GEF

Unit 4  |  The Global Water Crisis 110 begun charging higher water rates would seem to support the economists’ position. A growing number of cities in the U.S. and around the world are implementing block pricing of water, in which water pricing increases sharply with higher rates of water use. This pricing structure encourages cutting back on non-essential water use such as landscaping, with- out restricting essential water uses such as drinking, bathing, and cooking. Another economics-based solution to the global water crisis is called virtual water trade . Many regions of the world, such as the Middle East, do not have sufficient water resources to supply their own internal needs. As agriculture is the sector that demands the highest use of water, many countries are increasingly relying on importing food as a way of reducing demand on internal water sources. In essence, this trade rec- ognizes that it is extremely expensive to move liquid water from wetter to drier regions. Instead, water-poor countries can more cheaply import water-intensive agricultural goods that are grown outside their borders. From an economics perspective the trade in virtual water is efficient, as the countries that are best-positioned to use water for growing crops do so, freeing water-poor countries to use their own water to meet higher- value needs. In many ways however, it is clear that the global water cri- sis will not be solved solely with trade or economic tools. Unsustainable water use needs to be curtailed, and water infrastructure must be improved to benefit the world’s poor- est citizens. Instead of an economic commodity, most people regard water as a basic human right, as it is essential to life. In some regions, however, water, or the rights to use water, is being treated as an economic good that can be bought and sold. This stance contrasts sharply with the historical precedent of water as a public good that is managed by governments for the benefit of all users. BLOCK PRICING A pricing structure in which users pay higher rates with higher levels of use. VIRTUAL WATER TRADE The hidden flow of water when food or other com- modities are traded from one place to another.