Balancing: the economic approach to sustainable water management

The economic approach to the management of water resources and systems is one of balancing competing objectives. Economics provides a framework for weighing those objectives in determining how much of each to strive for based on concerns for current use as well as long-term sustainability. More importantly, economics provides insight into policies that promote sustainable development by virtue of aligning the incentives of individuals with the long-run interests of the community. This paper shows how economic principles can be applied to reinforce sustainable choices concerning water supply, waste water treatment, irrigation, and watershed management.