How do markets manage water resources? An experiment

We experimentally test how a private monopoly, a duopoly and a public utility allocate water of differing qualities to households and farmers. Most of our results are in line with the theoretical predictions. Overexploitation of the resources is observed independently of the market structure. Stock depletion for the public utility is the fastest, followed by the private duopoly and private monopoly. On the positive aspects of centralized public management, we find that the average quality to price ratio offered by the public monopoly is substantially higher than that offered by the private monopoly or duopoly.

Multimodel assessment of water scarcity under climate change

Water scarcity severely impairs food security and economic prosperity in many countries today. Expected future population changes will, in many countries as well as globally, increase the pressure on available water resources. On the supply side, renewable water resources will be affected by projected changes in precipitation patterns, temperature, and other climate variables. Here we use a large ensemble of global hydrological models (GHMs) forced by five global climate models and the latest greenhouse-gas concentration scenarios (Representative Concentration Pathways) to synthesize the current knowledge about climate change impacts on water resources. We show that climate change is likely to exacerbate regional and global water scarcity considerably. In particular, the ensemble average projects that a global warming of 2 degrees C above present (approximately 2.7 degrees C above preindustrial) will confront an additional approximate 15% of the global population with a severe decrease in water resources and will increase the number of people living under absolute water scarcity (< 500 m(3) per capita per year) by another 40% (according to some models, more than 100%) compared with the effect of population growth alone. For some indicators of moderate impacts, the steepest increase is seen between the present day and 2 degrees C, whereas indicators of very severe impacts increase unabated beyond 2 degrees C. At the same time, the study highlights large uncertainties associated with these estimates, with both global climate models and GHMs contributing to the spread. GHM uncertainty is particularly dominant in many regions affected by declining water resources, suggesting a high potential for improved water resource projections through hydrological model development.

Climatic risks and impacts in South Asia: extremes of water scarcity and excess

This paper reviews the current knowledge of climatic risks and impacts in South Asia associated with anthropogenic warming levels of 1.5°C to 4°C above pre-industrial values in the 21st century. It is based on the World Bank Report “Turn Down the Heat, Climate Extremes, Regional Impacts and the Case for Resilience” (2013). Many of the climate change impacts in the region, which appear quite severe even with relatively modest warming of 1.5–2°C, pose significant hazards to development. For example, increased monsoon variability and loss or glacial meltwater will likely confront populations with ongoing and multiple challenges. The result is a significant risk to stable and reliable water resources for the region, with increases in peak flows potentially causing floods and dry season flow reductions threatening agriculture. Irrespective of the anticipated economic development and growth, climate projections indicate that large parts of South Asia’s growing population and especially the poor are likely to remain highly vulnerable to climate change.

The risk of water stress

Water resources are under stress in many regions due to increasing demands and, in places, falling quality. Climate change has the potential to change the risks of water stress.1 The focus in this section is on strategic definitions of water stress, which are based on generalized indicators of the amount of water that is available and the demands on that resource. Operational definitions, on the other hand, are typically based on the reliability of the supply of appropriate quality water and are strongly determined by local conditions.