Economics

Abstract

The economics of water concerns the measurement and effective management of the trade-offs across its many competing uses (and non-uses) over time and in different locations. Measurement requires estimation of the costs, benefits and risks associated with alternative uses of water. For example, these alternatives could be: (i) keeping water in the river to support ecosystem services, (ii) extracting it for a town�s water supply, or (iii) using water to irrigate a rice crop. Effective management ensures that society�s objectives for water use (for example, environmental sustainability, sanitation and waste disposal, or food production) are achieved by supporting methods to allocate water that favours higher value uses (including non-uses) and ensures that basic water needs are met.