Name: Instructor: Course: Date: Macro & Micro Economics: Water Water is the most vital natural resource for living and non-living organisms on the planet. Life revolves around water because it is an essential component of life that is utilized, by both animals and plants, to sustain life…
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Water is a vital critical resource that is necessary for economic growth. This paper aims at highlighting the factors and features that affect and influence water as a resource. Various negative and positive externalities are affecting water resources in the world. Externalities are not directly involved in affecting water resources, but they are factors that exert their influence on availability of water. Positive externalities associated with water resources according to FLOW is increased literacy levels in the world through education campaigns. Education translates to a better understanding of the world and the how the things they do affect the environment. People are increasingly aware of the negative impact that most of their daily activities have on water resources. This has led to more conscious efforts in mitigating the damage caused by these activities through adaptation of more environmental friendly practices. These objectives are focused on conservation of the environment, which also influences positively on water resources because they are part of the environment. In the context of FLOW, negative externalities outweigh the positive externalities. There is increased population growth, which is being promoted by improvements in health care through the advancement in technology. This puts pressure on water resources to produce more water to support the increased population. The heightened demand for food supplies to feed the increased population puts pressure on the agricultural sector to produce more food (Bakker, n. p.). Agriculture is a water intensive practice, which means that there is increased demand for more water to support production of food through agriculture. Increased industrialization and subsequent urbanization contributes to pollution, which affects fresh water resources by contaminating it. Industrialization means that there is more industrial effluent from factories and industries, which seeps into underground fresh water reservoirs, rivers and lakes. This makes the water unfit for human consumption thus contributing to scarcity of water because these contaminated sources are no longer viable sources of water. The increase in awareness of the role that human activities have on water resources creates more pressure on governments to formulate policies on sustainable water use. Privatization of water resources is aimed at involving the private sector in the provision of water services to the public. It is based on the premise that when a private company manages water resources, it will ensure efficiency and sustainability than when it is managed by local authorities. This is because a private company’s main objective is to make a profit, at the end of the day, so they manage water resources sustainably in order to guarantee a steady income from their venture. Unlike government institutions that are prone to bureaucracies and political interference, which are likely to negatively impact on the provision of water services. Privatization of water service provision exists, in different models, and the most common are public-private partnerships or strictly private ownership of service provision. Privatization functions to provide better water services to the public and it is best placed to advance conservation efforts. The advantages of privatization of water resources include accountability in management of water resources, which is achieved through
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