Behind the Book | Grappling with the Water Paradox

In 2015, I was approached by an Editor of Yale University Press UK with a request: Would I consider writing a book on the economics of water? Four years later, it was published as "The Water Paradox". Writing this book proved to be a major challenge, yet ultimately, worthwhile.
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In 2019, The Water Paradox: Overcoming the Global Crisis in Water Management
was finally published. It had been quite an effort to write.

Initially I was very reluctant to take on this project.  There seemed to be many books on water already.  Besides, I never really considered myself an expert on the topic. I could think of several other economists who were more qualified than me. 

In addition, I should have known better. I had done enough studies of water to realize that it is an incredibly complex issue, and there are many contrasting and competing views on the way forward.  Although I have never been afraid of taking on difficult environmental problems, the disconnect and discord over the impending global water crisis seemed especially pervasive. 

In the end, I decided there was a compelling reason to proceed.  The more I researched into existing books on water, the more I realized that something important was missing.  There are excellent studies detailing the growing problems of water scarcity worldwide, and a few that offer innovative engineering solutions. But nobody was focusing on the crux of the problem, which is the widespread mismanagement of water.

The title reflects this key theme of the book. If water is valuable and scarce, why is it so poorly managed? To, me this is the great paradox of water. Explaining this paradox – and offering possible solutions to resolve it  – was my principal purpose for writing this book.  The main message is straightforward. The global water crisis is predominantly a crisis of inadequate and poor water management.

Yet this crisis could be avoided.  Inadequate policies, governance and institutions, coupled with incorrect market signals and insufficient innovations to improve efficiency, underlie most chronic water problems. This process has become a vicious cycle.  Markets and policy decisions currently do not reflect the rising economic costs associated with exploiting more freshwater resources.  This in turn leads to freshwater infrastructure and investments that are accompanied by higher environmental and social damages.  These damages are reflected in increased depletion of water resources, pollution, degradation of freshwater ecosystems, and ultimately, rising water scarcity.  But because the economic costs of this scarcity continue to be ignored in decision making, the consequences for current and future well-being are under-estimated.  The end result is what I call the chronic under-pricing of water, which poor institutions and inadequate governance structures perpetuate.

Unraveling this vicious circle and turning it into a virtuous one is one of the biggest challenges facing humankind. It starts with designing water governance regimes and institutions that are suitable for managing the rapidly changing conditions of water availability and competing demands, including the threat posed by climate change.  Ending the under-pricing of water also requires reforms to markets and policies to ensure that they adequately capture the rising economic costs of exploiting water resources.  These costs include not only the full cost recovery of water infrastructure supply but also environmental damages from degrading ecosystems and any social impacts of inequitable distribution.  Incorporating these costs will ensure that all water developments will minimize environmental and social impacts, which in turn will lead to more water conservation, control of pollution and ecosystem protection.  The result will be efficient allocation of water among its competing uses, fostering of water-saving innovations, and further mitigation of water scarcity and its costs.

Not everyone who reads the book will agree with me.  Some will suggest that the solutions I am offering are too politically and socially difficult to adopt.  But overall, the main message of my book seems to be well-received, as exemplified by an early review in NatureI have also been pleased by responses at my public lectures and invited talks. One of favorite took place at the Aquarium of the Pacific in Long Beach, California. 

Finally, as I have written in my blog post for World Water Day 2020, when the current coronavirus pandemic ends, we must re-focus our attention on the global water management crisis as the next collective test facing humankind.  Hopefully, my book will provide some hope that this is a crisis we can overcome through sound policies, institutions and incentives. 

In the end, it was worthwhile grappling with the water paradox.

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Go to the profile of Daniel Olago
about 4 years ago

An important issue, and extremely so with respect to groundwater.