Analyse the social implications of water scarcity.
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SOCIAL implications of water scarcity
Among the economic implications of water scarcity is the impact on businesses worldwide leading to higher operating costs and staying competitive. For global firms controlling costs is difficult but it worsens when the price of water increases exponentially to where margins shrink precariously. This causes firms to regard water access as a competitive advantage and relocate when possible. For example, a firm will give preference to relocating to areas where water risks are lowest such as moving to a city located by a lake, river, or river basin.
Cities such as Milwaukee and Chicago are preferred by firms over a city far from fresh water. Many businesses want to have easy access to water resources that are healthy, reliable, and viable or else they cannot expand nor hire or maintain their workforce. A clear example is the situation in Flint, Michigan, where the water supply has been severely damaged and will take years to remedy. In the meantime, firms that regarded Flint as a potential relocation area are now less likely to consider it. The lack of water will have a domino effect on communities: local commerce declines, incomes go down, tax revenues decrease, population declines due to lack of employment opportunities, cities and the surrounding communities shrink dangerously. The bottom line is that businesses need water: According to UNESCO, in high income nations industry accounts for up to 59% of total water use.
Another key economic implication of water scarcity is the effect on agriculture. While agriculture contributes to water scarcity, it is also highly dependent on this resource. In places such as Morocco, dwindling water supplies have meant environmental deterioration and land use loss for agricultural purposes has been estimated at approximately $350 million USD. Water scarcity impacts India, China, and the Middle East which face serious drought conditions thereby causing farms to reduce their crop production and food prices to spike dangerously. In China in 2006, drought conditions affected or threatened 182 million hectares of farmland, 8.7 million livestock, and 95 million people.
Water is vital to human existence — and a big concern for policymakers, business leaders, and economists is its heightened scarcity.
If water is neglected by societies and governments, then the odds are they will eventually collapse. Without water, businesses ranging from family farms to major corporations face multiple problems, including higher costs and long-term viability.
These higher costs will eventually be borne by consumers and make water a more expensive commodity than oil and gold combined. By 2025, it is projectedthat two-thirds of the globe’s population will face water shortages. Water scarcity is a new addition to our modern lexicon with economic implications that will alter policy-making for rich and undeveloped nations alike.
Among the economic implications of water scarcity is the impact on businesses worldwide leading to higher operating costs and staying competitive. For global firms controlling costs is difficult but it worsens when the price of water increases exponentially to where margins shrink precariously. This causes firms to regard water access as a competitive advantage and relocate when possible. For example, a firm will give preference to relocating to areas where water risks are lowest such as moving to a city located by a lake, river, or river basin.
Cities such as Milwaukee and Chicago are preferred by firms over a city far from fresh water. Many businesses want to have easy access to water resources that are healthy, reliable, and viable or else they cannot expand nor hire or maintain their workforce. A clear example is the situation in Flint, Michigan, where the water supply has been severely damaged and will take years to remedy. In the meantime, firms that regarded Flint as a potential relocation area are now less likely to consider it. The lack of water will have a domino effect on communities: local commerce declines, incomes go down, tax revenues decrease, population declines due to lack of employment opportunities, cities and the surrounding communities shrink dangerously. The bottom line is that businesses need water: According to UNESCO, in high income nations industry accounts for up to 59% of total water use.
Another key economic implication of water scarcity is the effect on agriculture. While agriculture contributes to water scarcity, it is also highly dependent on this resource. In places such as Morocco, dwindling water supplies have meant environmental deterioration and land use loss for agricultural purposes has been estimated at approximately $350 million USD. Water scarcity impacts India, China, and the Middle East which face serious drought conditions thereby causing farms to reduce their crop production and food prices to spike dangerously. In China in 2006, drought conditions affected or threatened 182 million hectares of farmland, 8.7 million livestock, and 95 million people.
Water is vital to human existence — and a big concern for policymakers, business leaders, and economists is its heightened scarcity.
If water is neglected by societies and governments, then the odds are they will eventually collapse. Without water, businesses ranging from family farms to major corporations face multiple problems, including higher costs and long-term viability.
These higher costs will eventually be borne by consumers and make water a more expensive commodity than oil and gold combined. By 2025, it is projectedthat two-thirds of the globe’s population will face water shortages. Water scarcity is a new addition to our modern lexicon with economic implications that will alter policy-making for rich and undeveloped nations alike.
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