What are two benefits of valuing water at a higher price?

“We cannot live without water, but because it is so much part of our everyday existence it has become invisible to us. We need to understand and acknowledge its importance to modern lifestyles and to start to value the role it plays in all our lives.

Natural capital

But how do we value a resource that is ‘invisible’? The fact that it is so makes it even more difficult. Perhaps the answer lies in economics — specifically green economics. In recent years there has been a trend towards recognising nature as having an economic value, (natural capital) in order to protect and preserve it not just for today but for future generations. Natural capital is the stock of physical natural assets — it is simply everything that nature gives us for free, such as water, soils, forests and biodiversity, and which provides a benefit such as pollinating crops, natural hazard protection or by facilitating climate regulation.

Across the globe water is fast becoming a scarce resource, yet at the same time water is vital to all industries and is central to sustainable economic activity and growth. It provides raw materials for the production of goods and services. Moreover, energy production, manufacturing as well as food production relies heavily on access to water. In 1992 the United Nations stated that ‘water has an economic value in all its competing uses and should be recognised as an economic good’…”