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Image 3: Slippery Slope                                      (http://www.economist.com/news/briefing/21688919-plunging-prices-have-neither-halted-oil-production-nor-stimulated-surge-global-growth)

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Image 3: Slippery Slope                                      (http://www.economist.com/news/briefing/21688919-plunging-prices-have-neither-halted-oil-production-nor-stimulated-surge-global-growth)

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We chose this image because it shows the price of a barrel of oil vs the world oil supply. Now the graph looks like it has a steady flow as demand increases price drops. If you look closer though at the scales you can see that the world oil supply had only risen changed only by 7 m b/d where the price dropped almost 90$ per barrel. This is a dramatic change in price for such a small increase in world supply. This is the kind of effect that scarce ideology can have on our economy which had a direct impact on our money supply. We still remember in 2012 when prices got as high as 1.40$ a liter when they actually probably could have been 70 cents or less a liter.

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Image 2: Water Scarcity Map                          (http://www.olino.org/us/articles/2009/07/06/desertec-can-provide-whole-europe-with-solar-energy)      

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Image 2: Water Scarcity Map                          (http://www.olino.org/us/articles/2009/07/06/desertec-can-provide-whole-europe-with-solar-energy)      

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This image shows the projections for 2025 of Water Scarcity in the world. As Scarcity goes up so will the price of water effectively draining our money supply(inflation). In places with red or physical Scarcity there is not enough water to meet the physical demands of that economy. We live in a blue area meaning we are only using roughly 10-20% of our supply. In Canada we are lucky to have the most fresh water in the world as it really helps keep the price down. But as Scarcity increase so will the demand for water which could be beneficial(for people who stand to make a profit) but a problem for most in the future.

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This first image is a price vs quantity graph. The two lines intersecting show Supply(s) in purple and Demand (D) in green. The middle point shows equilibrium. This graph is a great representation of how supply and demand affect the money supply in our economy. If something is low in demand and high in supply it is worth less, if something is low in supply but high in demand the price increases. A great example of this would be the rising prices of gasoline as the supply for fossil fuels depletes the demand goes higher which drives the price up. This is because oil is becoming more scarce and harder to refine. The most valuable piece of information from this graph is that Supply and Demand are inversely proportional.

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Video 3: Oil Scarcity                                 (https://www.youtube.com/watch?v=yGKOC4Swgu4)

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Video 3: Oil Scarcity                                 (https://www.youtube.com/watch?v=yGKOC4Swgu4)

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Video 3 is a great example of how oil prices were manipulated through scarcity. In the early 90s it was said that the oil was running out and that there was only 34 billion barrels of oil left. This lead to the price of oil rising as the supply went down demand went up. This follows the natural economic distribution, but in this video the one reporter than says we have already recovered 50 billion barrels since that announcement. So what gives well the video says that investors had been buying up the oil stocks and selling them on the futures market and the hope is they sell it before they have to meet on their obligations. At one point they were trading 27 barrels a day on the stock market for every 1 barrel of oil consumed. This means that they were buying and selling oil for a demand that did not even exist at the time. This lead to investigators saying that something was driving the price up which made no sense since the supply kept rising the price should of went down. This was a great video and would recommend it to anyone studying scarcity. One thing that we will remember from this video is that we cannot always trust the information that is provided to us, as was the case with oil. People lied just to make more profit and this had a great affect on our economy as gas prices even today still rise.

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Video 1 : What is Scarcity?                            (https://www.youtube.com/watch?v=zcN0d8foBXI)

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Video 1 : What is Scarcity?                            (https://www.youtube.com/watch?v=zcN0d8foBXI)

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This video gives a quick overview on the topic of scarcity. We chose it because its simplicity really explains the topic very well. It uses great images and examples to relate to very common problems in society. The video begins by introducing the topic of Scarcity and how it is a supply/demand or wants vs. needs situation. Scarcity is really all about decisions that we as people or economists must make everyday to keep our lives/countries going. One example in the video is a person having to choose between a new computer or iphone. They choose the iphone and therefore could not get the new computer. This is a simple problem but it validates the point that sometimes we must make tough choices when we are scarce on money. The piece of information we found most useful on this video was at 1:47 the quote" The concept of scarcity explains why individuals and society make choices".

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Website 3: Energy Scarcity                                                  (http://www.nationalreview.com/article/434488/energy-scarcity-oil-production-rises-putting-lie-myth)

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Website 3: Energy Scarcity                                                  (http://www.nationalreview.com/article/434488/energy-scarcity-oil-production-rises-putting-lie-myth)

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This website is an amazing read as it talks about scarce ideology and how it has been applied to oil in past and future generations. It begins by comparing oil to many other scarce claims in our history such as food supply, water or even rare earth elements. It then discusses how none have been under more scrutiny than oil though. The fact is though oil being scarce has never actually been the issue the issue is that we have too much oil. So when we refine too much at a certain time we drive the price down which effects the prices in our economy. This can be a great thing for consumers as lower gas prices are always a great thing. The problem with this is that it cannot be sustained as we would just burn through the oil at alarming rate. Also the cost of everything would go down. This could lead to a market crash though so oil needs to be regulated. One thing from this website that will stick with is how ethanol was a complete lie. People were convinced that oil could run it and so now 10% of gas is actually a ethanol mix. This actually causes us as consumers to pay 10 billion $ more every year to drive our cars.

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Scarcity ideology pervades modern environmentalism. Indeed, the environmental movement has long relied on the idea that we are running out of, well, everything.

We are running out of food - that claim goes back to 1798, when Thomas Malthus argued that starvation for many people was inevitable because farmers wouldn't be able to keep up with population growth. In 1968, Paul Ehrlich published The Population Bomb, in which he grimly declared that "the battle to feed all of humanity is over. In the 1970s hundreds of millions of people will starve to death in spite of any crash programs embarked upon now." Ehrlich's book was commissioned and published by the Sierra Club. Two million copies were sold. Never mind that today we are feeding twice as many people as we were when Erhlich made his dire prediction and that we are doing so on about the same amount of farmland.

We've also heard claims about impending shortages of everything from water to rare earth elements. But no commodity has been the source of more scarcity claims than oil.

And that has led Roger Stern, an energy economist at the University of Tulsa, to coin the term "scarcity ideology." Stern recently published a must-read essay, "Oil Scarcity Ideology in US Foreign Policy, 1908-1997," that shows just how deeply the concept of scarcity has polluted American energy policy and foreign policy. Stern's paper, along with a new book, The Price of Oil, by Roberto Aguilera, a research fellow at Curtin University in Australia, and Marian Radetzki, an economics professor at Luleå University of Technology in Sweden, put the lie to the entire concept of peak oil and petroleum shortages.

Before I delve into those publications, recall that last week, just five days before scads of Greens gathered to celebrate Earth Day, some of the world's biggest oil-producing countries met in Doha, Qatar, in the hopes of reducing oil production to relieve a worldwide surplus that has sent prices down by about 60 percent over the past two years or so. But no deal was reached. In fact, right after the meeting, both Russia and Saudi Arabia threatened to further increase their output, prompting Venezuelan oil minister Eulogio Del Pino to say that without a multi-nation deal to cut production, "we could see a steep fall in oil prices in the next few weeks." The Venezuelan predicted that prices, now at about $44 per barrel, could go below $30, owing to oversupply.

None of this should be a surprise. There's never been a global shortage of oil. In fact, hard as it may be to believe, the recurring problem in the oil market has been not scarcity but surplus.

There's never been a global shortage of oil. In fact, hard as it may be to believe, the recurring problem in the oil market has been not scarcity but surplus.

The most important interventions - and attempts at interventions - in the oil market (the failed meeting in Doha is the latest example) have aimed at limiting oil production to help stabilize prices. In 1930, Dad Joiner, by drilling a rank wildcat well in Rusk County, discovered the super-giant East Texas Field. Within months, the world was flooded with oil and prices crashed, going from $1.30 per barrel to 13 cents. After a few years of political and legal wrangling, the Railroad Commission of Texas was given the authority to limit production in Texas oil fields. It did so by setting "allowables" - that is, the amount of oil that producers were able to produce and sell in a given month. By limiting production from one of the world's most prolific oil provinces, the Railroad Commission helped stabilize prices. In 1973, OPEC effectively succeeded the Railroad Commission, and it did so by directly copying the Commission's model of allowables.

But on Thanksgiving Day 2014, OPEC's model officially went kaput. The wannabe cartel recognized that it couldn't control the flood of shale oil coming out of the United States. (Between 2009 and 2015, U.S. oil production soared by about 4 million barrels per day. That's roughly equal to the combined oil output of four members of OPEC: Ecuador, Indonesia, Libya, and Qatar.) Seeing this surge in production, Saudi Arabia, which has long dominated OPEC, responded by opening its taps, hoping that a price crash would force shale producers in the U.S. to reduce their drilling and therefore reduce supply.

Despite this continuing problem of oil oversupply, policymakers and environmental activists stubbornly cling to the notion that oil is scarce. They have done so for decades. A few examples:

&dash;In 1914, a federal agency, the Bureau of Mines, predicted that world oil supplies would be depleted within ten years.

&dash;In 1939, the Interior Department predicted that global oil supplies would be fully depleted in 13 years.

&dash;In 1946, the U.S. State Department predicted that America would be facing an oil shortage in 20 years.

&dash;In 1951, the Interior Department revised its earlier prediction and said that the oil on the planet would be depleted within another 13 years.

&dash;In 1972, the Club of Rome predicted that the world would be out of oil by 1992 and out of natural gas by 1993.

&dash;In 1977, in a televised speech, President Jimmy Carter warned that "unless profound changes are made to lower oil consumption, we now believe that early in the 1980s the world will be demanding more oil than it can produce."

Scarcity ideology was convenient for many interest groups. As Stern notes:

By providing an alarming worldview, scarcity ideology both created and met demand for apocalyptic ideas. Scarcity ideology producers thrived in this trade. Within government, scarcity ideology could be bartered for influence and budgets; within academia for recognition, grants and advancement.

The result of scarcity ideology has been a decades-long orgy of rent-seeking. For instance, Mark Jacobson, an engineering professor at Stanford University, has authored a document in which he claims that the U.S. economy can be run on nothing more than solar and wind energy. In 2014, during a debate at the University of Iowa, he declared that the U.S. had to switch to renewables because we were running out of hydrocarbons.

The most obvious and noxious example of scarcity ideology is the corn-ethanol scam, one of the longest-running robberies of American taxpayers in this country's history. As I showed in a report for the Manhattan Institute last year, thanks to the Renewable Fuel Standard, which requires retailers to mix motorfuel moonshine into our gasoline, American drivers are now paying about $10 billion more per yea r than they would be if they were buying conventional gasoline alone. And that robbery has been made possible because Big Corn has sustained a decades-long campaign about the supposed evils of foreign oil.

Here's Stern again:

Peak oil forecasts . . . ,all of which proved wrong, repeatedly led policymakers to assume that rival powers sought to seize dwindling supplies or that disaffected exporter-states would decline to sell. Perennial expectation of impending scarcity elevated the perceived importance of foreign oil, especially from the Middle East.

That's a key line: "that disaffected exporter-states would decline to sell." The meeting at Doha earlier this month proved, yet again, that the exporter states don't have a choice. They have to sell their oil into the global market. If they don't, they have no revenue. Without revenue, the rulers of the petrostates cannot stay in power for very long. Or, for that matter, even keep their people supplied with diapers. An acquaintance told me recently that his mother-in-law often waited in line for four hours before being able to buy nappies in Caracas. Such is the progress that the Bolivarian Revolution and NicolásMaduro are having in Venezuela.

So what does all this mean for future Earth Days? In the view of Aguilera and Radetzki, whose book was published last October, the past is merely prologue. They predict that, thanks to horizontal drilling and hydraulic fracturing, the technologies that fostered the shale revolution, oil will remain abundant for decades to come. In addition to providing an excellent review of the history of the global oil market, Aguilera and Radetzki point out that other countries can emulate what the United States has done with its shale deposits. (Shale is the most abundant form of sedimentary rock on the planet.) But oil producers don't have to target shale. Instead, they can now use horizontal drilling and hydraulic fracturing to increase production from conventional oil reservoirs in Brazil, Argentina, Canada, Mexico, and many other non-OPEC countries.

The punchline here is obvious: The more energy we find, the more energy we find.

Those two technologies, they predict, "will have an overwhelming impact on global oil supply." So much so that, the two authors expect global oil production could rise by nearly 20 million barrels per day by 2035. They further expect that moderate oil prices - they predict $40 oil in 2035 - will mean that "efforts to develop renewables for the purpose of climate stabilization will become more costly [and] require greater subsidies." That's a debatable claim. The cost of solar panels, for instance, has been falling for decades, regardless of price gyrations in the oil market. Aguilera and Radetzki are undoubtedly right, however, when it comes to the mandates and subsidies provided to biofuels, which, in fact, have a negative impact on the climate. The same is true for the fat subsidy ($7,500 per vehicle) given to buyers of Teslas and other electric vehicles. (Read my recent article on this welfare program for the Benz and Beemer crowd.)

Of course, Aguilera and Radetzki could be proven wrong about oil prices. But what a marvelous outlook they provide. They expect that oil-importing countries will have the advantage in the years ahead, and they predict that lower oil prices will, "on balance, provide a great advantage to the global economy."

Furthermore, they point out that the need for continuing military interventions in the Middle East has been dramatically reduced. Indeed, they write that foreign military forays in the region have not been productive in energy-policy terms. Instead, they say, those interventions have "contributed to destabilized output and exports."

The punchline here is obvious: The more energy we find, the more energy we find. That means we can make energy cheaper and, in doing so, provide every type of power we desire, from motive power and cooking to lighting and computing. Despite decades of handwringing about energy shortages, the U.S. and the rest of the world are now looking at a world of hydrocarbon-energy abundance that will last for decades. The challenge now, given that both Hillary Clinton and Bernie Sanders have declared plans to drastically limit, or even ban, hydraulic fracturing, is to ensure that this vibrant new era of energy abundance isn't turned into an era of energy scarcity by government fiat.

Robert Bryce - Robert Bryce is a senior fellow at the Manhattan Institute. @pwrhungry

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$40 Oil and the Twilight of 'Scarcity Ideology' | National Review

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Scarcity ideology pervades modern environmentalism. Indeed, the environmental movement has long relied on the idea that we are running out of, well, everything. We are running out of food - that claim goes back to 1798, when Thomas Malthus argued that starvation for many people was inevitable because farmers wouldn't be able to keep up with population growth.

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Video 2: Water Scarcity                    (https://www.youtube.com/watch?v=VIaw5mCjHPI)

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Video 2: Water Scarcity                    (https://www.youtube.com/watch?v=VIaw5mCjHPI)

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Video 2 is a  based on Water Scarcity one of the fastest growing global issues. Water Scarcity is a very serious threat that effects our money supply exponentially. This video begins by giving an overview on  our water supply and current consumption vs. population. It later explains how much water is consumed to produce food, and products that we use everyday. By 2030 total demand for water will exceed the supply. This will directly drive the price of water up. Already there are countries that are shown in the video who already pay almost 5-6 times more for water than we do in Canada. At the rate we are wasting water though we will be there eventually too. The most important piece of information I learned from this video was how fast the issue of Water Scarcity is rising and the effect it will have on our money supply.

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This website has a lot of good information on how water scarcity is affected by many different factors. Some of these factors affect our daily life and the markets such as Energy and Food production. "Nothing is more useful than water" A quote from this website I thought was dead on as without water life would not exist. As the population grows the water we consume is increasing to keep up with the demand for energy and food. In some areas water scarcity is at the physical level which means there is virtually almost no fresh water available which is forcing countries to find alternative measures to create a supply that can handle the demand. This is causing the cost of water to rise which has a direct effect on our economy. The piece of information that I found astounding is that as our population reaches near 7.4 billion people agricultural production must rise 60% to meat the demand. That means the cost every process that needs water to produce its product (energy, food etc.) will have to rise meaning the money supply will have to inflate devaluing our dollar.

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"NOTHING is more useful than water," observed Adam Smith, but "scarcely anything can be had in exchange for it." The father of free-market economics noted this paradox in 18th-century Scotland, as rain-sodden and damp then as it is today. Where water is in ample supply his words still hold true. But around the world billions of people already struggle during dry seasons. Drought and deluge are a costly threat in many countries. If water is not managed better, today's crisis will become a catastrophe. By the middle of the century more than half of the planet will live in areas of "water stress", where supplies cannot sustainably meet demand. Lush pastures will turn to barren desert and millions will be forced to flee in search of fresh water.

Where water is available, when and in what condition matters hugely. About 97% of the water on earth is salty; the rest is replenished through seasonal rainfall or is stored in underground wells known as aquifers. Humans, who once settled where water was plentiful, are now inclined to shift around to places that are less well endowed, pulled by other economic forces.

Climate change is making some parts of the planet much drier and others far wetter. As people get richer, they use more water. They also "consume" more of it, which means using it in such a way that it is not quickly returned to the source from which it was extracted. (For example, if it is lost through evaporation or turned into a tomato.) The big drivers of this are the world's increased desire for grain, meat, manufactured goods and electricity. Crops, cows, power stations and factories all need lots of water.

To make matters worse, few places price water properly. Usually, it is artificially cheap, because politicians are scared to charge much for something essential that falls from the sky. This means that consumers have little incentive to conserve it and investors have little incentive to build pipes and other infrastructure to bring it to where it is needed most. In South Africa, for example, households get some water free. In Sri Lanka they pay initially a nominal 4 cents for a cubic metre. By contrast, in Adelaide in Australia, which takes water conservation seriously, an initial batch costs $1.75 per cubic metre. Globally, spending on water infrastructure faces a huge funding shortfall. A hole of $26trn will open up between 2010 and 2030, estimates the World Economic Forum, a think-tank.

In many countries people can pump as much water as they like from underground aquifers, because rules are either lax or not enforced. Water use by farmers has increased sharply in recent decades (see chart). This has allowed farmers to grow huge amounts of food in places that would otherwise be too dry to support much farming. But it is unsustainable: around a fifth of the world's aquifers are over-exploited. This jeopardises future use by causing contamination. It also damages the layers of sand and clay that make up aquifers, thereby reducing their capacity to be replenished.

People do not drink much water-only a few litres a day. But putting food on their tables requires floods of the stuff. Growing 1kg of wheat takes 1,250 litres of water; fattening a cow to produce the same weight of beef involves 12 times more. Overall, agriculture accounts for more than 70% of global freshwater withdrawals.

And as the global population rises from 7.4bn to close to 10bn by the middle of the century, it is estimated that agricultural production will have to rise by 60% to fill the world's bellies. This will put water supplies under huge strain.

Food for thought

Extravagance must be tamed. Farmers produce far more food than finds its way into stomachs. Some estimates suggest that as much as a third of all food never actually makes it to a plate, wasting as much water as flows down Russia's Volga river in a year. Richer households are responsible for throwing out the largest share of unwanted victuals. Poorer ones may never even see the produce that rots on slow, bumpy journeys to market.

Water is vital not only for food and domestic well-being. It is "fundamental to economic growth", points out Usha Rao-Monari, head of Global Water Development Partners, an investment outfit backed by Blackstone, a private-equity giant. Scarcity stalls industrial development by squeezing energy supplies. Electricity generation depends upon plentiful quantities; nuclear power requires water both for cooling turbines and the reactor core itself, for example. Coal-fired plants cannot function without it.

Power generation is a thirsty business. Overall about 41% of America's withdrawals go towards cooling power stations. In countries such as Brazil, where hydroelectric power provides more than two-thirds of the country's needs, scarcity is also a worry, particularly when dam designs rely on rivers fed by rainfall (see article). Spikes in energy prices often follow dry periods. Zambia endured sporadic blackouts that began a year ago and lasted until April, when drought crippled power generation from the Kariba dam.

As poor countries develop, global demand for electricity from industry is expected to increase by 400% over the first half of the 21st century. The majority of water-intensive industries, such as coal mining, textiles and chemicals, are found in countries that are particularly prone to water shortages: China, Australia, America and India. Industry can increase strains on supplies too, by polluting water, making it unfit for human use. Over a third of China's waterways have been spoiled by industrial effluent and other nasties.

Climate change will only make the situation more fraught. Hydrologists expect that a warming climate will see the cycle of evaporation, condensation and precipitation speed up. Wet regions will grow wetter and dry ones drier as rainfall patterns change and the rate increases at which soil and some plants lose moisture.

Deluges and droughts will intensify, adding to the pressure on water resources. Late or light rainy seasons will alter the speed at which reservoirs and aquifers refill. A warmer atmosphere holds more moisture (the water content of air rises by about 7% for every 1ºC of warming) increasing the likelihood of sudden heavy downpours that can cause flash flooding across parched ground. This will also add to sediment in rivers and reservoirs, affecting storage capacity and water quality.

Less snow in a warmer world creates another problem. Places such as California depend upon mountain meltwater flowing down in time for summer. Climate change will make the availability of water more variable in Southern Africa, the Middle East and America. The World Resources Institute, a think-tank, ranked 167 countries, and found that 33 face extremely high water stress by 2040 (see map).

Uncertainty surrounds what this will mean for crop yields but a study by academics at Columbia University is not encouraging. Higher concentrations of carbon dioxide in the atmosphere may make plants use water more efficiently in some parts of the world (they will lose less moisture during photosynthesis). Average yields of wheat-growing areas fed by rainfall-mostly located in North America and Europe-might rise almost 10% by 2080 and water consumption decline by the same proportion. But average yields of irrigated wheat-common in countries such as China and India-could drop by 4% and maize harvests would fall everywhere.

High and dry

Altered weather patterns will mean that crops may wither where they once thrived. By 2050, even if temperature increases can be limited to 2°C, crop yields could slump by a fifth in Africa. Altered rainfall patterns could make conditions too dry and hot to grow beans in Uganda and Tanzania, for example, according to a study published this year in Nature Climate Change. But forecasting precisely how regions will fare from deluges or drying is difficult as past weather records are a less useful guide as the climate changes.

There is no single solution for the world's water crisis. But cutting back on use, improving the efficiency of that use and sharing out water more effectively would all help. There are many schemes around the world to meet each objective but so far these tend to be implemented piecemeal rather than in a co-ordinated effort to preserve the world's supplies.

Farming, because it uses water so heavily, is an important target. Changing agricultural practices is vital and farmers, at least in the rich world, are becoming more shrewd in their use of water. Precision planting, hybrid seeds that require less watering and other technologies are all helping to conserve precious supplies. Drip irrigation, which targets water directly to the roots of plants rather than spreading it indiscriminately, can cut use by 30-70%.

Water for farming can be gathered through means other than raiding aquifers. Schemes for harvesting rainwater, by collecting it in tanks rather than letting it run away, are commonplace. Recycling wastewater has huge potential. Fruit trees in Israel are showered with it. Overall the country recycles 86% of its sewage, a vastly higher share than any other; Spain is next at just 20%. Israel does not think it can rely on its neighbours to supply it with water. Singapore, reluctant to depend on Malaysia, recycles sewage into drinking water. But politicians elsewhere are too squeamish to let people drink recycled waste.

Water stress afflicts one in four cities worldwide. Policymakers could do a lot of basic things better to cope with it. Plugging leaky pipes would be a start: they cause some big cities in the Middle East and Asia lose up to 60% of their water. Rich cities still have a long way to go too: London wastes 30% of its water through leaks, equivalent to a bathful a day for every household, by one estimate. In Chicago wooden pipes still carry water. Fixing pipes could soon become easier and cheaper. Robotic systems are being tested which can detect and repair leaks by sensing pressure changes around them and plugging holes while pipes are still in use.

Poor countries, where millions live in slums without proper sanitation, need more pipes in the first place, not to mention reservoirs and purification works. Where new infrastructure is required, better methods of modelling scarcity could help. They would let new installations be sited where they will guarantee supplies, even if climate change has an effect on patterns of rainfall. Space Time Analytics, a Brazilian company, is working on a global water-risk management system that will have the ability to predict likely shortages with much more precision.

To understand why water supplies become insecure, you first need to know two things that affect the volume of water stored in lakes and reservoirs, says Juan Carlos Castilla-Rubio, the firm's boss. The first is the changes in the volume stored over the years. The second is the variability during any given year. This is because, in many places, water storage represents the buffer between triumph and disaster during unexpected dry spells. And knowing how it may be likely to vary in the face of climate change could justify appropriate infrastructure investment ahead of time.

Go with the flow

Better modelling tools may also convince governments everywhere of the urgency of dealing with water scarcity. There is plenty of capital available for water infrastructure, reckons Ian Simm of Impax Asset Management, an investment firm. The problem lies in securing consistent political support for it, especially at the local level. Hard-nosed private investors have turned away from water, reluctant to risk vast sums for uncertain returns stretched across future decades. "If I build a billion-dollar desalination plant, will I get paid? That is the sector's biggest issue," explains Ms Rao-Monari.

Desperately dry countries have shown that impressive infrastructure can be built with money and consistent political support. Desalination plants convert seawater to drinking water, but at a cost that can induce tears. Unsurprisingly, most of the biggest are in the Middle East. The Sorek plant in Israel, the country's largest, supplies more than 1.5m people-equivalent to about 20% of municipal demand. But the process is still more expensive than almost all other ways of supplying fresh water because of the enormous quantities of electricity required.

Desalinated water is far too expensive for irrigation, points out Mike Young, a water-policy expert at the University of Adelaide. Better for countries to eke out the little they have more efficiently, he argues. Existing management systems often hinder such sharing. In poor countries they are often rudimentary. In rich countries entitlement and allocation schemes largely came into being during times of abundance. They are often slow, bureaucratic and far too scattered. America, for example, has more than 50,000 water utilities. Everywhere, water is devilishly difficult to manage. As it flows, it is used and reused, making it hard to track and measure.

Rights regimes that are well designed and implemented are among the most effective tools for distributing water fairly and sustainably. Under one such system, Australian states began reforming water management in 1994. Few others have followed, though attempts at reform in Chile and Yemen have met with varying degrees of success.

An "unbundled" system, in which component parts are managed separately, could replace irrigation systems where those who arrived first enjoy more senior rights. In California this has created a division between those who came to the state before and after 1914, for example. And as any water saved by irrigators passes down to more junior rights holders, there is little incentive there to adopt technologies which boost water efficiency.

To create tradable water rights, Australia first drew up a baseline for water use, taking into consideration past commercial, social and environmental needs. Next, old water rights were replaced with shares that granted holders (usually landowners) a proportion of any annual allocations. Clever formulae take account of the seniority of pre-existing rights. Different classes of shares determine who gets what and when to balance the competing claims of upstream farmers and downstream urbanites. After that a regulatory board makes sure that all users get as much as they are entitled to.

A drop worth fighting over?

Allocations made to shareholders are tradable, but those receiving them can also store them for the future. This prevents any sudden wasting of water at the end of each year and encourages thrift during a drought. Issuing shares in perpetuity ensures that a holder can have more water only if someone else is prepared to have less. A centralised register holds everything together. Two markets for trading have been created: one in which shares are exchanged, and another for allocations of water in a given year. The idea is not a new one. In places such as Oman, aflaj systems involve villages trading in shares and in minutes of water flow.

Pooling resources

Such regime change originally met strong resistance from farmers and other big users in Australia. But trading allocations reaped enormous rewards for shareholders. During the first decade of reform the annual internal rate of return from owning a water right was over 15%; those who held water shares saw the value of their rights double every five or so years. But following this example elsewhere will be tough. Even rich countries will struggle to unbundle rights that have accumulated over decades.

Reforming water management is urgent nonetheless. More than two centuries ago Adam Smith was only moderately gloomy about the precious liquid. Filmmakers today take a more dystopian view. In the latest "Mad Max" film, for example, armed gangs race around desert landscapes, fighting and dying for water. Such scenarios are still fiction, fortunately. But the prospect of water wars is far from fanciful. Some think that global drying is one of the causes of bloodshed in such places as Somalia, Sudan and Syria.

With clever pricing, clearer ownership and a bit of co-operation, water scarcity can be alleviated. If humanity fails to act, it will get just deserts.

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Water scarcity: Liquidity crisis | The Economist

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"NOTHING is more useful than water," observed Adam Smith, but "scarcely anything can be had in exchange for it." The father of free-market economics noted this paradox in 18th-century Scotland, as rain-sodden and damp then as it is today. Where water is in ample supply his words still hold true.

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This website discusses how Scarcity is used in marketing by controlling the supply of a product to increase the demand and get consumers to buy. I thought this was a good read since we are exposed to this type of marketing everyday. It begins by stating the pros and cons of this practice. Next it shows how major companies like Nike and Adidas exploit profits by releasing a limited amount of a new product (ex. shoes). This creates a scarce amount of supply which makes consumers want to buy the product as soon as it is released. This also drives the price up as there is only a limited supply for the demand. The main goal of this practice is too increase the demand of a product. The pros cons and points for creating scarcity demand I found were very useful points to know and understand.

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Creating scarcity in marketing is a common practice. Consumers tend to be more attracted to items that are not readily available. Creating a scarce supply of a product can sometimes lead to an increase in demand, which is the scenario marketers intended to create. One of the main goals of marketing is to increase the demand of a product, and with this strategy new products and limited edition products are created to mimic this strategy. Scarcity of products has been viewed as a successful marketing practice; it motivates consumers to make an immediate purchase in addition to generating a buzz around the scarce product. - Chelsea

As with any other practice, there are pros and cons to this strategy.

3. Customers uninterested in being rushed

Creating Scarcity of Products to Create Demand:

Scarcity Marketing - Nike & Adidas

Footwear giants Nike and Adidas use scarcity marketing through the release of limited-edition footwear. The firms appeal to the sensibilities of "sneakerheads," a profitable sub-demographic for marketers today. The concept of limited-edition sneakers boosts demand by creating a sense of urgency - it makes consumers fearful of not acquiring a particular shoe if they don't act fast. Scarcity (real or perceived) makes a product more desirable and in demand. It not only increases the value of the product, it motivates those who want to be part of the trendy crowd to step and buy.

adidas Originals SL 72 Limited Edition

Limited editions also create powerful branding. New product launches create massive buzz, making consumers eagerly anticipate the hottest new release. Also, this form of scarcity marketing has created a highly lucrative second-hand market where special edition footwear sells for three to five times the cost of retail.

Nike Cristiano Ronaldo Special Edition Boot

Nike CJ181 Megatron shoe collection

Scarcity Marketing: Macy's and Nordstrom

Scarcity marketing is an effective form of marketing since it urges consumers to purchase now rather than later. Consumers are more likely to purchase if it is advertised that items are: limited quantity, limited edition, or as having a featured price for a limited amount of time. There are several companies that utilize scarcity marketing. Two fashion retailers that successfully use scarcity as a way to drive among consumers are: Macy's and Nordstrom.

Nordstrom implements scarcity marketing through their Nordstrom Rewards program. Consumers that have the Nordstrom Rewards card are offered special, final markdowns days before the sales are offered to the rest of the public. Users are able to log onto Nordstrom's official website and view such exclusive sales virtually and immediately. Such a program is a creative and successful way to reward loyal customers.

Macy's is known for their constant supply of discounts and sales. However, their DoorBusters are one of their more exclusive offers. DoorBusters are special offers available in-store for a limited time the morning of the sale. This is a great promotion to increase traffic in desired time frames of the day when it is generally not as busy.

Black Friday

Black Friday, the day after Thanksgiving, is one of the major shopping days in the US. This is a day where retailers mark down items significantly for shoppers and officially ring in the upcoming holiday season. The term "Black Friday" was coined in the 1960s to mark the kickoff to the Christmas shopping season. "Black" refers to stores moving from the "red" to the "black," back when accounting records were kept by hand and red ink indicated a loss and black a profit.

Today, it seems as though retailers compete to release holiday deals before Black Friday, but they all still participate in providing a scarce number of products in order to create demand. They release ads weeks and sometime months in advance to inform consumers that a limited number of items will be available at deeply discounted prices. Shoppers have been seen lining up days in advance at stores like Best Buy, Target, Apple, and Walmart. The limited-time-only nature of Black Friday triggers an innate fear of scarcity that drives people to buy.

Making products seasonal or having a product that has the potential to be in demand at a certain period during a year makes scarcity part of a brand's marketing campaign. Releasing products on a seasonally builds anticipation and drives customers to buy from a store. Starbucks is one company that does this every season. They launch various drinks during a certain time so customers have something to look forward to each season. One of the brand's most prominent seasonal drink is the Pumpkin Spice Latte. It is highly anticipated and customers go out of their way to buy it throughout the fall season. During the winter season, Starbucks releases the Peppermint Mocha Frappuccino and other holiday flavors as well. In order to compete, McDonald's McCafe also releases seasonal drinks that are similar to those served in Starbucks because they learned that using scarcity as a strategy is a great way to engage with customers and increase sales.

Sources: Google & blog.propelad.com

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Creating scarcity in marketing is a common practice. Consumers tend to be more attracted to items that are not readily available. Creating a scarce supply of a product can sometimes lead to an increase in demand, which is the scenario marketers intended to create.

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to our Padlet wall which will be discussing Scarcity and how it affects our money supply.

Scarcity is what we in economics know as the basic economic problem. Something is scarce when it is limited in supply or demand. As you read through our wall we will discuss different factors of scarcity from a global point to the everyday life of a Canadian.

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"Scarcity and its affect on our money supply"

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"Scarcity and its affect on our money supply"

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By:
Mike Frackowiak 100401611
Scott Slattery 100481563