Water rationing already happens in a lot of Australia; rationing, increased water supply prices and desalination plants are all part of the plans to ensure water supply, while at the same time people are growing rice and cotton in the desert - morons.

As for being screwed over and so on about water, the Aussie film Mad Max from about 1980 and starring Mel Gibson was all about water shortage leading to marauding gangs pursuing the precious resource; so the idea is not really very new, but still an interesting line of thought.

So... then we WANT the ice caps to melt, right?

A nice side benefit is a lot of douchebags will get covered up with water. Pleasanton is pretty high sea-level-wise, right?

Water. No doubt, desalination will be used. I know our buddies, just kidding, in the middle east use desalination plants.

you're behind the curve - watch "Flow" the movie (http://flowthefilm.com) - highly recommended.

water is an "artificial shortage"?? um... err.???

i'd take a closer look at the index fund you invested in. may be honest enough companies, but if it's any of the european water cartels, i'd stay well clear.

ps. if you drink bottled water you're a douche.

Saw a related article today about our possibly using bail out money to pay dairy farmers to retire some cows - to artificially decrease the milk supply; for the purpose of propping up milk prices. The last time this was tried, the "retired" cows were butchered and the price for beef got hammered. And the milk prices were only briefly effected as the farmers got more production out of their remaining cows - and the extra supply forced the milk prices right back down.

Scott, as an economics major you certainly must see the tragedy of the commons at work here.

The argument goes, water is too vital to put a price on, so governments MUST be the sole supplier. (And we all know how efficient and fair governments are.)

So you are absoluty right that there will be a water shortage, there will be rationing, and there will be rent seeking, where the connected will profit at the expense of the masses.

See David Zetland's comments at Aguanomics for interesting discussions on the potential for water markets. As a libertarian leaning person, I think you will find David's views interesting.

I'm gonna put Lake Michigan up for sale on eBay. I know there will be some takers.

Dil bert Dude,

Another reason to drink more wine? 20 million Europeans can't be wrong?

Shaka

Maybe dehydrating and storing water will help?

Scott,

Have to agree with THE DUDE here. Desalination has huge potential for improvement.

http://en.wikipedia.org/wiki/Desalination

Also, "clean" water is still a huge issue in developing countries. Couple of years ago, I was on a corporate trip to India and overheard the following...

"Yes, Sanjeev won't make it in today he's got typhoid."

wtf? Typhoid? Is this the f*ing 14th century? Like "scurvy" or his little brother, "rickets", this is a word I've heard, but never really Experienced. It is ridiculous to me that somewhere in the world right now, people have typhoid.

Clean water is a much bigger deal than people realize and causes huge and pervasive health problems when it isn't readily available.

But it begs the question, what would it take to bring clean water to say, the 8 million people in Bangalore? You have to imagine that someone smart could pull off an extremely cool setup of infrastructure, bank on that project, while doing a huge humanitarian thing at the same time.

arbyisme -

We're too busy fighting "man-made" global warming. Look at the news today on friggin Henry Waxman (D-California).

The world is collapsing and Henry Waxman wants us to stop exhaling while it does. What a tool.

Whether the issue is water, land, or sky it still all boils down to energy. The kid on the block with the most energy wins. Water has to be found, pumped, processed and moved to the market. Water does not run downhill, it runs to money and votes. The Middle Eastern Cartels are already launching a multibillion dollar investment in renewable energy as they know oil is a finite recourse. They openly state they still want to export energy to the world when they have less oil. Talk about bending over, they still will be boinking us well into the twenty-first century if we do not get off our collective butts in this country and try to beat them at their own game. Hope we can do it.

Water rationing? Crap.

Chris Tann, LAWNMOWER MAN

Hey, where did my comment to yesterday's blog go, where I suggested just that?

Anyway, I'm sorry, but the idea of a "water bubble" just makes me want go go invest in scuba gear, or soap, or something. Yeah, a "bubble bubble"! Hmmm, I can just see PHB buying up bubbles because "everyone else is". :->

I live in South East Queensland, Australia and all of the things you described above have occurred here over the last few years. We had failed to invest in water infrastructure for 20 years and then had a drought for 7 years and our dams were down to 10% however the main reason for the dams being so low was the huge population growth we have had without an increase in dams etc.
Anyway as usual the government went into panic mode at the last minute and we have just been gouged by the infrastructure companies building desalination plants and the recycled water grid in record time. Although who can blame them - if you have the opportunity to bid uncompetitively on a massive job that has to happen wouldn't you put in a massive price and see if the government is stupid enough to accept it?
Anyway luckily it has been raining a lot in the last 6 months so the dams are back to 50% (which is where they were designed to be as the biggest one was built for flood mitigation not as a reservoir) which means the pressure is off the government and they have gone back to competitive tendering for the remaining dams that need to be built.
Anyway all I can say is beware of low government investment in water - our crisis means we have spent $8 billion dollars on a desalination plant that is faulty and a recycled water pipeline that the government is now not going to turn on because we have an election coming up and people are freaking out about drinking recycled water.

Positive investments would be in construction outfits that specialize in desalination plants, distributing water, creating irrigation systems, canals, and creating clean water in areas where the water is less than safe to drink because of nasty microbes and or chemicals.

I could go to my local stockbroker and talk to him about creating water rights futures to sell in open market. Why wait? We understand better how to pick an area that is destined to become drought due to changing weather patterns, land use, and population estimates. In the Middle East, Saudi Arabia and The Gulf States are building desalination plants right and left for their burgeoning populations, regions which if it wasn't for money, oil and greed, nobody in their right minds would ever want to build a city. But hey, if it wasn't for gambling, booze and broads, why would anybody live in Las Vegas?

Inc. Magazine had a story about future water shortages. <a href="http://www.inc.com/magazine/20081101/blue-is-the-new-green.html">Blue is the new Green</a> is the name of the article. When I read that article, I kept visualizing scenes from The Road Warrior. You know, the moist robot known as Mel Gibson portraying the character Mad Max.

Up here in Canada, where we have the world's largest supply of fresh water and we consume more per capita than anywhere else in the world, it's been in the news for a while now. Mostly the smart news though that doesn't get a lot of attention and spends a lot of time talking to boring people who actually know what's going on.

The main reason we care is because we know that when you run out, there will be a lot of thirsty people with a lot of guns knocking on our door.

(I think my point is that there is some truth to it, and I hope it goes the way of Y2K as you described; big enough problem lots of smart people = problem fixed without too many people dying)