Case 2

According to the United Nations, two-thirds of the world's population could face chronic shortages of water in the next few decades. The shortages have been caused by increased industrialization, public water supplies being used exploited by private corporations, the effects of climate change, and increased urbanization. Some countries are already importing huge super-tankers of freshwater from other countries.Recently severe water shortages have already affected hundreds of millions of people around the world including in cities such as Phoenix, Tokyo, Beijing, Chennai, Cape Town, Mexico City, Jakarta, Melbourne, and So Paolo.

While New Hampstead, a state of about 5 million people in a prosperous western country, is not facing a shortage yet, there is some concern about managing the supply in the long term.New Hampstead (NH) has significant fresh water resources, which has made it attractive to companies like Aqualor, which pump groundwater to sell to consumers of bottled water.

A previous NH government granted Aqualor permission to pump groundwater from a site just outside of the capital city of Marieville.The government said that no regulations were required because they trusted the company would use the resource "responsibly", and that it would create jobs in the area.Initially the company was given free access to this water until public outrage and protests forced the NH government to charge an "administration fee for the management of the resource" beginning in 2016. However, this fee amounts to just $2.25 per million litres of water. In comparison, an average New Hampstead citizen pays significantly more for their water. For example, in the nearby city of Pembroke, the cost is $1.63 per one thousand litres, and most residents of Marieville pay a flat rate of $568 despite using a fraction of the water Aqualor does.

The minimal fee gave rise to further outrage from the public, as Aqualor sells this water from our own mountains back to us at exorbitant pricesprices that are higher than the price per litre that we pay for gasoline. The NH government has three arguments to support this policy however.First, they argue that letting Aqualor extract the water might harm the environment, but it is not as bad as the mining or forestry industries where the damage is very obvious.Second, they argue that the government cannot be in the business of selling water since this would commodify a natural resource leading to some troubling consequences.Instead, by granting 'pumping rights', they argue that they have not sold the water to Aqualor, but merely given them access to the water.Third, if they did not allow companies like Aqualor to apply their private interests to water, the citizens would abuse this resource because it was free. In their view private companies are much better at managing and preserving natural resources than public bodies because people value things more when they have to pay for them. This will inevitably lead the public to consume less, as the price will increase with scarcity.

So far, however, Aqualor has not attempted to "manage and preserve" the water they were given access to. In fact during the droughts in the summers of 2015, 2016 and 2017, while local governments were imposing water restrictions and fines on citizens, Aqualor was able to increase the amount of water it was pumping and selling due to the increased demand for water during the summer months. This is despite repeated calls from local scientists that we need to start thinking about how to better manage our water supplies, which are not infinite.

Many experts argue that the actions of companies like Aqualor will affect not just the people living in NH, but also fish and wildlife populations. "Every gallon removed is needed for the environment to sustain itself," notes a multi-disciplinary research group. They note that corporations like Aqualor have a track record of pumping all the water in an area until it is depleted and then moving on. This is what has occurred already in Michigan, Pennsylvania, Bolivia, Chennai, Cape Town and other sites around the world. As for the promised jobs, the Aqualor plant has increased its use of automation to drive down costs.The water plant now employs a total of 12 people, but only in part time positions.

Question

Using this case study, should companies like Aqualor be given permission by governments to pump and sell groundwater? Even if they fail to manage the water supply region, do the economic benefits Aqualor provides outweigh the environmental harm that might result from their actions? Is there any difference in the company's actions compared to the actions of farmers who also pump groundwater to grow their produce?