AREC365 Lecture Notes - Lecture 27: Water Scarcity, Demand Curve, Externality

• School: University of Alberta
• Department: Agricultural and Resource Economics
• Course: AREC365
• Professor: Terence Veeman

Document Summary

The big rivers in ab are in the north. Most of the people and the economic activity is in the south. Dominant consumptive use in ab is irrigated agriculture. 2/3 of consumptive use in ab is used in the ag sector. Water in northern ab, people in the south. Inadequate water rights trading these areas of weakness lead to areas of conservation. These are due to a water economist named alan randall. Resource cost - what is costs to supply (deliver and distribute) water. Opportunity cost - the value of water in its best alternative use (market or non-market) Social cost - the higher of 1 or 2, plus any unpriced external e ects (mec&muc) Muc - externality for grandchildren if you deplete ground water too quickly. 3/4 of the maintenance and rehabilitation costs are subsidized. Yes, we base pricing in irrigated agriculture on resource costs, but only to a limited degree.