Water Economics and Scarcity
Water prices depend on multiple factors that make this essential resource expensive for those who need it most. Transport costs from source to destination, market dynamics where increased demand drives higher prices, difficult access at sources, and pollution cleanup all inflate costs significantly.
The Water Poverty Index measures how water-impoverished countries are based on access, capacity, use, environment and resources - lower scores indicate greater water stress. International Monetary Fund involvement often requires countries to privatise water companies as loan conditions, potentially making water less accessible to poor populations.
Physical causes of water insecurity include climate patterns affecting freshwater availability, rapid runoff that prevents water usage, high evaporation rates preventing sustainable storage, and sea level rise causing saltwater to contaminate freshwater aquifers.
Human causes create equally serious problems: chemical pollution from agriculture, industry and domestic wastewater contaminates fresh sources, over-abstraction uses water faster than replenishment, and hydroelectric plants hold back water in reservoirs. The Aral Sea exemplifies extreme over-abstraction - formerly a massive lake, it's shrunk to just 10% of its original size due to irrigation canals and high evaporation rates.
Economic reality: Privatising water can improve efficiency and conservation, but it can also make this basic need unaffordable for vulnerable populations.