WATER ECONOMICS IN A CHANGING CLIMATE- CAN INTERNATIONAL TRADE HELP ALLEVIATE WATER SCARCITY? As the state of California takes increasingly stringent measures in the face of a multi-year drought, there is mounting concern that water shortages will hamstring the state’s economy. While we are in no danger of running out of water on a global level, regions from California to Pakistan to northeast Australia are being stretched to the limit by rising water demand and changing weather patterns. Water resources are distributed quite unevenly around the world, but global export markets can help alleviate water imbalances by allowing countries and regions rich with fresh water to focus on the production of water-intensive goods. A recent article appearing in the American Economic Journal: Applied Economics uses an economic model of international trade to better understand the role of water in the global economy. In The Global Economics of Water: Is Water a Source of Comparative Advantage? Author Peter Debaere asks whether water resources have any bearing on a country’s exports. In the 1990s, hydrologists began to consider the fact that while water is not actually shipped internationally in bulk, it is effectively traded in the form of finished goods that require water to produce. When a carton of shirts crosses the Pacific in the hold of a cargo ship, the thousands of gallons of water that were required to make them do not need to come along. Still, that water can be thought of as part of a worldwide “virtual water” trade. In this way, water-scarce countries can enjoy the bounty of water-produced goods, and conserve their smaller water resources. This is the basic trade theory of comparative advantage at work.

But if global trade is highly dependent on water availability, then changing precipitation patterns have the potential to significantly disrupt the economies of several countries. To measure the impact of water resources on the industrial mix in each country, the author develops a measure of “water intensity” intended to capture the ratio of water costs to total value added in each industry. Data collected in the United States show that water intensity varies significantly by industry: sugarcane farming and stone quarrying rank near the top, while the manufacture of medical equipment uses almost no water as a percentage of value. If global markets are using water as a source of comparative advantage, then each country’s exports will reflect local water availability. Water-rich countries like Russia and Brazil will be more likely to concentrate in water-intensive sectors like agriculture and mining, while water-poor economies in Africa, Europe, and western Asia will tend to import these goods and focus their exports in other industries. Debaere feeds this data into a model of national exports, which seeks to explain the export mix in each country based on the amount of water, capital, land, and skilled labor available. As expected, countries with greater water resources export more water-intensive goods, but the relationship is much weaker than that for capital or skilled labor. A standard-deviation increase in water resources per capita is associated with only a 0.05 standard-deviation increase in exports. The evidence suggests that water-scarce countries, at least to some extent, protect their scarce water resources by exporting less water-intensive goods that would tax their scarce resources even more. (Debaere 2014). These results should reassure us that changing water availability, while potentially disruptive in some countries, will not throw global trade into disarray. This is explained in part by the fact that water is generally so cheap that it only makes up 1-3% of a producer’s added value in most industries outside of agriculture; even a doubling or tripling of water prices does not significantly alter a producer’s profitability.

However, Debaere cautions that the relationship between water and trade may strengthen in the future. At present, water prices in water-poor countries are kept artificially low, either because water is freely available in rivers and lakes, or because governments explicitly or implicitly subsidize water for consumers and businesses. If water scarcity deepens, governments may start to reconsider these policies and trade may become more sensitive to local freshwater resources. 2 Even these lower estimates show the potential for climate change to alter trading patterns. Debaere notes that the Australian government recently predicted a 10% nationwide decrease in precipitation by 2030. The model predicts that if Australia’s water resources shrink by 10%, its export trade would drop by about 5% or $15 billion, creating a small but meaningful dent in the Australian economy, especially its agricultural and resource extraction sectors. As governments consider changes to water policy in coming years, they will be considering the potential for these kinds of disruptive effects. Source: “The Global Economics of Water: Is Water a Source of Comparative Advantage?” appears in the April 2014 issue of the American Economic Journal: Applied Economics. By Tim Hyde 1.1 Climate change is thought to bring about serious changes to the availability of water in various parts of the world. The above case study highlights the importance of understanding comparative advantage in the production of water intensive output for international markets. Discuss the concept of comparative advantage within the context of the virtual water hypothesis introduced in the case study. (10) 1.2 Some people may argue that countries do not always place much emphasis on comparative when designing their export mix. To what extent do you agree or disagree with this view?

Get Professional Assignment Help Cheaply

Buy Custom Essay

Are you busy and do not have time to handle your assignment? Are you scared that your paper will not make the grade? Do you have responsibilities that may hinder you from turning in your assignment on time? Are you tired and can barely handle your assignment? Are your grades inconsistent?

Whichever your reason is, it is valid! You can get professional academic help from our service at affordable rates. We have a team of professional academic writers who can handle all your assignments.

Why Choose Our Academic Writing Service?

  • Plagiarism free papers
  • Timely delivery
  • Any deadline
  • Skilled, Experienced Native English Writers
  • Subject-relevant academic writer
  • Adherence to paper instructions
  • Ability to tackle bulk assignments
  • Reasonable prices
  • 24/7 Customer Support
  • Get superb grades consistently

Online Academic Help With Different Subjects


Students barely have time to read. We got you! Have your literature essay or book review written without having the hassle of reading the book. You can get your literature paper custom-written for you by our literature specialists.


Do you struggle with finance? No need to torture yourself if finance is not your cup of tea. You can order your finance paper from our academic writing service and get 100% original work from competent finance experts.

Computer science

Computer science is a tough subject. Fortunately, our computer science experts are up to the match. No need to stress and have sleepless nights. Our academic writers will tackle all your computer science assignments and deliver them on time. Let us handle all your python, java, ruby, JavaScript, php , C+ assignments!


While psychology may be an interesting subject, you may lack sufficient time to handle your assignments. Don’t despair; by using our academic writing service, you can be assured of perfect grades. Moreover, your grades will be consistent.


Engineering is quite a demanding subject. Students face a lot of pressure and barely have enough time to do what they love to do. Our academic writing service got you covered! Our engineering specialists follow the paper instructions and ensure timely delivery of the paper.


In the nursing course, you may have difficulties with literature reviews, annotated bibliographies, critical essays, and other assignments. Our nursing assignment writers will offer you professional nursing paper help at low prices.


Truth be told, sociology papers can be quite exhausting. Our academic writing service relieves you of fatigue, pressure, and stress. You can relax and have peace of mind as our academic writers handle your sociology assignment.


We take pride in having some of the best business writers in the industry. Our business writers have a lot of experience in the field. They are reliable, and you can be assured of a high-grade paper. They are able to handle business papers of any subject, length, deadline, and difficulty!


We boast of having some of the most experienced statistics experts in the industry. Our statistics experts have diverse skills, expertise, and knowledge to handle any kind of assignment. They have access to all kinds of software to get your assignment done.


Writing a law essay may prove to be an insurmountable obstacle, especially when you need to know the peculiarities of the legislative framework. Take advantage of our top-notch law specialists and get superb grades and 100% satisfaction.

What discipline/subjects do you deal in?

We have highlighted some of the most popular subjects we handle above. Those are just a tip of the iceberg. We deal in all academic disciplines since our writers are as diverse. They have been drawn from across all disciplines, and orders are assigned to those writers believed to be the best in the field. In a nutshell, there is no task we cannot handle; all you need to do is place your order with us. As long as your instructions are clear, just trust we shall deliver irrespective of the discipline.

Are your writers competent enough to handle my paper?

Our essay writers are graduates with bachelor's, masters, Ph.D., and doctorate degrees in various subjects. The minimum requirement to be an essay writer with our essay writing service is to have a college degree. All our academic writers have a minimum of two years of academic writing. We have a stringent recruitment process to ensure that we get only the most competent essay writers in the industry. We also ensure that the writers are handsomely compensated for their value. The majority of our writers are native English speakers. As such, the fluency of language and grammar is impeccable.

What if I don’t like the paper?

There is a very low likelihood that you won’t like the paper.

Reasons being:

  • When assigning your order, we match the paper’s discipline with the writer’s field/specialization. Since all our writers are graduates, we match the paper’s subject with the field the writer studied. For instance, if it’s a nursing paper, only a nursing graduate and writer will handle it. Furthermore, all our writers have academic writing experience and top-notch research skills.
  • We have a quality assurance that reviews the paper before it gets to you. As such, we ensure that you get a paper that meets the required standard and will most definitely make the grade.

In the event that you don’t like your paper:

  • The writer will revise the paper up to your pleasing. You have unlimited revisions. You simply need to highlight what specifically you don’t like about the paper, and the writer will make the amendments. The paper will be revised until you are satisfied. Revisions are free of charge
  • We will have a different writer write the paper from scratch.
  • Last resort, if the above does not work, we will refund your money.

Will the professor find out I didn’t write the paper myself?

Not at all. All papers are written from scratch. There is no way your tutor or instructor will realize that you did not write the paper yourself. In fact, we recommend using our assignment help services for consistent results.

What if the paper is plagiarized?

We check all papers for plagiarism before we submit them. We use powerful plagiarism checking software such as SafeAssign, LopesWrite, and Turnitin. We also upload the plagiarism report so that you can review it. We understand that plagiarism is academic suicide. We would not take the risk of submitting plagiarized work and jeopardize your academic journey. Furthermore, we do not sell or use prewritten papers, and each paper is written from scratch.

When will I get my paper?

You determine when you get the paper by setting the deadline when placing the order. All papers are delivered within the deadline. We are well aware that we operate in a time-sensitive industry. As such, we have laid out strategies to ensure that the client receives the paper on time and they never miss the deadline. We understand that papers that are submitted late have some points deducted. We do not want you to miss any points due to late submission. We work on beating deadlines by huge margins in order to ensure that you have ample time to review the paper before you submit it.

Will anyone find out that I used your services?

We have a privacy and confidentiality policy that guides our work. We NEVER share any customer information with third parties. Noone will ever know that you used our assignment help services. It’s only between you and us. We are bound by our policies to protect the customer’s identity and information. All your information, such as your names, phone number, email, order information, and so on, are protected. We have robust security systems that ensure that your data is protected. Hacking our systems is close to impossible, and it has never happened.

How our Assignment  Help Service Works

1.      Place an order

You fill all the paper instructions in the order form. Make sure you include all the helpful materials so that our academic writers can deliver the perfect paper. It will also help to eliminate unnecessary revisions.

2.      Pay for the order

Proceed to pay for the paper so that it can be assigned to one of our expert academic writers. The paper subject is matched with the writer’s area of specialization.

3.      Track the progress

You communicate with the writer and know about the progress of the paper. The client can ask the writer for drafts of the paper. The client can upload extra material and include additional instructions from the lecturer. Receive a paper.

4.      Download the paper

The paper is sent to your email and uploaded to your personal account. You also get a plagiarism report attached to your paper.

smile and order essaysmile and order essay PLACE THIS ORDER OR A SIMILAR ORDER WITH US TODAY AND GET A PERFECT SCORE!!!

order custom essay paper