ABOUT THE AUTHORS
Steven Renzetti is an environmental economist at Brock University with particular interest in water resources.Diane Dupont is also a Professor of Economics at Brock University, specializing in the values of goods and services that are not bought and sold in a market, for example, the value of ecosystem services.Both are active authors, presenters and commentators on water economics.Chris Wood is a full time journalist and author of the book Dry Spring: The Coming Water Crisis of North America.
It seems obvious that any important decision should take into account the costs and benefits of the different options that are available. But what about decisions we make about water?When water is allocated to a municipality, a manufacturing facility or a generating station, how do we know that the use of the water will provide an overall social and economic benefit? Would the water provide more benefit if allocated to some other use, or left where it is?
It turns out we don’t actually have the information we need to know how much water contributes to the economic value of different activities.It’s not a new question.When the federal government undertook an inquiry about water in 1985, economist Andrew Muller attempted to find out. He came up with an estimate of between $7.5 and $23 billion (equivalent to $15 to $44 billion in 2011 dollars).Muller noted that his “estimates are subject to important limitations in concept and coverage” but he hoped that the data put forward in his analysis would “serve as improved indicators of the importance of water and contribute to more informed public discussion.”
Running Through Our Fingers is an attempt by two of Canada’s best environmental economists and an award-winning journalist to revisit Muller’s analysis and articulate the value of water’s contribution to the Canadian economy.Their conclusion?What they can quantify would suggest that water is responsible for a contribution of between $7.8 and $22.9 billion.The numbers are remarkably similar to Muller’s, but about half the value when compared in 2011 dollars.
Has the value of water to our economy decreased?It’s very unlikely. What’s clear is that the amount of information available to make such an estimate has changed very little.To quote the authors of this paper it’s “disturbingly incomplete.”
We simply don’t have the information we need to understand how important water is, or which activities provide the most economic benefit per volume of water used.We also can’t accurately account for what water is “worth” in its natural state.The authors speculate that the “unmeasured” contribution of the ecosystem services provided by water may account for a higher economic value than ever before.Indeed they predict that the value of these services may “exceed by at least an order of magnitude what water is worth in its better-measured uses.”
The Blue Economy Initiative aims to shed light on the connection between water and our economy.We believe that becoming a world leader in water stewardship will help Canada secure competitive advantage and support a prosperous future.
This paper is the first of a series of research papers that Blue Economy Initiative will be releasing. Over the coming months, we’ll be working to advance that ‘informed public discussion’ about water and the economy that Muller sought 25 years ago.