Valuation and Market- Based Pricing of Economic and Ecosystem Services of Water Resources

This chapter presents a comprehensive review of valuation of water. Though existing literature has a large number of papers on the significant attempts at valuing water, a number of publications only consider certain specific aspects of water pricing, rarely attempting a comprehensive review. Water pricing, whether by government mandate or in practice, has to take into consideration a host of concerns, and hence cannot be confined to bounds of individual disciplines. This chapter presents a survey that attempts to resolve this gap by summarizing accumulated knowledge on valuation of water resources and dealing separately with valuation of water in the economic and the ecosystem sectors. Under each component, a host of studies attempting valuation of water have been reviewed. Finally, the policy implications of water pricing have also been discussed in light of the scarcity value theory.