Report on the Australian Water Crisis: Demand, Supply, and Solutions

This report provides an in-depth analysis of the Australian water crisis, focusing on the imbalance between water demand and supply. It explores the contributing factors, including climatic changes, population growth, and economic affluence, which have exacerbated the scarcity of fresh water. The report examines the current state of water resources, the government's response through policies like desalination and water recycling, and the potential future implications if the crisis worsens. It also highlights the importance of consumer awareness and water conservation. The report recommends strategies such as price discrimination and increased investment in infrastructure to improve water conservation and storage. The conclusion emphasizes the need for efficient water allocation and proactive government policies to mitigate the crisis and ensure sustainable water management in Australia.

Running Head: Australian Water Crisis
Australian Water Demand and Supply
By (Name)
(Tutor)
(University)
(Date)

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Australian Water Demand and Supply
Introduction
Australian is an economy that is being faced by the scarcity of water. The amount of
rainfall received in some parts of this economy is too low such that some areas have turned to
semi-deserts. It is not clear as to what is the real factor causing water crisis all over the world;
many nations are struggling with the challenge of low supply of water. It’s globally agreeable
that water is the basic source of life and thus an important resource that should be maintained at
higher supply level for an economy to thrive well. Shortage of water have significant
implications on the economy’s performance since all sectors are dependent on water for
production (Tranter, 2015). Agriculture is the primary sector that has really felt the squeeze of
this water scarcity.
Most of the rivers have low water levels; due to drying of some areas, the water level
has gone down. This has resulted in the restriction on irrigation water which in turn has greatly
undermined the productivity of the agricultural sector (Ejaz, Hanjra and Ward, 2015). This paper
shall discuss the various climatic changes that are responsible for the Australian water crisis and
also some other contributing factors. The Australian water consumers’ awareness will be raised
on the present water condition and will understand why the government is employing various
policies. They will also develop a personal sense of water conservation. By considering the
various factors behind the current situation, recommendations drawn may be crucial to the
government in decision making towards controlling the situation. This paper shall help in
understanding that water is a scarce resource in Australia and thus its supply is limited compared
to its rising demand.
Analysis
Whigham (2017) wrote an article known as “The approaching crisis: Is the world running
out of water?” this article was meant to create an awareness of the current Australian water
crisis. It tells about some of the factors responsible for causing such a crisis and the various
policies that the government has enacted so as to satisfy the rising demand with the scarce water
resource. In his notion of how the Australian supply of water was endless and that taps never
went dry, Whigham is trying to let us know that Australia was an economy of plentiful supply of
water. The question now is “where did this shortage come from?” the article emphasizes on the
need to abate the current water consumption pattern; it pointed out that without this, a large

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proportion of the world’s population (2/3 to be specific) will be facing a water shortage by 2025.
The supply of water is falling but the demand is going up (OECD and OCDE, 2013). The market
forces on their own has failed in bringing about desirable results in the water market. Most urban
cities in the world are becoming increasingly thirsty and a global water crisis is predicted to
emerge in future.
Fig: Australian Water supply and demand
Source: Onselen (2017)
From the graph, water deficit can be said to have been a serious issue only from 2005.
Whereas the world is covered by water, there is insufficiency of fresh water in most economies
(Hubbard, Garnett and Lewis, 2016). Our interest is only on 2.5% of this water. If this 2.5% was
available, the water shortage would come to an end. The 2.5 % is available, but glaciers and
snowfields traps approximately more than 1.5% of this and leaves less than a percent to serve the
billions of world’s population. The major factors responsible for the shortage are; growing
population (Sbs.com.au, 2016), increased affluence of economies (where more water is used in
production of goods) and the climatic changes. Su (2014) noted that greenhouse gas emissions
are responsible for climatic changes. According to Opray (2016) the shortage in Australia is
being tackled through using desalination and water recycling.

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View and Recommendation
The analysis of the current situation and the future implications if the situation
worsens clearly tells the government that it has some work to do. This water crisis is being
experienced all over the world; since there are some economies that have had water crisis before
and have regained control of the situation, the Australian policy makers should analyze the
policies implement that help on the same and weigh if they would be effective in bringing such
control to Australia.
In economics, resources are always scarce, thus, the most appropriate control is to
lower the water demand level. This is only achievable by raising the price at which water is
supplied. Most consumers will opt to spend less volumes of water at higher price in comparison
to the initial low price. However, the government should bear in mind of the fact that water is the
basis of life for both the poor and the rich. Thus, price increment may raise the level of poverty
in Australia. The recommendation to the government is that if this strategy was to be effective, it
should try to use price discrimination so as to have a positive change in demand as is the
objective without bringing about some economic implications. The price should be raised on the
sectors that use large volumes of water to relieve some supply to other sectors. The government
should use the current predictions of the future water crisis and raise its spending on
infrastructure that would increase water conservation and storage.
Conclusion
Water in Australia is a scarce resource and thus the government has a sole obligation
of ensuring that there is efficient allocation of the same. Without the government enacting
various policies, the Australian water supply is at a risk of experiencing extreme shortages in the
future which would turn this to a natural disaster that may not be easily brought to an end. The
Australian climatic condition is deteriorating and given the current increased carbon emissions,
the water supply is not expected to recover very soon; it may take time and thus a need to
allocate efficiently what is available so that it may serve the consumers for a long time as we
wait for the situation to be put under control.

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References
Ejaz, Q., Hanjra, A. and Ward, J. (2015). Impact of water scarcity in Australia on global food
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http://inform.regionalaustralia.org.au/industry/agriculture-forestry-and-fisheries/item/impact-of-
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Aug. 2017].
Hubbard, G., Garnett, A. and Lewis, P., (2016). Essentials of Economics. AU, Pearson Higher
Education.
OECD and OCDE. (2013). Water security for better lives. Paris, OECD.
Onselen, L. (2017). Australia's phantom housing shortage. [Online] Macrobusiness.com.au.
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Sbs.com.au. (2016). Perth faces water shortage: report. [Online] Sbs.com.au. Available at:
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Su, R. (2014). Australia to Face 'Water Crisis' Due to Rainfall Shortage and Climate Change.
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Whigham, N. (2017). The approaching crisis: Is the world running out of water? News.com.au.
Available at: http://www.news.com.au/technology/environment/conservation/the-approaching-
crisis-is-the-world-running-out-of-water/news-story/8d48f0cce7b33bc7b480d8e6f1e9152b
[Online] [Accessed 22 Aug. 2017].