Why has water become an economic commodity? Discuss.
Water has become an economic commodity because past development has polluted and dried up rivers and other aquifers. This has transformed water from a freely available natural resource into a scarce good that must be valued.
With population explosion and the advent of industrial revolution, the demand for resources for both production and consumption exceeded the rate of regeneration. This led to a reversal of the supply-demand relationship — there is now increased demand for environmental resources but their supply is limited due to overuse and misuse.
The absorptive capacity of the environment has been overwhelmed, and intensive extraction has exhausted water bodies. Consequently, water has become an economic commodity.
Explanation
The textbook clearly states that 'past development has polluted and dried up rivers and other aquifers making water an economic good.' The context explains that earlier, demand for environmental resources was less than supply, but with population explosion and industrial revolution, demand exceeded the rate of regeneration. This reversal of supply-demand relationship, where demand is high but supply is limited due to overuse, has made water an economic commodity.