Water Resources, a Commodity

Last updated: March 8, 2019

Should water be treated as a commodity that can be priced as an economic resource and traded across international boundaries? Or is it a unique common good that should be the subject of international cooperation?

Water Resources, a Commodity
Yes because...

Water occurs randomly, just like oil and gas, which are treated as commodities which can be bought, ...

Water occurs randomly, just like oil and gas, which are treated as commodities which can be bought, sold and traded across national borders. If countries can take advantage of their geographic location to sell fossil fuels, they are justified in using water resources to support their economies. Failure to view water as a precious, marketable commodity makes it far less valued and leads to unrestricted water use by environmentally unconscious societies.
No because...
Water is the most vital of Earth’s randomly occurring resources; it is essential for survival. Consequently, water-rich countries have no moral right to profit from this resource. Every inhabitant of the planet has an equal right to water, and flowing water has no political boundaries.

Water Resources, a Commodity
Yes because...

Control and management of water – the maintenance of dams, reservoirs, flood defences and irrigation...

Control and management of water – the maintenance of dams, reservoirs, flood defences and irrigation systems – costs billions of dollars and is a burden on upstream states’ budgets. All of these expenses, including the opportunity costs of fertile lands allocated for reservoirs and dams, should be covered by downstream states, which are usually the primary consumers of water. For example, it is unfair if an upstream state cannot use the water flowing through it to produce electricity to offset the costs of water management.
No because...
It is immoral to charge for water beyond the cost of water systems’ maintenance. Water is a commodity only up to a certain point. Once water exceeds a reservoir’s capacity, it is not a commodity because it will flow free over the dam. However, by interrupting the natural flow of water, dams may harm downstream states by stopping seasonal variations in flow on which both agriculture and eco-systems have come to depend. Dams may also create dangerous conditions because downstream states may be flooded if a dam breaks. Excessive withdrawal of water for irrigation by upstream states is even worse, as it can greatly reduce the flow to downstream states.

Water Resources, a Commodity
Yes because...

Water resources are distributed unequally. Uneven distribution and wasteful consumption warrant the...

Water resources are distributed unequally. Uneven distribution and wasteful consumption warrant the introduction of the “pay-for-water” approach. Is it fair to prefer to use water to irrigate infertile semi-deserts downstream, rather than using water more efficiently upstream?
No because...
Faced with scarcity and drought, states may resort to force to gain control of water resources. Therefore, making water a commodity is a potential cause of many conflicts and should be avoided. By recognising the right of everyone to water resources, states can be brought into negotiations as to the best ways to cooperate over their distribution and management.

Water Resources, a Commodity
Yes because...

Treating water as a commodity that can be traded will be good for downstream states as it creates an...

Treating water as a commodity that can be traded will be good for downstream states as it creates an incentive for upstream states to take account of their interests. By paying an appropriate rate for their water supplies, they can ensure regular flows and influence policy. For example, in order to profit from water as a commodity, upstream states may forego dam building, improve the efficiency of agricultural irrigation practices, and maintain large forest areas that are crucial to a healthy water cycle. Such leverage can only be achieved through treating water as a commodity; international agreements are too easily broken by new governments.
No because...
There are great dangers in making water supply dependent entirely upon economic exchange. If the states downstream are too poor to pay for a good supply of water, they will not only suffer in terms of drinking water and their agriculture, transport and fishing industries, they will also have their economic backwardness reinforced as a consequence. And if the countries downstream are richer than those upstream, they will be able to purchase so much water that the poor in the upstream states will themselves suffer, especially if their governments are unresponsive to their needs or corrupt. Instead access to water must be treated as a basic human right, with international cooperation to ensure that it is fairly distributed.

Water Resources, a Commodity
Yes because...

Many experts believe that climate change, deforestation and population growth will all put even grea...

Many experts believe that climate change, deforestation and population growth will all put even greater pressure on freshwater resources in the next century. As a result international tensions over water use are likely to escalate into conflict – water wars. Free market approaches provide the best means of avoiding such conflicts, as countries that trade with each other are less likely to go to war. And creating a commodity price for water also means that demand can be substantially reduced, so that there is more to go around and pressures are relieved.
No because...
Despite scaremongering about “water wars”, international conflicts over access to shared water resources have been avoided. In fact there have been nearly 300 international water agreements since 1948, showing that a cooperative approach which treats water as an essential common good is highly successful. Indeed, the regular technical interaction required to negotiate quotas, share data, and set up common institutions as part of international water agreements can all help to promote better political relationships between neighbouring states that may have histories of hostility.


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