How can reduced precipitation lead to limited water availability?
Less precipitation (which is the condensation of atmospheric water vapour) in an area = Less water in area.
This is because precipitation is the largest mover of water in the water cycle. Precipitation can take the form of rain, snow, sleet, hail, drizzle, (you get it) and all of this is water.
Less precipitation (usually on land), means less water and so therefore there is less water to go round and meet our needs and environmental needs means (surprisingly) there is a LIMITED WATER AVAILABILITY, which translates well as meaning there is not enough water for our needs.
Hope this helps!