Water for Grain: The Great Plains in a Time of Globalization

Abstract

Water is an open-access resource, whose benefits can be enjoyed by many. This case on water use in America's breadbasket, the Great Plains, illustrates the “tragedy of the commons” in an international context. The case details water depletion in the Ogallala Aquifer, which lies beneath the Great Plains. At the same time, questions are raised about what constitutes optimal use of groundwater resources and what the role of U.S. agricultural and trade policy is or should be.This case is used in Darden's elective, “The Global Economics of Water.” It would also work well in courses covering environmental sustainability or international economics. Excerpt UVA-GEM-0114 Aug. 27, 2013 Water for Grain: The Great Plains in a time of Globalization The reaction of Pascal Lamy, the outgoing director general of the World Trade Organization (WTO), to the launch of bilateral negotiations between the United States and Europe in July 2013 was not very diplomatic. The former European Commissioner for Trade seemed undeterred by praise that the EU–U.S. negotiations were to reinject dynamism into the global trade liberalization process. For reference, the multilateral Doha Development Round that was launched over a decade earlier with the goal of liberalizing trade in agricultural commodities still had not reached an agreement. No doubt, Pascal Lamy worried that the growing number of regional trade agreements would undermine the WTO's position as the main platform for multilateral trade negotiations. As a high-ranking official, however, he made a more general point that revealed a clear sense of frustration on his part. “None of these bilateral, plurilateral, mini or mega [negotiations] will ever lead to an agreement to reduce trade-distorting agricultural subsidies,” he said. “We've heard a lot about this EU–US [negotiation towards a trade agreement]. But nobody ever said that these two elephants would put on their menu the reduction of their trade-distorting subsidies. And they still have quite a lot of them.” . . .