ABSTRACT
The chapter recognises the value of water by discussing its role within an economic system, in terms of both consumer and producer demands. Coupled with demand must come a supply to meet this demand and supplies can be threatened by human activity. The intersection of demand and supply inevitably raises water pricing issues and the chapter covers benefits, costs, economic efficiency and tariffs. However, the price of water does not necessarily reflect its value. This chapter discusses the concept of the total economic value of water, which deconstructs into a series of sub-classifications that combine to form this total value. However, the Millennium Ecosystem Assessment offered an alternative approach, classifying ecosystem goods and services, with a focus on the flow of benefits from ecosystems, via these goods and services, to human well-being. Whichever of these value concepts is adopted, there exists a range of economic valuation techniques that can be applied to monetarise water resources. Non-monetary techniques are also becoming increasingly popular in an effort to complement the range of available economic techniques. Once values are established, the effort then turns to how these values can be embedded into the decision-making processes and the chapter provides some relevant examples.
