1st Edition

Water Trading and Global Water Scarcity International Experiences

Edited By Josefina Maestu Copyright 2013
    376 Pages 45 B/W Illustrations
    by Routledge

    374 Pages 45 B/W Illustrations
    by Routledge

    Water scarcity is an increasing problem in many parts of the world, yet conventional supply-side economics and management are insufficient to deal with it. In this book the role of water trading as an instrument of integrated water resources management is explored in depth. It is also shown to be an instrument for conflict resolution, where it may be necessary to reallocate water in the context of increasing scarcity. 

    Recent experiences of implementation in different river basins have shown their potential as instruments for improving allocation. These experiences, however, also show that there are implementation challenges and some limitations to trading that need to be considered. This book explores the various types of water trading formulas through the experience of using them in different parts of the world. The final result is varied because, in most cases, trading is conditioned by the legal and institutional framework in which the transactions are carried out. The role of government and the definition of water rights and licenses are critical for the success of water trading. 

    The book studies the institutional framework and how transactions have been undertaken, drawing some lessons on how trading can improve. It also analyses whether trading has really been a positive instrument to manage scarcity and improve water ecosystems and pollution emission problems in those parts of the world which are most affected. The book concludes by making policy proposals to improve the implementation of water trading.

    Introduction: Myths, Principles, and Issues in Water Trading 

    Ronald C. Griffin, Dannele E. Peck, and Josefina Maestu 

    Part 1: Water Trading Experiences 

    1. Introduction: How We Are Implementing Water Trading: Learning from Experience 

    Josefina Maestu 

    2. Managing Water Stress, Drought and Climate Change in The 21st Century: Water Trading as part of Integrated Approaches in Water Management 

    Cody L. Knutson 

    3. New Frontiers for Water Management. The California Experience 

    Ellen Hanak 

    4. Water Trades in the Western US: Risk, Speculation and Property Rights 

    Kristiana Hansen, Richard Howitt, and Jeffrey Williams 

    5. Water Markets and Their Environmental, Social and Economic Impact in Australia 

    Henning Bjorlund, Sarah Wheeler and Peter Rossini 

    6. Trading into and out of Trouble. Australian’s Water Allocation and Trading Experience 

    Mike Young 

    7. The Evolution of Water Markets in Chile 

    Guillermo Donoso 

    8. The Experience of Water Markets and the Market Model in Chile 

    Carl J. Bauer 

    9. Breaking the Gridlock in Water Reforms through Water Markets: Experience and Issues for India 

    Nirmal Mohanty, Shreekant Gupta 

    10. Areas of Conflict and the role of Water Trading: the case of Spain 

    Antonio Serrano 

    11. Voluntary Water Trading in Spain: a Mixed Approach of Public and Private Initiatives  

    Alberto Garrido, Josefina Maestu, Almudena Gomez-Ramos, Teodoro Estrela, Jesus Yague, Ricardo Segura, Javier Calatrava, Pedro Arrojo, Francisco Cubillo

    Part 2: Concerns About Water Trading And How Are We Dealing With Them 

    12. Introduction: Concerns about Water Trading  

    Carlos M. Gomez, Eduard Interwies, Stefan Görlitz 

    13. The Myth of Markets for Water 

    Joseph W. Dellapenna 

    14. Cash Flows: Markets for Environmental Flow Allocations 

    David Katz 

    15. Experiences with Water Quality Trading in the United States of America 

    Robert J. Rose 

    Part 3: Reforms to Overcome Legal and Institutional Barriers to Trading 

    16. Introduction: Considering Institutional frameworks and institutional reforms in trading   

    Carlos M. Gomez 

    17. Water and Development in Latina America: Rights, Markets, Economic Context and Institutional Requirements  

    Miguel Solanes 

    18. The Theory and Practice of Australian Institutional Reforms to Incorporate Water Markets in Integrated Water Resources Management 

    Jennifer Mc Kay 

    19. Legal reforms that facilitate trading of water use rights in Spain 

    Antonio Embid 

    20. Drought Management, Uncertainty and Option Contracts 

    Almudena Gomez-Ramos 

    Part 4: Can we get incentives right? 

    21. Introduction: Incentives and prices in water trading 

    Carlos M. Gomez 

    22. Models for Optimal Water Management and Conflict Resolution 

    Franklin M. Fisher 

    23. Optimization Modelling in Water Resource Systems and Markets 

    Jay R. Lund 

    Conclusions and Recommendations for Implementing Water Trading: How Water Trading can be Part of the Solution 

    Josefina Maestu and Almudena Gomez-Ramos 



    Josefina Maestu is Coordinator of the United Nations Office to Support the International Decade for Action "Water for Life" 2005-2015, based in Zaragoza, Spain. For 12 years she has been a lecturer on economics of natural resources management at the University of Alcala, Spain. 

    Pedro Arrojo, Carl J. Bauer, Henning Bjorlund, Javier Calatrava, Francisco Cubillo, Joseph W. Dellapenna, Guillermo Donoso, Antonio Embid, Teodoro Estrela, Franklin M. Fisher, Alberto Garrido, Carlos M. Gomez, Almudena Gomez-Ramos, Stefan Görlitz, Ronald C. Griffin, Shreekant Gupta, Ellen Hanak, Kristiana Hansen, Richard Howitt, Eduard Interwies, David Katz, Cody L. Knutson, Jay R. Lund, Jennifer Mc Kay, Nirmal Mohanty, Dannele E. Peck, Robert J. Rose, Peter Rossini, Ricardo Segura, Antonio Serrano, Miguel Solanes, Sarah Wheeler, Jeffrey Williams, Jesus Yague, and Mike Young.