Water Markets from an Economic Point of View

Case Solution

Peter Debaere
Darden School of Business ()

Recent droughts and the consequent rise in food prices underscore that freshwater scarcity will be one of the major challenges of the 21st century. Increased demand for water due to population growth and rising living standards (with changing diets and lifestyles) put pressure on available water resources. Despite reports of an impending water crisis, the world is not running out of water. Water is a renewable global resource of which there is more than enough. The main concern is that water is distributed very unevenly between and within countries. Therefore, water scarcity is primarily a local phenomenon, and there is a growing fear that climate change could worsen the already dire situation in arid areas.

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