next up previous contents
Next: Loss of Farm Production Up: Second-Order Impacts Previous: Second-Order Impacts   Contents

Increasing Water Price

The commodity of water is subject to the economic law of supply and demand. As water becomes more scarce, its price will increase. Already, some farmers have found it to be more profitable to sell their water rights than to farm their land (Vaux Jr, 1990). Population growth accelerates water scarcity by increasing demand, as has been seen in Arizona, one of the most rapidly growing and water-critical states (Gelt et al., 1998). The director of Water Programs at the U.S. Environment and Energy Study Institute summarized the problem of scarcity and uncertainty thusly:

Now we come to the $64,000 question, or should I say the $64 billion or $164 billion question? No one really knows how much water will cost. But if we continue our past practices, it will undoubtedly run into the hundreds of billions. (Goldberg, 1994).

Andy Wingo 2001-12-10