Handbook of Water Economics
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Handbook of Water Economics

Edited by Ariel Dinar and Kurt Schwabe

Water scarcity, whether in the quality or quantity dimension, afflicts most countries. Decisions on water management and allocation over time, space, and among uses and users involve economic considerations. This Handbook assembles research that represents recent thinking and applications in water economics. The book chapters are written by leading scholars in the field who address issues related to its use, management, and value. The topics cover analytical methods, sectoral and intersectoral water issues, and issues associated with different sources of water.
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Chapter 25: Water and growth in developing countries

Edward B. Barbier


Increasing evidence suggests that, because freshwater ecosystems globally are undergoing such rapid and substantial change, there is a growing problem of water security, especially in developing economies (Hoekstra et al., 2012; Johnson et al., 2001; OECD, 2012; Revenga et al., 2005; UNDP, 2006; Vörösmarty et al., 2012; WWAP, 2012). Although water problems have persisted for decades, the intensity of recent impacts is exacerbating chronic difficulties. Modifications of rivers and other inland waters may have increased the amount of water available for human use, but more than 40 percent of the world’s population experience water stress, measured in terms of annual water withdrawals to water availability, with this percentage expected to increase to almost 50 percent by 2025 (Revenga et al., 2005). Over 1.4 billion people currently live in river basins where the use of water exceeds minimum recharge levels, and most of these critical basins are in the developing world (UNDP, 2006). From 1996 to 2005, 201 basins with 2.67 billion inhabitants experienced severe water scarcity during at least one month of the year (Hoekstra et al., 2012). The pollution and degradation of surface and underground sources of water by agricultural, industrial and urban waste are further aggravating the global water scarcity problem (Johnson et al., 2001; OECD, 2012; Vörösmarty et al., 2012).

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