Is water scarcity in urban areas about scarcity?

Water scarcity in urban areas represents a fundamentally different kind of water stress than the physical shortage that arises from hydrological characteristics of a given area. In natural terms, scarcity is descriptive: a region with sparse rainfall, shallow aquifers, and minimal surface flow is simply arid. This type of scarcity is objectively measurable through hydrological data, such as rainfall, runoff, groundwater recharge, and evapotranspiration, and, as Shiklomanov (2000) and the UN’s global assessments remind us, it defines the physical boundary of what is possible within the global water cycle. In these contexts, scarcity is not a crisis but a condition: ecosystems evolve according to the water that is available. Deserts, rainforests, and wetlands are forms of ecological balance and are not the manifestations of a problem.

However, those parts of the world that suffer from absolute physical scarcity rarely have to sustain large populations under such conditions. No community would deliberately settle where water is scarce. The real challenge emerges in regions where, by quantitative measures, water is available, yet it remains unable to meet all the competing needs of its users. Here, scarcity is not a natural phenomenon but the product of the organization of human systems.

The problem lies in the tension between availability and accessibility. When water exists but cannot be effectively used or delivered, the scarcity is structural. This occurs when social, economic, and regulatory systems prevent physically sufficient water from meeting all demands. Human and household consumption, municipal services, energy generation, agriculture, industry, mining, and ecological functions all draw upon the same finite flow. Allocation rules, water rights, market interests, and trade further intensify competition. The paradox becomes clear when a scarce resource is used to produce water-intensive goods for export, effectively transferring local water to global markets. The Aral Sea tragedy stands as an emblematic example: irrigation for cotton in the Amu Darya and Syr Darya basins diverted flows away from the sea, transforming it into a desert of saline dust and toxic residues, damaging health, agriculture, and climate alike. Scarcity, in this case, was engineered through economic structure and political decision-making.

Water scarcity is therefore not a single condition but a layered phenomenon. Physical scarcity describes the absolute limits set by nature: the maximum expected amounts of rainfall, available surface water, and natural aquifer recharge. These variables collectively establish the hydrological cycle's fundamental baseline. Functional scarcity emerges when water exists but is not available at the right time or in the right place. Hanasaki et al. (2013, 2016) demonstrated this clearly in their socio-hydrological modeling: regions with increasing annual runoff may still face daily or seasonal deficits when supply and demand are misaligned. Structural scarcity arises where physical and functional scarcity intersect with governance and socio-economic organization. Guan et al. (2014) describe this as the accumulation of “unavailable water”, the volumes lost through pollution, inefficient allocation, or institutional failure. In such cases, water remains in the basin but no longer serves human or ecological needs.

Urban areas embody this paradox most visibly. With dense populations and overlapping demands, cities rely on vast engineered systems to collect, treat, and distribute water. Yet, as the OECD (2024) and World Bank (2023) emphasize, the primary constraint today is not hydrological but institutional: fragmentation of responsibility, inadequate pricing, underinvestment in infrastructure, and the externalization of environmental costs all contribute to scarcity even where total supply is sufficient. The FAO’s integrated water management frameworks further stress that sustainability depends not only on physical volumes but also on the capacity to balance human and environmental requirements, thus recognizing nature as a water user in its own right. In many ways, this marks a shift from a physical to a structural understanding of scarcity. The earlier concept measured scarcity in cubic meters per capita; the newer perspective measures it in terms of governance, equity, and ecological balance. As Vargas et al. (2023) have shown, the spatial disconnection between urban jurisdictions and the ecosystems that supply their water leads to what they call service mismatches: administrative boundaries rarely coincide with catchment areas, and so responsibility for water is scattered across agencies and regions. Scarcity, therefore, emerges not from the absence of water but from the absence of coordination.

Structural scarcity, which is the defining water challenge for urban systems, manifests through distinct systemic failures. Urban areas transform water from a natural resource into a managed and contested commodity.

The first and most persistent source of structural scarcity lies in governance itself. Weak or fragmented institutions, overlapping jurisdictions, and poor enforcement create inefficiencies and contradictions in water allocation. The allocation of water rights, the application of rules, and accountability for the system become disconnected from the ultimate goal of efficient and equitable water use. Scarcity becomes institutionalized when no single authority assumes responsibility for the entire system, from the source to the tap and discharge.

Infrastructure provides the second fault line. Networks that are old, leaking, or poorly maintained lose significant portions of treated water before it reaches users. Insufficient storage and transport capacity reduce flexibility during periods of variable supply, while the absence of integrated treatment and reuse systems locks cities into wasteful cycles. The result is not a shortage of water, but a shortage of usable water.

Economic and policy arrangements add a further layer of distortion. When water is priced below cost or provided freely to favored sectors, efficiency is discouraged and consumption rises without corresponding investment in renewal. Subsidies intended to promote development can instead entrench unsustainable demand. At the same time, the absence of incentives for conservation or recycling undermines long-term resilience. Structural scarcity is thus not only a failure of provision but also of valuation.

Yet scarcity is not merely the sum of inefficiencies. It is also the outcome of prioritization. Within every system of allocation, some uses and users are privileged over others, often according to political or economic interest rather than necessity or sustainability. Industrial and agricultural abstractions may be maintained while domestic or ecological flows are curtailed; urban centers may secure supply at the expense of surrounding regions. Decisions about who may use water, and for what purpose, convert what could be a manageable limitation into a condition of exclusion. In this sense, structural scarcity is a socially produced hierarchy of access, where abundance for some coexists with deprivation for others. Planning and demand management rarely neutralize these hierarchies. Rigid institutions and short planning horizons leave little room to adjust priorities as conditions change. Water systems designed to serve growth or production cannot easily be reoriented toward equity or conservation. As climate variability, urban expansion, and pollution add new pressures, the competition between users intensifies, and the hierarchy hardens.

Thus, structural scarcity is not the simple absence of water but the manifestation of how societies choose to value and distribute it. It arises from governance weakness, infrastructural decay, distorted incentives, inequitable pricing, and, most fundamentally, arbitrary prioritization among competing needs. Each decision about allocation defines who experiences abundance and who endures shortage. In this way, scarcity is continually recreated through policy itself: a political construction sustained by the very systems designed to prevent it.

A profound dilemma embedded in this structural failure remains the question of just pricing: How can we establish a water pricing structure that is efficient enough to fund the costs of production, treatment, delivery and infrastructure renewal, while simultaneously accounting for environmental degradation and depletion that remain externalized, yet is also just? Justice requires a pricing structure that distributes the true costs of water (economic, environmental, and social) across different activities and user groups, reflecting both capacity to pay and responsibility for impact.

Returning to the continuum

Viewed within the broader continuum of water scarcity, the structural form represents the final and most human stage of the process. Physical scarcity describes the natural boundary, the water that simply does not exist. Functional scarcity captures the temporal or spatial mismatch between what exists and when or where it is required. Structural scarcity arises when, despite sufficient physical and functional availability, the systems of governance, economy, and equity distort access and distribution. It is here that scarcity ceases to be an environmental condition and becomes a social one, a reflection of priorities rather than precipitation.

Text: Diana Dus