Water Economics: An In-Depth Analysis of the Connection of Blue Water with Some Primary Level Aspects of Economic Theory I

Kalomoira Zisopoulou,Dimitris Zisopoulos,Dionysia Panagoulia

doi:10.3390/w14010103

Kalomoira Zisopoulou, Dimitris Zisopoulos + Show 1 more

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https://doi.org/10.3390/w14010103

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Abstract

An analysis of the following aspects of water economics was undertaken: Water as an Economic and Social Good, Modes of Government Intervention, Water Scarcity in Economic Theory and Agricultural Water Management Changes, with the support of over 300 sources. Emphasis was placed on the connection with primary aspects of economics, in contrast to the usual applicative expositions found in water economics literature. This is a novel approach comparing international bodies’ definitions with economic theory at primary level which leads, upon occasion, to serious contradictions which were exhibited in broad lines. Furthermore, it compares the global implications of these definitions to the existing reality at country level, and a lack of bilateral consistency is exhibited. The uniform picture presented at global level is shown to become a non-uniform one at country level, where sharp variations in resources and availability form a competitive market between nations, and water-rich countries already possessing a competitive advantage are shown to attain a water-based comparative advantage as well. It is shown that although at country level water has a quasi-public good character with minimal private good market existence, this is achieved with the existence of a private goods market at international level via international trade in virtual water. A novel approach to management problems stemming from authority levels starting at global level and ending at farm level is analyzed and redressed by employing reality gap theory.

Highlights

Publisher’s Note: MDPI stays neutralWater scarcity is manifested as physical scarcity or economic scarcity [1]
The purpose of this paper is to examine in depth some topics of the structural complexity of the economic aspects of water at primary level: Water as an Economic Good, The
A later, more precise definition [26], was given in terms of resource supply: blue water is the water in aquifers, lakes, and dams, and green water is the moisture in the soil; these are related to the liquid blue-water flow through rivers and aquifers and the green water vapor flow back to the atmosphere

Summary

Introduction

Publisher’s Note: MDPI stays neutralWater scarcity is manifested as physical scarcity or economic scarcity [1]. Economic scarcity is defined as the state where, regardless of physical scarcity, the socio-economic system is unable to utilize existing water in order to satisfy all demands [4]. This is because it may lack the storage, timely distribution and infrastructure development for access [5] or human, institutional and financial capital place a limit to water access [6,7]. Water was declared to be an economic good [8,9,10] and is considered to be a production factor in Computable General Equilibrium (CGE) modelling [11], where the Armstrong condition for non-substitutability can be sidestepped [12] in countries with import/export trading in virtual water [13] goods. Demand for delivered water was low but growing, and elastic at low prices—inelastic at high prices, with minimal with regard to jurisdictional claims in published maps and institutional affiliations

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