What problem arises when the extraction or transportation costs of water are too high?

Economic water scarcity occurs when the costs associated with the extraction, treatment, and transportation of water are prohibitively high, making it inaccessible for large segments of the population. This situation is particularly common in areas where water resources exist but are not developed adequately or where infrastructure is lacking. In such cases, even though there may be sufficient physical water resources available, the financial and technological barriers prevent people from accessing it effectively, resulting in limited water availability for agricultural, industrial, and domestic uses.

Regions experiencing economic water scarcity often face challenges related to poverty, weak governance, or lack of investment in water infrastructure, which further exacerbates the problem by limiting the ability to utilize existing water resources. This contrasts with physical water scarcity, where actual water resources are insufficient to meet the demand in a given area. Water stress can signify a situation where demand is approaching or exceeding supply, but it does not always specifically relate to economic factors. Water pollution, on the other hand, refers to the contamination of water sources, affecting water quality rather than the economic accessibility of water resources.