![]() In the Colorado River Basin, for example, an assessment of demand and supply options for reducing risks of water shortages showed that the costs of generating one cubic meter of water range from US$0.03 for agricultural water conservation (through practices like “deficit irrigation”) to more than US$2.43 for imported water supplies. ![]() Supply augmentation can also come with high social, economic and environmental costs. These efforts often ignore the paradox of increasing water supply: while increasing supply may temporarily alleviate water scarcity, it also encourages levels of demand that cannot be sustained through dry periods. Despite their potential, water markets and other incentive-based approaches to managing freshwater have rarely advanced beyond pilot initiatives, where they face political resistance, financing shortfalls and data deficits.Įven as water insecurity has gained more attention, policy reform and public investment tend to favor supply-side solutions such as dams, desalination or distribution system modifications. Yet attempts to regulate demand-including education, conservation technology, regulations, planning processes and economic incentives-have failed to gain traction. By 2050, approximately four billion people are expected to live in severely stressed river basins. ![]() Experiences from California to Cape Town are emblematic of these global trends, and emphasize their urgency. The intensifying anthropogenic pressure on the water supply-including climate change impacts-has revealed that present-day water systems were not designed to meet our twenty-first-century challenges. Such pressures are straining rivers and aquifers, leading to hotspots of competition for water that often leave ecosystems parched-to the detriment of nature and people. The human population has grown rapidly since the industrial age-as have cities, agriculture and hydropower. ![]() Unsurprisingly, a rise in demand is the major reason that competition for freshwater resources has increased. Incentive-based water allocation is one strategy that could ensure flows for both human and environmental needs-if we learn to implement it properly. However, there are untapped opportunities to get more from the water available to us, and good governance is a crucial part of the equation. With more than half the global population facing severe water scarcity at least one month out of an average year, it is clear that threats to water security now extend beyond the arid parts of the world. ![]()
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