GEF

Unit 4  |  The Global Water Crisis 109 good because it cannot be owned like a car or another tan- gible item. Economists explain that this situation gives rise to a tragedy of the commons in which water users have an eco- nomic incentive to maximize their personal use at the expense of the resource as a whole. They also point out that water subsidies , usually to agricul- tural operations that use a lot of water, are extremely wasteful. In economic terms, water provides much higher benefits for domestic and industrial uses than most agricultural uses. Therefore, economists argue that the artificially low prices that agricultural users pay for water in most countries allocate too much water to agriculture and not enough for other uses. Agriculture accounts for as much as 90% of total water withdrawals in some countries. In a similar vein, economists make the case that water is wasted because it is priced too low for industrial and domes- tic uses. The experience of several municipalities that have TRAGEDY OF THE COMMONS A concept developed by ecologist Garrett Hardin in which a common resource becomes degraded through the rational actions of indi- vidual users. SUBSIDY Money granted by the gov- ernment to assist an industry or business so that the price of a commodity or service may remain low or competitive.