Market Allocation

Fresh water is currently very limited and it has made it extremely difficult to allocate it equally and fairly.

Up to 70% of fresh water is distributed for agricultural use, 22% is distributed for industrial use (including power generation, oil refining, manufacturing etc.), and only 8% is distributed for human consumption. Even if you take the uneven distribution factor out of the equation and just focus on population growth, urbanization, and industrialization, it is not difficult to see why there is a fresh water shortage.

The United States Census Bureau released figures on the 6th of December 2014 showing that there is world population of 7.2 billion people, with daily water consumption for the daily person being 250 liters, meaning that daily water consumption is at around 1.8 billion liters of water. That makes annual water consumption around 6,578 billion tons of water. The United Nations estimates that rate of water consumption, that increases at least 20% per year, is double that of population growth.

An ever increasing population means that food demand will grow, increasing the amount of fresh water allocated for agricultural use. The daily consumption of grains is estimated to be at around 1,200 tons. The current water consumption for agriculture is at least 9.5 million tons per year, with that set to increase to 13.3 million tons by 2030 and 15.1 million tons by 2050.

Oil has been the most important resource over the last century for industrial development, but with the growth of the industrial sector and urbanization, industrial use of water has become an important issue. Industry accounts for around 20% of fresh water usage but experts have predicated that will have doubled by the year 2025 to 40%.

With the research conducted, it can be concluded that water use grows and will continue to grow with the development of industries and the increase of the human population. Unfortunately, fresh water allocation for human consumption has been reduced as we continue our population growth.

Conservatively speaking, the annual water shortage is around 200 billion tons. If balancing the issue of supply and demand cannot be resolved and the amount of fresh water that is available to humans cannot be increased, water will become the cause of international political, economic, and social conflicts.