost of the water as well as the social and environmental cost. The marginal cost will be reflected in the market price but the social and environmental cost must be added through taxes or transaction fees on water use and those revenues used to enhance sustainable water use.

Mexico needs to invest further in their water infrastructure to bring it on par with the standards both countries agree on and the two countries need to work together to establish plans for counter-cyclical water use. How to store the water, and the conditions under which the stored water will be used, need to be agreed upon by both countries. These steps will insure that water is efficiently used for its best uses at an appropriate price in the Rio Grande water basin. International Water Wars: The Brahmaputra

To call a water war a rivalry is to call it exactly what the word “rivalry was meant to mean. “Rivalry” comes from the Latin rivalis, or “one using the same river as another. ” Riparians —countries bordering the same river—are often rivals for the river they share, a truth even in ancient times. The water war disputes in the U. S. are not the only major disputes around the world. Water wars happen widely around the globe. According to State of the World: Redefining Global Security9, international basins that include political boundaries of two or more countries account for over 45. of the Earth’s land surface, host about 40 percent of the world’s population, and account for approximately 60 percent of global river flow. It is not hard for one to imagine the potential or revealed conflicts between countries over trans-boundary rivers. In this example of international water wars, we will examine two of the largest developing countries in the world, China and India, along with several neighboring countries. The Brahmaputra River, also known as the Yarlung Tsangpo River,10 is a trans-boundary river that crosses the territories of China, India, Bangladesh and other three small countries.

It also functions as the second largest river in south Asia, only after the Ganges River in its total volume, and provides numerous water resources to South Asian countries. In the year 2010, China overtook the U. S. to become the world’s largest energy consumer. With such great demand for a scarce resource such as energy, China is actively exploring ways to fulfill its growing need. China is now the largest hydroelectricity producer in the world, producing 213,000 MW by the end of 2010. While it is still planning to expand its production capacity over the coming decades, China expects to reach 430,000 MW of hydropower production by 202011.

Based on their plan, the relatively undeveloped trans-boundary Brahmaputra River becomes the unavoidable target of water dispute. According to the data from Global Water Forum, China has built up 10 dams on the upper stream Brahmaputra, with 3 more under construction and 7 more under consideration. Those dams are all small in size since all of them are on the tributary of the Brahmaputra River; however, China’s future plans also include building 5 major dams directly on the Brahmaputra mainstream.

The first one is the Zangmu hydropower project, which would cost $1. 18 billion and generate 510 MW by the time it is completed in 2014. It was originally designed for the projects to benefit both China and the downstream countries; however, the neighboring countries, especially India, viewed that as a huge threat to the Indian water resources, even if only 15% percent of the volume is from the Chinese basin. Now, both countries have entered an era of perennial water scarcity. China and India are both water-stressed economies.

The large amounts of irrigated farming, along with the rising population, have led to a severe struggle for more water. Brahma Chellaney, who is the Professor of Strategic Studies at the New Delhi-based Center for Policy Research, predicted that China is taking the advantage of locating at upper stream as a political weapon and trying to wage a water war against India. At a conference, he addressed the crowd saying “There is no doubt that China will start the war, it is just the matter of when. ” There is no clear evidence that China would wage a water war against its neighbors, but since the

Brahmaputra River is supposed to provide a limited amount of water resource to South Asia, it is inevitable that every country would fight for their own best interest. China’s disruptions in the river’s flow have already influenced India. One small area of India used to be undisturbed until the year 2000, when a huge wall of water flushed through the Himalayan gorges in northeast India and struck the islands in the Brahmaputra River. It took only seconds for the houses in the area to collapse. No one knows exactly what happened, but everyone seems to know whom to blame — China.

However, China is not alone is disrupting the region’s water flows, since some of the others are doing the same thing or even worse than that. But as China controls the upper stream and builds up more dams, it has become the single biggest target for all other countries. On the other side, it is interesting to see how countries like India blame China for damaging the ecological environment while doing the same thing to their environments. As State of The World: Redefining Global Security mentioned, most of the international basins problems are solved peacefully.

Still, water wars result in a pervasive tension between nations and are difficult to overcome. Usually, these kind of issues end up with a “lack of evidence”, which is exactly what happened between China and India. Because it is impossible to directly see the relation between building dams and flooding, the nature will not immediately display the damages resulting from the actions. On the other hand, since this kind of international dispute is usually combined with plenty of other issues, such as territory problems, etc. it is difficult to solve the problems by adopting the pricing method discussed in class, because the Water Pricing Method is adequate for domestic or national water disputes only. Fortunately, historical records prove that international water disputes can be solved peacefully even among enemies. The most critical part of solution is to move towards a strong level of cooperative water management. Any kind of unilateral movements will inevitably result in a tenser situation. Therefore, we suggest that China and India should provide a forum for a joint negotiation along with other riparian countries, including Bangladesh, Nepal, etc.

All relevant countries should be attending and make sure to solve the problem at a national decision level, in order to comfort and avoid conflict between unofficial and non-governmental organizations. Secondly, all nations should come up with decisions that consider the interests of all members instead of themselves, in a way that could satisfy and be accepted by all stakeholders. It is also important for all to compromise on the decision in order to achieve the best solution at social level.

Third, all the member countries need to build trust and confidence on each other, in order to cooperate over this issue. For example, after the 2000 flood took place in India, if everyone continues to blame China for the disaster without any evidence, which might result in a prejudiced opinion for all towards China, then it is not likely that China would sit down and work with others. As stated earlier, there is no such thing as a free lunch, and water scarcity is a wonderful example of how we cannot take our natural resources for granted.

Governments have failed to reach a consensus often times because they fail to ask the right people the right questions. These water war issues cannot be solved without sitting down and determining efficient allocations for each player in their situation. It is undeniable that countries will seek to fulfill their own self-interest, but doing so will most likely leave everyone with inefficient outcomes. Water cannot be thought of as a completely renewable resource especially in these cases. Governments cannot continue to act as if the water they are using will always be available to them.

Economic analysis is the best way to determine which government should receive which amount of water from these scarce bodies of water. If politicians can consult economic experts and listen to their advice, implementing the advice into policy action, we can probably expect that water wars around the globe will begin to be settled in ways that may not make everyone happy but provide the greatest amount of welfare for the players involved. Until then, we can expect governments to continue to argue over water availability only to reach inefficient outcomes.

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Water Scarcity: A Global Issue. (2017, Feb 02). Retrieved from


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