ABSTRACT
This chapter follows these principles to provide an overview of the main issues in the specialised subdiscipline that has become known as the eco - nomics of water. Firstly, we recognise value by discussing the role of water within an economic system, in terms of both consumer and producer demands. Coupled with demand must come a supply to meet this demand. How natural systems supply water, and how these systems can be threatened by human activity, is then discussed. The intersection of demand and supply inevitably raises the question of the pricing of water. Given the role of water in an economic system, we then ask the question – what is the value of water? Different philosophical conceptions exist around the notion of value. Environmental economists speak of the ‘total economic value’ of an environmental good, which deconstructs into a series of sub-classifications that combine to form this total value. The Millennium Eco - system Assessment (2005) offered an alternative approach, classifying environmental goods into what has become known as ‘ecosystem goods and services’, with a focus on the flow of benefits from ecosystems, via these goods and services, to human well-being. In the language of water resources, we then focus upon a case study of wetlands and the ecosystem goods and services
Figure 10.1 The three-tiered approach to economic value.
