Chapter 1 Article

Article: 'Water Stress' brings great returns for investors

"When water flows from your kitchen tap, what do you see? It should be dollar signs."

In this article, water is described as one of the biggest money makers in Canada...maybe even more so than oil. In most countries, Canada included, there is a shortage of water despite the fact that it takes up two-thirds of the planet. Because of this, the price of ‘drinkable’ water is slowly increasing. Apparently, the problem lies in the lack of sufficient drinkable water along with skyrocketing population growth around the world, as shown by a recent UBS Investment Research report by analyst Shirley Knott. This problem is not only effecting developing countries, but it is a on going concern in developed countries as well. If this trend continues, and it most likely will, the scarcity and necessity for water may drive its price up into the clouds like it did to oil.

Relation to Chapter 1

In the textbook, it was stated that everything is scarce, no matter how large of a quantity exists. This article is a perfect example of why that statement is true. It shows that even when you have something as plentiful as water, there are still situations in where there could be a shortage. In fact, there is a section in the textbook where the problem of water shortage is addressed: “On average, each Canadian uses 7100 litres of water a day-taking into account household, industrial and agricultural use.” Even though we have 14 percent of the world’s lakes and 9 percent of the world’s river flow in Canada, it doesn’t make up for the fact that we are the world’s second highest water users. I think the concept of scarcity is the idea that there is a limited amount to everything, which will hopefully remind econimists of using resources in a sustainable way.