Effects of Undervaluation of Ecosystem Services: Highlighting Cost of Water

Abstract

AbstractWater scarcity has been increasing worldwide with the accelerated population growth rate. In the 20th Century, water use has risen up twice than the rate of population increase globally and caused water shortages with the effect of intensified climate change. By the end of the last century various researches underlined closing threats to the environment and specifically on ecosystems. Ecosystem services are essential for human beings in terms of providing clean water, aesthetic value, ecotourism activities, timber, non-wood forest products, pollination, flood and erosion control, carbon sequestration, climate regulation, recreation, and also cultural services. Among these provisioning, regulating, cultural, and supporting services water-related ones such as the creation of water cycle and wetland habitats, purification of water, production of drinking water, supporting biodiversity and wildlife habitats are vital for the continuity of the world. While estimating the cost of water, indirect use, option and non-use values are often neglected which causes the improper calculation of total economic value. Inaccurate estimation of water value also creates externalities that are not reflected in the total economic value, leading to excessive use of sources. Sustainable use of water requires rational use of natural resources without wasting, polluting, and unsustainably managing them. This study highlights the need to better understand the sustainable use of water resources, internalising water-related externalities, accurate valuation of water costs and also water management related policy issues. Furthermore, it draws attention to the drawbacks on the issue of considering water as a “free good”.KeywordsWater costEcosystem servicesForestsTotal economic valueEconomics