WATER?!?  That's an even worse example than trees. Water is the most plentiful resource on the surface of the planet, and can't even be used up! It doesn't go away, unless we shuttle it off the earth. While clean water is indeed limited to some extent, it's merely a question of "at what price can I obtain clean water." If the government allowed markets to work instead of fixing prices, then as clean water was used the local price of that water would rise, and entrepreneurs would figure out ways to bring new clean water in to make a profit. Desalinization is a great example... roughly 95% of the UAE's water is directly from the ocean. They're in the middle of a desert and have plenty of water.

Water, of all things, is perhaps the most unlimited resource we have. Price is the only factor that's important.