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water crisis

New directions in the economics of agricultural water conservation

Susanne M. Scheierling's picture

A challenging area in agricultural water management is the assessment of policy and investment options in irrigated agriculture for conserving water and adapting to increasing water scarcity, in particular when the linkages to groundwater resources and their management are to be considered and incorporated. 

However, this is an increasingly important area of research for a number of reasons.  First, irrigated agriculture accounts for about 70% of global freshwater withdrawals, and is a major contributing factor to the water scarcity situation in many countries.  Second, with almost a quarter of freshwater withdrawals for irrigated agriculture being made up of groundwater supplies—corresponding to 70% of total groundwater withdrawals—, agricultural water use is also a major contributing factor to aquifer overexploitation.  And, third, surface water and groundwater are closely linked in most parts of the world, with groundwater discharge contributing to the base flow of streams and surface water contributing to groundwater recharge, and these interactions are intensified by human action, in particular water withdrawals for irrigated agriculture.  Even in cases where irrigated agriculture depends mostly on surface water, groundwater impacts therefore need to be accounted for when assessing water conservation efforts (and vice versa).

New approaches in water resource economics

Susanne M. Scheierling's picture
In many parts of the world, changing demand and supply patterns are contributing to an increasing physical scarcity and competition for water resources. Historically, new demands have been met by developing additional supplies—with the incremental cost of water remaining relatively constant over time due to the ready availability of water development project sites to meet growing demands. As the water economy moves from an expansionary to a mature phase, incremental costs are sharply rising, and interdependencies among users and uses are greatly increasing. With this move, the issues to be addressed by water economists tend to become more pressing, broader and more complex. While in the expansionary phase structural or engineering approaches to water management tend to be the main focus, in a maturing water economy nonstructural or institutional options for solving water problems receive increasing attention. In particular, resource allocation and valuation issues move to the forefront of economic inquiry.

How can growing cities achieve water security for all in a world of scarcity?

Yogita Upadya Mumssen's picture
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Just a few months ago, the World Economic Forum’s 10th Global Risk Report ranked water crises as the top global risk in terms of impact, more than the spread of infectious diseases, weapons of mass destruction or interstate conflict. With such global implications, we face a considerable challenge to develop the appropriate response. But we have also long grappled with a simple truth: water management is a complex web of local situations and issues, dictated by hydro-climatic conditions, spatial and demographic patterns, complex political economy dynamics, and technical considerations.
One increasingly pressing issue is the widening gap between the supply of water resources and the demand for water services in rapidly growing urban areas. This is exacerbated by dwindling resources in the face of climate vulnerability, and a legacy of poor governance and wasteful uses. This gap is most extreme in arid areas, which have few contingency options, and are left with few, if any, fallback options in case of further strain on the system.

In China, Innovation in Water Rights Leads to Real Water Savings

Liping Jiang's picture

Also available in: 中文

China’s most arid regions are facing an increasingly serious water crisis, and local water policies often aggravate the problem. In such climates, growth in the agricultural sector has come with high environmental costs.

With the help of new technologies that measure real water consumption in agriculture, governments are designing innovative water rights systems that actually save water. Based on results from two successful pilots, the World Bank Group is partnering with China to tap into science to transform water management in agriculture at the national level.