Tuesday, January 01, 2008

Water, Water Everywhere, But Just 1% to Drink: The Global Water Crisis—Part V

There are a number of reputations that seem to persist, some for very long periods, whether deserved or not. Take the incomprehensible (to most) field of Economics that has suffered the ignominy of bearing a title that would turn even the most adventurous students from its halls of learning. It has been known as the dismal science for over 150 years with few defenders.

This has resulted in a multitude of sources listing jokes about the profession and its members. Here are a few of the humorous references:
  • Q: Why was astrology invented? A: So that economics could be considered an accurate science.

  • An Economist is someone who didn’t have the personality to be an accountant.

  • Q: What is a recent Economics graduate’s usual question in his first job? A: What would you like with your French fries sir?

  • The First Law of Economics: For every Economist, there exists an equal and opposite economist. The Second Law of Economics: They’re both wrong.

  • An Economist is an expert who will know tomorrow why the things he predicted yesterday didn’t happen today.

  • A study of Economics usually reveals that the best time to buy anything was last year.

  • An Economist is someone who sees something working in practice and asks whether it would work in principle.

Hey, don’t blame me for the above. I was an Economics major in my undergraduate days.

Despite the jokes, there are times when valid issues are raised, relating to economic theory. One such, the water-diamond paradox was mentioned in this series of articles earlier. Although the famous economist Adam Smith is given credit for recognizing the issue in his seminal book, The Wealth of Nations, published in 1776, it is now thought that others, such as Nicolaus Copernicus, Galileo, and John Locke had previously tried to explain the inconsistency.

The paradox arises based on the contradiction that while water is critical for human survival, diamonds, which have no obvious utility, are substantially more expensive. Adam Smith’s explanation for this perplexing reality was that supplying diamonds requires more labor than does water, but this solution is now considered to be incorrect. The accepted solution is that while the total utility obtained from water is great, the marginal utility (the use to which the goods is put) is lower for water since it is more plentiful than diamonds. It is, in part, this scarcity that adds to diamonds additional marginal utility. To put it another way, an extra ounce of water would provide much less in the way of extra satisfaction than would an extra ounce of diamonds. However, this paradoxical question that has persisted for over 230 years may, in the not too distant future, no longer exist since to an increasingly thirsty world water may become scarcer, and even more expensive than diamonds.


Ironically, one geographic area where the diamond-water pricing may very well eventually reverse is Africa, where diamonds are most abundant but the fresh water supply is constantly contracting. It has been estimated that 38 percent of Africans do not have access to clean drinking water—by far the highest proportion in any region of the world—and 40 percent do not have access to basic sanitation. At a Congressional hearing of the House Foreign Affairs Sub-committee last May, it was verified that “ Africa is one of the most water impoverished regions…and the lack of clean water claims the lives of 4900 children every day.” In fact “More than one child in Sub-Sahelian Africa dies every minute from diarrhoeal disease…a direct result of inadequate water supply, sanitation, and hygiene.” At a recent water conference, experts said that an astounding 300 million Africans were facing a water crisis.

A report issued by the Economic Commission on Africa states, “Africa is one of the world’s driest continents. The diminishing availability of usable water in the face of rising demand creates the potential for disputes and conflicts over waster resources, both within and between countries.” Compounding the problem is the fact that in several African countries, 80 to 90 percent of water originates outside their countries. In addition, Africa has some 80 transboundary rivers flowing through several countries. For example the Nile travels through 10 countries, the Congo—that holds almost 30 percent of Africa’s fresh water resources—through nine, the Niger through nine and so on. A UN Development Programme Report suggests that potential “water wars” are likely in these areas where rivers and lakes are shared by more than one country, as countries fight for access for scarce resources. In fact the current strife in Darfur is primarily due to a conflict over water. Diamonds are already beginning to look cheap compared to water.

In its section on Asia, the most recent report (November 2007) by the Nobel Prize winning Intergovernmental Panel on Climate Change (IPCC) predicts that fresh water availability in Central, South, East, and Southeast Asia will decrease due to climate change. It suggests that along with population growth and increasing demand arising from higher standards of living, (this) could adversely affect more than a billion people by the 2050’s.

The scale of the problem is almost too large to comprehend because of the population numbers involved. Some 40 percent of the world’s total population (2.5 billion) lives within just two Asian countries, China and India. Yet it is thought that 80 percent of China’s and 75 percent of India’s surface waters are too polluted for drinking, fishing, or even bathing.


The introduction to a recent report by the Heinz School of Business at Carnegie Mellon University states: “The international spotlight has highlighted China’s rise in economic power for years. China’s rapid growth has affected everything from world energy supplies to grain prices and is now threatening the health of it citizens. The environmental degradation that continues to coexist with economic growth has caused unsustainable rates of deforestation, high levels of air pollution, and low levels of water quality and quantity.”

Since coal provides 75 percent of its energy needs, more than 70 percent of China’s population is exposed to air pollution. Research has shown that the air in the most polluted Chinese cities contains such high levels of toxins that when a child breathes throughout the day, it is equivalent to smoking two packs of cigarettes, and this air pollution causes 300,000 premature deaths a year. As a result of factory and car emissions, acid rain now affects over 40 percent of arable land.

China ’s water crisis seems to be approaching the catastrophic level. In 2006 the vice-minister of construction was quoted in China Daily as saying the country is struggling to deal with the world’s worst water crisis brought about by run-away pollution, misuse of resources, widespread drought, and a too rapid economic expansion. That’s quite an admission from a government official. He is quoted, “ China is facing a water crisis more severe and urgent than any other country in the world.”

It is difficult to believe that China can maintain its booming economic pace considering it is the second lowest of any country in terms of its per-capita water holdings of 2200 cubic meters, a number that is just 25 percent of the world’s average. However, its problems are not only quantitative but qualitative as well. For example, according to the latest figures from China’s State Environmental Protection Agency, an estimated 70 percent of the water in five of its major rivers was not even suitable for human contact, let alone consumption. Furthermore this organic water pollution has penetrated beyond infecting surface water found in lakes, rivers, and streams. Over half the cities now have polluted ground water.

Beyond that, of its 669 cities, 442 suffer moderate to critical water shortages, including 30 of the 32 largest cities. The result is that 700 million Chinese drink polluted water every day, and 750 million do not have access to improved sanitation. The meager supply of clean water is falling fast and the central government admits that it expects the peak water shortage to occur in 2030 when the population rises to 1.6 billion. At that time it is estimated that China will hold just 1700 cubic meters per-capita—a level the UN defines as “threshold of concern.”

Innumerable reports of critical medical problems are surfacing. Various regions of China are reporting that contaminated water is resulting in significantly higher rates of various diseases such as fatal intestinal cancer; brittle and cracked bones; liver and esophageal cancer from mercury in rice; a region where for years no male has been healthy enough to pass the physical exam to enter the army. There are also numerous reports that depict factories dumping untreated wastewater directly into rivers that destroy fish and infects people with dysentery. As the population increases so do the number of factories that require water to function. These factories create a vicious cycle of increasing demand and pollution on a dwindling supply of water. Water is being used at an unsustainable rate.

There are many other problems, social, political, legal and regulatory that must be resolved if China can successfully sustain its economic growth at the same time it protects the health and well-being of its citizens. Solutions for these multiple problems will be a long time coming and will exact a stupendous cost.

Varying degrees of water scarcity exists thought the world in both undeveloped and developed countries. The former group would include Bangladesh, India, Iran, and Libya. The latter would list Australia, Canada, Mexico, Japan, Spain, England, and Brazil. Although the United Nations is involved in publicizing the problem, few countries, including the United States, are taking aggressive enough action to resolve the issue. Is a problem this complex solvable? Perhaps this column will tackle that question sometime in the future.


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