Article

Designing water abstraction regimes for an ever-changing and ever-varying future

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Abstract

Most of the world's water entitlement and allocation regimes evolved during periods of abundance and, hence, are not well suited to the management of water scarcity. Development of the institutional arrangements necessary to manage changing demands and supplies is in its infancy. Design criteria for the development of a set of institutional arrangements for the robust management of scarce water resources is offered and then used to develop a generic framework for the allocation and use of water. Variations to account for differences in ground, regulated and unregulated water resources are offered. The question of how best to sequence reform of existing water entitlement and allocation regimes is also addressed. The result is a recommendation for the use of water sharing plans to determine how much water may be used at any point in time and an unbundled suite of arrangements that enable efficient but separated management of long term and short term considerations and, also, the control of externalities. System-wide adjustment is facilitated through the periodic revision of water sharing plans. Individual adjustment to changing circumstances is facilitated through trade in entitlements and allocations. Before the introduction of institutional arrangements that encourage adjustment through trade it is recommended that the abstraction regime used be converted into one that accounts for return flows and allocates water according to shareholder entitlement. Seniority, beneficial-use criteria and opportunities to third parties to prevent adjustment according to pre-specified rules should be repealed. Well-designed regimes can be extended to include dam-capacity shares and allow the use of market-based instruments in delivery of water-quality objectives. Pooling can be used to lower the costs of risk management.

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... Using Southeast Sulawesi as a case study, this paper searches for a suite of institutional arrangements that would increase the robustness of Indonesia's water allocation and management systems. Robustness is defined as the capacity of a system to respond well during periods of extreme pressure and, also, to evolve successfully as demands on the available water resource and its status change (Young, 2014). ...
... (Shepsle, 1989) defines long-lasting institutions as robust where operational rules are devised and modified over an extended period such that governance institutions persist. (Young, 2014) argues that robust institutions, typically, have a demonstrated capacity, under duress, to produce efficient, socially-acceptable outcomes. Often they are characterized by a rigid set of institutional arrangements and property right arrangements that are designed to enable rapid and often timely responses to changing supply and/or demand conditions (Young, 2019). ...
... Sustainable use requires appropriation and provision rules that are compatible with local social-economic and environmental conditions. Thus, the system's water allocation arrangements must be able to adapt to new or altered conditions in a manner that simultaneously maintains consistency with biophysical realities, is judged to be fair, and promotes socio-economic progress (Young, 2014). As a test, it should be possible to make changes to allocation arrangements without increasing conflicts and/or causing a decline in willingness to comply with operational rules. ...
Article
This study employs Ostrom’s Design Principles to examine the robustness of institutional arrangements employed by water user associations to manage access to water resources in Southeast Sulawesi Province, Indonesia. The outcome is a set of eight propositions which, if implemented, can be predicted to significantly improve water use in Indonesia. Emphasis is placed on the development of institutional arrangements that encourage and empower local action within an agreed system-wide framework so that communities can prosper as pressures and demands for water access increase—a requirement generally applicable to situations found in many other countries.
... This so-called 'rebound effect' can be particularly detrimental to environmental water uses (Loch & Adamson, 2015). A simple way to prevent such an effect is the periodic revision of the total amount of water available for consumptive use (Young, 2014). ...
... Examples of formal WMs functioning for a long time are relatively rare (Griffin, 2016). In most countries, water rights were conceived within previous contexts of relative abundance (Young, 2014) and there are costs associated with changing existing institutions and altering rights already granted. Still, more attention has been devoted to market mechanisms as water has become scarcer in some regions (Zetland, 2011a). ...
... Moreover, possible impacts of water trades on third parties or the environment are treated at the local level, when users apply for licenses to use water but outside of the titling and trading systems (Grafton & Horne, 2014). Not only do these effects tend to be small (Hanak, 2003) but this arrangement also prevents market transactions from becoming overly dependent on courts and the judicial system and deals more efficiently with local externalities (Young, 2014). ...
Article
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Markets for managing natural resources have existed for many decades and have gradually made their way into the mix of discourses on water policy. However, there are not many established water markets functioning worldwide and little understanding about how and why water markets emerge as allocating institutions. In order to understand the dynamics of the evolution of water markets, the experiences of selected cases with relatively mature water market systems were analyzed, namely: the Murray–Darling Basin in Australia; the Colorado-Big Thompson Project and the transfers between the Palo Verde and Metropolitan Water Districts in the USA; and Spain. We found that formal markets emerged in water scarcity situations where water rights already existed and were sometimes exchanged informally. Water markets have not always moved to reduce transaction costs, as some of those costs were necessary to achieve societal goals beyond economic efficiency. There is a significant difference between the idea of water markets as proposed by economic theory and actual practice in the water sector. As institutions, markets are humanly devised rules embedded in a social and political context and do not always lead to efficient or effective solutions for the management of resources.
... One suggested management regime would redefine existing groundwater rights as shares of an overall extraction total, rather than as fixed quantities, that would also be tradable between farmers within the valley (ECD 2015;Young 2015). This is similar to the rights structure that is used for management of surface water and some groundwater resources in Australia's Murray-Darling Basin (O'Keefe 2011; Connor and Kaczan 2013;Young 2014). ...
... Functioning formal markets exist in parts of the Murray-Darling Basin in Australia (O'Keefe 2011), and in many parts of the southwestern United States (e.g., Arizona and the Edwards Aquifer in Texas) (Debaere et al. 2014;Votteler 2011). The Australian markets see trade in both annual leases and permanent extraction rights, i.e., rights are unbundled (Young 2014-2013] of groundwater (both entitlements and allocations), or approximately 6% of total groundwater rights, were traded in New South Wales (NWC 2014). The Edwards Aquifer of Texas is managed with extraction restrictions to protect spring-dependent ecosystems (Howe 2002). ...
... Moregradual curtailment will cause the groundwater table to stabilize at a lower level, increasing potential agricultural revenue in the nearterm but increasing the pumping costs for remaining irrigators in the long term. This shares-based proposal has similarities with the water management system used in Australia's Murray-Darling Basin (Young 2014). ...
Article
This paper presents an ex ante analysis of a novel groundwater management reform being considered by irrigators in the Diamond Valley, Nevada. Groundwater extraction for irrigation in the valley has considerably exceeded the natural recharge rate since the 1960s. The area was recently declared a critical management area (CMA) by the State Engineer of Nevada, which will trigger curtailment of water rights unless other action halts unsustainable abstraction. We examined the likely impacts of a number of potential institutional structures that could be implemented as part of groundwater reform in the Diamond Valley. The major reform is a conversion from a priority-based curtailment of existing water rights to a shares-based system of gradually decreasing basinwide pumping allocations, an approach that offers some economic benefits to the region. The beneficial reforms, namely creation of a common market in which to trade rights and an ability to gradually, rather than suddenly, curtail rights, can be built into the existing priority-based rights structure. However, the conversion of rights to shares offers limited additional basinwide benefits, and mainly affects farmer profits through the redistribution of some profit from senior rights holders to junior rights holders. The redistributional nature of the institutional reform, paired with limited broader gains, may make it difficult to reach legal agreement regarding changes to established priority-based water rights institutions.
... The Tinbergen rule 3 states that each policy objective requires a specific instrument to have an effective policy mix. Young [7] develops this rule for agricultural water management and for the design of efficient administrative settings of water use and allocation. He suggests, among other rules, to "unbundle" policy objectives e.g. to distinguish historic/permanent entitlements and yearly/daily allocations of water. ...
... Although the current management scheme has been recognised as a step towards sustainable management, it has failed to 6 New wells have been constructed to replace the old ones. 7 See https://programme-eau-climat.eau-seine-normandie.fr/les-redevances-taux-et-modes-de-calcul and https://aides-redevances.eau-loirebretagne.fr/home/redevances/agriculture.html. ...
Article
Agricultural water management is becoming a critical issue in many parts of the world and cost-effective water policies are required to control water use. We examine the case study of irrigated agriculture in Beauce, France (9750 km2, Europe's largest cereal producing region). We explore the mechanisms for water abstraction control involving a combination of regulatory and economic instruments. The analysis is conducted with a hydro-economic model that includes a calibrated economic model and a semi-distributed calibrated hydrogeological model. First, we analyse the system currently used to manage groundwater abstraction. It includes a flexible quota system, revised annually as a function of the state of the groundwater, combined with a tax. This dual system performs better than a single instrument because of regional hydrogeological and economic specificities, as well as the fact that it limits costs for farming. We then investigate the impact of alternative combinations of instruments. Our findings show that the most cost-effective and robust way to improve the groundwater state is to increase the economic component (a flexible tax) in association with a flexible quota system.
... This could have at least two effects in limiting the socioeconomic impact of reducing total diversion: (i) more productive and efficient irrigators might buy water from less efficient irrigators and thereby increase overall agricultural efficiency and productivity and (ii) inefficient and unproductive irrigators could sell part, or all, of their allocated water and be compensated in the process (Bjornlund, 2004 ). Nevertheless , there are potential environmental impacts on groundwater and surface water systems that may occur from such a reallocation (Young, 2014). In some jurisdictions, such as Australia and the United States, attempts have already been made to introduce water sharing policies. ...
... This could have at least two effects in limiting the socioeconomic impact of reducing total diversion: (i) more productive and efficient irrigators might buy water from less efficient irrigators and thereby increase overall agricultural efficiency and productivity and (ii) inefficient and unproductive irrigators could sell part, or all, of their allocated water and be compensated in the process (Bjornlund, 2004). Nevertheless, there are potential environmental impacts on groundwater and surface water systems that may occur from such a reallocation (Young, 2014). ...
... Within the institutional context, it should first be noted that water rights must be clearly defined before implementing water banks. In fact, the creation of a centralized register of water entitlements exactly defining water allocations, use permits, etc., it is a strictly necessary condition for an adequate performance of any market mechanisms [70,71]. Particular important is water use priority, which can vary greatly among users and sectors and especially where prior appropriation rules exist, meaning that water users in the same basin can have different water rights. ...
Article
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In recent decades, the use of economic instruments has been promoted as a way to improve water demand management, required due to the difficulty of further supply increases. Against this backdrop, this paper analyses the potential of water banks as a type of water market that can provide institutional flexibility in the allocation of water resources among different users. Research has involved an extensive review of the literature, which has allowed us to identify different types of water banks that operate around the world, as well as an analysis of the experiences of water banks implemented to date, in order to assess the performance of this economic instrument in improving water management. This has provided evidence that water banks, if properly implemented, can be a useful tool for improving governance of water resources. Finally, the analysis has enabled us to propose a number of guidelines on how to improve the implementation of water banks in different countries around the world.
... For the projects of flood control and environmental protection with the nature of public goods, the state should direct give the funds for construction, and the state should encourage commercial financial institutions to provide long-term discount loans for the projects, such as irrigation and others with certain public welfare but insignificant economic benefits. For projects, such as those of hydropower and water supply with significantly comprehensive benefits, the state should provide interest-free policies during the construction period, but implement a long-term low interest loan policy after the completion of the projects and provide a preferential tax policy for project operation (Young 2014). ...
Article
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Because of the uneven temporal and spatial distribution of water resources, regional water resources shortages have become increasingly important in China. Therefore, how to effectively use water resources is one of the hottest issues China needs to address in the future. Although China’s central and local governments always attached great importance to the planning and management of water resources, for a long time, they were mainly focused on watershed management. However, because the geographical distribution of water resources in China is seriously imbalanced, watershed management cannot completely solve the problem of water resources shortage. This study shows that the key to solving such a problem is the implementation of inter-basin water management across the country or in larger areas, where there is an uneven distribution of water resources. This paper demonstrates that inter-basin water management has more advantages than basin water management only, as the allocation space of the water resources is greater, and there is greater regulation and water storage capacity. Because inter-basin water management provides an overall assessment of different basins, it may optimally transfer and save water resources. In seasonal flooding areas, inter-basin water storage will significantly improve the efficiency of water resources utilization. Therefore, China plans to optimally allocate the inter-basin water resources. At the same time, China should continue to build a good inter-basin compensation and management mechanism.
... Water trade can also improve water-user adaptability by making water allocation contingent to available resources in order to reduce welfare losses and provide a better response to droughts (Crase and Gawne 2011;Loch et al. 2012). An example of this is, replacing water licenses with shares that allow holders to use a proportion (instead of a fixed amount) of allotments in Australian water markets (Young 2014). Markets can further reallocate water-user risks, so that the vulnerability of wateruses exposed to scarcity and droughts is diminished, as was evident in Australia during the Millennium drought where perennial crops were kept alive by forgoing annual crop opportunities (Loch and Adamson 2015). ...
Article
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This paper presents a conceptual framework for both assessing the role of economic instruments, and reshaping them in order to enhance their contribution to the goals of managing water scarcity. Water management problems stem from the mismatch between a multitude of individual decisions, on the one hand, and the current and projected status of water resources on the other. Economics can provide valuable incentives that drive individual decisions, and can design efficient instruments to address water governance problems in a context of conflicting interests and relevant transaction costs. Yet, instruments such as water pricing or trading are mostly based on general principles of welfare economics that are not readily applicable to assets as complex as water. A flaw in welfare economic approaches lies in the presumption that economic instruments may be good or bad on their own (e.g., finding the “right” price). This vision changes radically when we focus on the problem, instead of the instrument. In this paper, we examine how economic instruments to achieve welfare-enhancing water resource outcomes can realize their full potential in basin-scale management contexts. We follow a political economy perspective that views conflicts between public and private interest as the main instrumental challenge of water management. Our analysis allows us to better understand the critical importance of economic instruments for reconciling individual actions towards collective ambitions of water efficiency, equity and sustainability with lessons for later-adopting jurisdictions. Rather than providing panaceas, the successful design and implementation of economic instruments as key river basin management arrangements involves high transaction costs, wide institutional changes and collective action at different levels.
... Proper accounting of water use and understanding of hydrological realities, as discussed in Chapter 3, is integral to the purposes of acquiring water for the environment. Young (2014) suggests six institutional principles when designing water markets: ...
Chapter
Internationally, water governance has covered three paradigms; state management, collective management and more recently, water markets. Effectively regulated and mature water markets can have dual benefits of increasing water-use efficiency and providing incentives for water conservation. When legislation allows for it, water markets also offer a unique mechanism to help rebalance fully allocated river basins by enabling water to be purchased for the environment. This chapter discusses how water markets can be used to return water to the environment and influence environmental watering objectives. To explore the progression and implementation of market based reallocation, we draw on three case studies; Australia’s Murray-Darling Basin, the Mexican reaches of the Colorado River, and the Western U.S. The chapter concludes with a discussion of the institutional, economic and social challenges of market based reallocation strategies. Overall, we show that environmental water markets, though challenging in design and implementation, have significant social and environmental value as a reallocation mechanism.
... The governmental and institutional constraints on the development of water policy and the role of the states and local communities in facilitating effective water governance [Kirchhoff and Dilling, 2016] need to be studied. There is a need to thoroughly explore water management strategies and reforms that have or have not been successful in other countries and couple these with economic policies [Young, 2014] to appropriately evaluate and reform water management, including the use of dams, in the United States. Decisions regarding the future of dams and water management, potential implementation of forecast-based management and financial risk management systems, and changes in the role of the private sector and water costs are imminent and will be disruptive and This article is protected by copyright. ...
Article
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Storage and controlled distribution of water have been key elements of a human strategy to overcome the space and time variability of water, which have been marked by catastrophic droughts and floods throughout the course of civilization. In the United States the peak of dam building occurred in the mid-20th century with knowledge limited to the scientific understanding and hydrologic records of the time. Ecological impacts were considered differently than current legislative and regulatory controls would potentially dictate. Additionally, future costs such as maintenance or removal beyond the economic design life were not fully considered. The converging risks associated with aging water storage infrastructure and uncertainty in climate in addition to the continuing need for water storage, flood protection, and hydropower result in a pressing need to address the state of dam infrastructure across the nation. Decisions regarding the future of dams in the United States may, in turn, influence regional water futures through groundwater outcomes, economic productivity, migration, and urban growth. We advocate for a comprehensive national water assessment and a formal analysis of the role dams play in our water future. We emphasize the urgent need for environmentally and economically sound strategies to integrate surface and groundwater storage infrastructure in local, regional, and national water planning considerations. A research agenda is proposed to assess dam failure impacts and the design, operation, and need for dams considering both paleo and future climate, utilization of groundwater resources, and the changing societal values towards the environment. This article is protected by copyright. All rights reserved.
... Water trading exists in the study area, with people paying money to access water for humans, stock and crops. However, water is a mobile resource, has to be given an economic value at source and by quantity (not just for access) and rights for extraction have to be as flexible as possible in order accommodate complex socio-ecological issues (Young (2014). ...
Article
The absence of formal institutions regulating water resources indicated a need to examine how informal governance works in semi-arid areas of the Lake Zone of Tanzania. Ostrom’s theory of common property resources was adapted to develop a questionnaire administered to 162 households using five different water sources (lake/dam, ponds near lake/dam, ponds, wells and waterholes) along with focus group discussions (6), key informant interviews (33) and field observations. The results indicated that communities do not have water management systems where water is abundant (lake/dam and ponds near these water sources). Conversely, where water is scarce (ponds, wells and water holes), communal water management occurs. However, such communal water governances are location specific and limited and, though they appear to function well at preventing water exhaustion, they fail to resolve the complex social dilemmas in that ecological system. Thus, most water resources are dominated by households with sound economic resource base, they take deliberate efforts to establish private wells in wetlands to intercept underground resources, raising issues of equity, contamination of underground water resources and human safety. Sandy river beds seemed to represent the worst ‘tragedy’ of unmanaged common resources, often being located in ‘no-man’s land’ between districts or regions, with uncontrolled competition resulting in enormous water holes dug by local resource users from both sides, and exhaustion by those with the deepest waterholes and access to engine-driven pumps. There are two water main crises: (1) too little is available to meet the current demand during an annual prolonged dry season (6-7 months) and (2) increasing social dilemmas on how to manage the little available. How external interventions could address these issues is discussed.
... Recent calls have been made to establish or reform groundwater policies to provide a holistic groundwater management strategy that considers the human demands on both surface water and groundwater (Castle et al., 2014;Grantham and Viers, 2014;Young, 2014). Such considerations are critical given observed prolonged drought conditions (Etienne et al., 2016), the use of groundwater to augment water resources, in addition to the changing demands for groundwater with the emergence of new sectors such as hydraulic fracturing (Freyman, 2014). ...
Article
Full-text available
Agricultural, industrial, and urban water use in the conterminous United States (CONUS) is highly dependent on groundwater that is largely drawn from nonsurficial wells (>30 m). We use a Demand-Sensitive Drought Index to examine the impacts of agricultural water needs, driven by low precipitation, high agricultural water demand, or a combination of both, on the temporal variability of depth to groundwater across the CONUS. We characterize the relationship between changes in groundwater levels, agricultural water deficits relative to precipitation during the growing season, and winter precipitation. We find that declines in groundwater levels in the High Plains aquifer and around the Mississippi River Valley are driven by groundwater withdrawals used to supplement agricultural water demands. Reductions in agricultural water demands for crops do not, however, lead to immediate recovery of groundwater levels due to the demand for groundwater in other sectors in regions such as Utah, Maryland, and Texas.
... The transition from price supports to direct payments tackles the problem of income stability in a more effective way (income instability is not only explained by prices, but also production volatility), while avoiding negative feedbacks on the environment. Ultimately, restoring the balance in over-exploited basins demands instruments specifically designed to reduce use; these can be complemented with others that then address distributive issues and compensate those who lose out (Young, 2014). ...
Article
Full-text available
A growing number of countries are reforming their water allocation regimes through the use of economic instruments. This article analyzes the performance of economic instruments in water allocation reforms compared against their original design objectives in five European countries: England, France, Italy, Spain and the Netherlands. We identify the strengths of, barriers to and unintended consequences of economic instruments in the varying socio-economic, legal, institutional and biophysical context in each case study area, and use this evidence to draw out underlying common guidelines and recommendations. These lessons will help improve the effectiveness of future reforms while supporting more efficient water resources allocation.
... Water resources management should go beyond the annual averages and consider the intra-annual flows. This is because streamflow seasonality is a key determinant of water availability (Hoekstra et al., 2012) particularly for an unregulated river like Mara (Young, 2014). The River Mara is only 395 km long from the source to its mouth in Lake Victoria. ...
Article
Land–use change is one of the main drivers of change of watershed hydrology. The effect of forestry related land–use changes (e.g. afforestation, deforestation, agroforestry) on water fluxes depends on climate, watershed characteristics and spatial scale. The Soil and Water Assessment Tool (SWAT) model was calibrated, validated and used to simulate the impact of agroforestry on the water balance in Mara River Basin (MRB) in East Africa. Model performance was assessed by Nash-Sutcliffe Efficiency (NSE) and Kling-Gupta Efficiency (KGE). The NSE (and KGE) values for calibration and validation were: 0.77 (0.88) and 0.74 (0.85) for the Nyangores sub-watershed, and 0.78 (0.89) and 0.79 (0.63) for the entire MRB. It was found that agroforestry in the watershed would generally reduce surface runoff, mainly due to enhanced infiltration. However, it would also increase evapotranspiration and consequently reduce the baseflow and the overall water yield, which was attributed to increased water use by trees. Spatial scale was found to have a significant effect on water balance; the impact of agroforestry was higher at the smaller headwater catchment (Nyangores) than for the larger watershed (entire MRB). However, the rate of change in water yield with increase in area under agroforestry was different for the two and could be attributed to the spatial variability of climate within MRB. Our results suggest that direct extrapolation of the findings from a small sub-catchment to a larger watershed may not always be accurate. These findings could guide watershed managers on the level of trade-offs to make between reduced water yields and other benefits (e.g. soil erosion control, improved soil productivity) offered by agroforestry. This article is protected by copyright. All rights reserved.
... Changes are afoot in Queensland to separate water rights from land titles and enable water trading as envisaged by the National Water Initiative (COAG, 2004). Water trading is seen by some as a step toward more effective and efficient regional-scale water management (Young, 2014). However, a functioning water trading system relies on the same regulatory foundations as the current system (Lockie, 2013). ...
... This paper addresses a specific issue that affects several of the interventions adopted to implement demand management: failure to assess water resources on a basin wide scale or across the complete water cycle (including the flow of surface water to ground water), leads to interventions that appear to "save" water locally while actually contributing to an increase in water consumption when assessed at the basin scale. In particular, local increases in irrigation efficiency bear no necessary relationship to impacts at the basin scale (Perry, 2007;Perry et al., 2009;Ward and Pulido-Velazquez, 2008;Adamson and Loch, 2014;Young, 2014) and local water "saving" measures, taken without considering the hydrologic connection between upstream and downstream or between surface and groundwater systems, may have unforeseen and perverse consequences. ...
Article
As the demand for water resources continues to grow, the current “demand management” approach often fails to deliver the expected results in terms of reduced water consumption, release of water to other uses, or improved environmental conditions. Recognizing that evapotranspiration (ET) represents the dominant consumptive use of water in the hydrologic cycle, this paper describes an approach to basin-scale water resources management based on ET. The ET management approach comprises four stages: (i) a basin-scale water consumption balance; (ii) determination of a target ET consistent with sustainable water consumption; (iii) identification of water consumption tradeoffs, competition and feedback among different water sectors (agricultural, industrial, domestic, and socio-environmental); and (iv) basin-wide monitoring of sustainable water consumption. Continuous, basin-wide ET data obtained from the ETWatch models are combined with estimates of water consumption as a result of mechanical, chemical, and biological energy to assess the water consumption balance, and set targets. On this basis, water resource managers can identify opportunities to achieve sustainable, productive use of water resources by (i) reducing non-beneficial ET; (ii) converting non-beneficial ET to beneficial ET; and (iii) increasing the productivity of beneficial ET. Irrigated agriculture is usually the largest controllable contribution to ET in a basin, so meeting the target ET for agriculture is key. A water balance analysis for Hai Basin and the implementation of ET management in the Basin are presented to illustrate the ET management approach.
... However, water markets have not been without controversy in Australia (e.g. see Young, 2013Young, , 2014. Community concerns have continually been raised about their economic, social and environmental impacts. ...
... The cost of this interference was the additional money directed towards irrigation infrastructure upgrades, and that it was easy to ignore the hydrological realities of reflows or the use characteristics of entitlements. Young [63] also advises of the need to design policy instruments with hydrological integrity and to ensure robustness of a system through proper accounting of water use. ...
... Authors [9] suggested the use of fuzzy logic to deal with impreciseness. Author [10] presents a framework that help policy maker for controlled and effective utilization of water resources. Authors [11,12] provides the way to reduce water theft that help the authorities to effective utilization of water resources. ...
Article
Water resources are essential for human being and nowadays polluted water jeopardies the human health. Toxic substances come from houses, industries and farm lands, dust mix with water causes water pollution. This pollution depreciates the quality of water and affects the human life. In this paper our objective is to evaluate and supervise the physicochemical quality of the ground water, for safety of human beings. The sample quality of 15 sites were used for measuring important parameters like pH, EC, Ca2+, Mg2+, Na+, K+, Cl−, SO42−, Also, NH4+ and NO3−, Fe2+ and HCO3−12 were considered for performance analysis. Soft computing component fuzzy logic system is used to design an intelligent system. The fuzzy logic system-based model measures groundwater quality status along with its sustainability. The results obtained from the model help the authorities, policy makers to plan proper policies for geochemical operation (water treatment process) and a foundation for observing the physicochemical quality of water in the area.
... While every country and catchment will have its unique set of challenges, we believe the approach to water markets within the MDB offers valuable lessons for water management (Turral et al., 2005;Young, 2014), especially in other countries and river basins that face the dilemma of trying to improve productive efficiency and agricultural value add from water use without compromising key riparian ecosystem services. The market 'experiment' in the MDB is not only important for Australia, but is of global significance as the Basin has become one of the world's largest water markets in terms of the annual market value of water traded . ...
... At this juncture, it will be useful to summarize our simulation results, and discuss their connections with, and implications for, water policy. Instruments for water policy can be loosely separated into three groups: those that address system-wide issues, those that define user's interests and those that manage the impacts and consequences of use (Young (2014)). Our market falls primarily into the second category, leaving aside the details of issues such as system operations and third-party externalities to focus on the fungibility of any existing and future entitlements. ...
... The transition from price supports to direct payments tackles the problem of income stability in a more effective way (income instability is not only explained by prices, but also production volatility), while avoiding negative feedbacks on the environment. Ultimately, restoring the balance in over-exploited basins demands instruments specifically designed to reduce use; these can be complemented with others that then address distributive issues and compensate those who lose out (Young, 2014). ...
Chapter
In this chapter we examine how water governance and demand management arrangements can be linked to economic instruments, such as water markets, to address the broad range of water reallocation problems that exist in many global contexts. The utilization of economic instruments is context-specific throughout the world and can take many forms. This chapter therefore lists the pros and cons of some more common instruments. While successfully combining regulatory and economic instruments is far from straightforward, policy-makers can learn from growing evidence of successful partnerships between these two approaches. It may be costly both in terms of political support and transaction investments to strip away existing arrangements in favour of more flexible and better-suited institutions to manage scarce water resources. However, it would be expected that ignoring the problems, and hoping they will resolve themselves, would be more harmful to private and public welfare outcomes in the long run.
... For example, establishing water markets in Australia activated many unused licences, and reduced the water left in the river. Secondly, enshrining property rights holds dangers if there is incomplete knowledge of riverine ecosystems and future environmental needs for water (Crase et al. 2004;Young 2014). Bauer (1997) argues that establishing markets in water resources is difficult. ...
Article
This chapter provides an overview of the issues and challenges facing policy makers intending to establish groundwater markets. It studies in detail two developed countries that have introduced groundwater trading and have some experience in its implementation—Australia and the United States of America— and draws out lessons from these countries that need to be considered for the development of groundwater markets around the world. The key lessons that this chapter stresses are: the importance of establishing institutions and regulations; investing in high quality economic and scientific research; that opportunities arise from crises; and that social concerns are not always the most important considerations to be aware of for efficient and effective groundwater markets.
... This approach is based on establishing an aggregate cap on water-resource abstraction, on allocating individual abstraction rights to users, and on making these rights tradable. The argument, reflecting standard economic theory, is that markets are more cost-effective than command-and-control regulation for reaching an optimal allocation of limited renewable stocks, and that they are more flexible for adapting to an ever-changing economic and environmental context (Young, 2014). The implementation of a system of tradable water rights was strongly supported by international financial institutions in the 1990s (World Bank, 1993;Thobani, 1997), and has been adopted and implemented in various developed and developing countries (Grafton et al., 2011;Easter and Huang, 2014). ...
Article
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We used a participatory foresight method for assessing if, and how, groundwater markets could be incorporated into local groundwater management policies. We propose an institutional setup adapted to the French water policy context, with a cap and trade scenario introducing groundwater markets in the agricultural sector between now and the 2035 horizon. Considering the local hydrogeological characteristics, we applied this method to five French groundwater basins, and then analyzed the public perception of our scenario by organizing 16 half-day workshops, involving a total of 44 institutional stakeholders and 80 farmers. Overall, almost half of the participants were opposed to the introduction of groundwater markets for various ethical, economic and technical reasons. Many of the preconditions for water trading are still far from being met, and major social and economic risks are anticipated. However, our results also suggest that there might be scope for developing groundwater markets compatible with French water policy at a local scale; the preconditions for this are that specific local hydrogeological and agricultural situations are taken into account, and that a participatory process is developed, involving institutional stakeholders and farmers. https://hal-brgm.archives-ouvertes.fr/hal-02302600v1
... This mainly involves further development of the 'Trade enabling mechanisms' in Step 3. This will include efforts to limit/reduce transaction costs, adapt to new information as it arises, and to scan for unanticipated externalities and opportunities for refined market products (for example, option contracts or water banks) (Wheeler et al., 2013;2014a;2014b). Such monitoring may, in turn, reveal additional changes to information sources or collection methods that then require legislative change, or new planning requirements/infrastructure projects to improve trade capacity (putting the planner back to review Step 1's 'Existing institutional, planning and property right arrangements'). ...
... Increased transparency in allocation, carryover and IVT rules may address some implementation issues, which we suggest may increase trust in water market institutions (Wheeler et al., 2017a;Wheeler et al., 2017b). Arguably, addressing water accounting issues, particularly around water use versus water extraction and consumption accounting (Young, 2014); water valuation and methodology issues (Seidl et al., 2019) and addressing issues in current water resource plans (Productivity Commission, 2018), could contribute to improved decision-making. Given the prevailing criticism of hydrological water accounting in the MDB (Walker, 2019;Williams and Grafton, 2019;Wheeler and Garrick, forthcoming), it seems unlikely that rule transparency can be forgone due to improved accounting. ...
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Water markets are well known for improving the efficient use and reallocation of water, and the southern-connected Murray-Darling Basin water market is recognised as the most advanced water market globally. In recent years, the market has matured considerably with new water ownership and trading strategies emerging, along with increased participation from non-landholders (i.e. environmental water holders and financial investors, such as pure traders and superannuation companies). This study draws on a quantitative survey of 1000 southern Basin irrigators plus qualitative interviews with 63 water experts from banks, environmental water holders, investors/agri-corporates, financial investors, property evaluators and water brokers to illustrate the different water ownership and trading strategies employed. Findings suggest that many stakeholders, including non-landholders, prefer to own most of their water needs in higher security water entitlements and use temporary trade to mitigate water supply shortfalls. However, some own no water entitlements (or land) at all, while financial investors and large agri-corporates are more likely to use/supply highly sophisticated temporary trading products, such as water forwards and parking contracts. In addition to the need to reinforce the fundamentals of water institutions in the Murray-Darling Basin (i.e. robust accounting of water extraction and use, and continual monitoring, compliance and enforcement of water extraction), we suggest three major reform areas: 1) data reform: improving the quality and availability of trade and water data plus standardised water market and water forwards terminology; 2) rules and regulation reform: increased transparency of trade and allocation/carry-over restrictions plus increased water market regulation and enforcement; and 3) new water market institutional development: a central exchange and clearing house.
... Reducing the time window of consumptive allocation validity could incorporate these circumstances, preventing overexploitation. River water can be diverted during periods of greater availability and temporarily stored for the next period, but water collection and storage systems would eventually require investments and additional costs [102]. ...
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Adaptive water management is a promising management paradigm for rivers that addresses the uncertainty of decision consequences. However, its implementation into current practice is still a challenge. An optimization assessment can be framed within the adaptive management cycle allowing the definition of environmental flows (e-flows) in a suitable format for decision making. In this study, we demonstrate its suitability to mediate the incorporation of e-flows into diversion management planning, fostering the realization of an adaptive management approach. We used the case study of the Pas River, Northern Spain, as the setting for the optimization of surface water diversion. We considered e-flow requirements for three key river biological groups to reflect conditions that promote ecological conservation. By drawing from hydrological scenarios (i.e., dry, normal, and wet), our assessment showed that the overall target water demand can be met, whereas the daily volume of water available for diversion was not constant throughout the year. These results suggest that current the decision making needs to consider the seasonal time frame as the reference temporal scale for objectives adjustment and monitoring. The approach can be transferred to other study areas and can inform decision makers that aim to engage with all the stages of the adaptive water management cycle.
... This issue will be compounded by the application of the "use-it or loose-it" rule, which will narrow the gap between average water extraction and the extraction caps, hence potentially making catchments more vulnerable to droughts. OUGCs will thus have to design rules to manage drought periods, possibly adapting IUCs to climatic and resource conditions at the beginning of the season, or defining IUCs as shares rather than nominal volumes (Young, 2014). The use of monthly or weekly use caps might be required, as practiced in some OUGCs already. ...
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Regulating water use in agriculture in water stressed basins is a challenging task. Recent scholarship emphasises the need to combine strong State oversight for achieving the collective extraction caps with considerable leeway to users to allocate water according to local priorities. This form of “co-management” between the State and users aims to improve the implementation of sustainable extraction limits. This model was adopted in France where agricultural user groups share water resources within a capped allocation pool enforced by the State. This paper evaluates whether the allocation rules developed by user groups improve environmental, economic and social performance. A detailed survey was carried out amongst the 54 agricultural user groups created across France. Results suggest that the reform has led to greater awareness amongst irrigators of their water resources and the slow emergence of collective action. Allocation rules have been developed, reflecting local economic and social priorities, as well as the temporal and spatial dynamics of local surface and groundwater resources. Although challenges remain, the research presented in this paper supports co-management to manage agricultural water extraction, and discusses institutional design features that can facilitate its implementation.
... Ostrom, 1990). Others have focused on guidelines for water markets and effective water resource management in general (Matthews, 2004;Grafton et al., 2011Grafton et al., , 2016Perry, 2013;Young, 2014;OECD, 2015;Wheeler et al., 2017). Given that water market trades can change the location, timing, and technical efficiency of water-use (Howe et al., 1986;Easter et al., 1999;Bauer, 2004), Wheeler et al. (2017) outline three institutional factors that need to be established before governments contemplate the creation of water markets, although the legal framework and level of decentralization will influence the specific types and sequences of reforms. ...
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This report is about the search for an economically efficient and equitable system of defining, allocating, and managing use of natural resources that proves to be robust. Robust in the sense that the fundamental principles and foundations upon which it is based remains unchanged over time. We focus on the notion of “interests” in natural resources, and obligations associated with use. We search for a generic robust approach to the definition of interests, rights and use obligations that sits comfortably within an economically efficient trading system. Pricing and charging issues and the question of how to convert from existing systems to the proposed one are left for subsequent reports.
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As the demand for water resources continues to grow, the current “demand management” approach often fails to deliver the expected results in terms of reduced water consumption, release of water to other uses, or improved environmental conditions. Recognizing that evapotranspiration (ET) represents the dominant consumptive use of water in the hydrologic cycle, this paper describes an approach to basin-scale water resources management based on ET. The ET management approach comprises four stages: (i) a basin-scale water consumption balance; (ii) determination of a target ET consistent with sustainable water consumption; (iii) identification of water consumption tradeoffs, competition and feedback among different water sectors (agricultural, industrial, domestic, and socio-environmental); and (iv) basin-wide monitoring of sustainable water consumption. Continuous, basin-wide ET data obtained from the ETWatch models are combined with estimates of water consumption as a result of mechanical, chemical, and biological energy to assess the water consumption balance, and set targets. On this basis, water resource managers can identify opportunities to achieve sustainable, productive use of water resources by (i) reducing non-beneficial ET; (ii) converting non-beneficial ET to beneficial ET; and (iii) increasing the productivity of beneficial ET. Irrigated agriculture is usually the largest controllable contribution to ET in a basin, so meeting the target ET for agriculture is key. A water balance analysis for Hai Basin and the implementation of ET management in the Basin are presented to illustrate the ET management approach.
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I. Introduction, 227. — II. The static system, 229. — III. The dynamic systems, 233. — IV. The crucial role of capital movements, 237. — V. Foreign exchange reserves, 242. — VI. Speculation, 246. — VII. Concluding remarks, 249. — Appendix, 251.
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The Problem to be ExaminedThe Reciprocal Nature of the ProblemThe Pricing System with Liability for DamageThe Pricing System with No Liability for DamageThe Problem Illustrated AnewThe Cost of Market Transactions Taken into AccountThe Legal Delimitation of Rights and the Economic Problem
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Cette étude traite des problèmes que pose la réalisation de la stabilité intérieure et de l'équilibre de la balance des paiements dans un pays qui estime inopportun de modifier le taux de change ou d'imposer des systèmes de contrôle des échanges. On suppose que la politique monétaire et la politique fiscale peuvent être utilisées indépendamment pour atteindre ces deux objectifs si les flux de capitaux sont sensibles à l'écart entre les taux d'intérêts, mais on aboutit à la conclusion que la manière dont les politiques sont assorties aux objectifs revêt une extrême importance. Plus précisément, il est prouvé que la politique monétaire doit être fondée sur les objectifs extérieurs, et la politique fiscale, sur les objectifs intérieurs, et que toute inobservance de cette règle peut aggraver le déséquilibre au-delà de ce qu'il était avant l'introduction de changements de politique. Cette théorie, lorsque les mesures de stabilisation ne comprennent que la politique monétaire et la politique fiscale, a pour conséquences pratiques qu'un pays excédentaire subissant une pression inflationniste doit alléger les conditions monétaires et augmenter les impôts (ou réduire les dépenses du Gouvernement), alors qu'un pays déficitaire souffrant du chomâge doit relever ses taux d'intérêt et abaisser les impôts (ou augmenter les dépenses du Gouvernement). L'explication de ce résultat peut être liée à le Principe de la Classification Effective des Marchés: les politiques doivent aller de pair avec les objectifs sur lesquels elles ont la plus forte influence relative. Si ce principe n'est pas appliqué, il se manifestera une tendance vers un mouvement indirect, voire un mouvement instable des variables. L'utilisation de la politique fiscale à des fins extérieures et de la politique monétaire en vue d'assurer la stabilité intérieure constitue une infraction à ce principe car l'effet du taux d'intérêt sur l'équilibre intérieur, par rapport à son effet sur la balance des paiements, est moindre que l'influence de la politique fiscale sur l'équilibre intérieur par rapport à son influence sur la balance des paiements. Pour des raisons analogues, la combinaison inverse de ces politiques préconisée dans les conditions restrictives indiquées ici, est compatible avec le principe. A un niveau encore plus général, on trouve le principe de Tinbergen, d'après lequel, pour atteindre un nombre donné d'objectifs, il faut au moins un nombre égal d'instruments. Le principe de Tinbergen s'attache à l'existence et à la determination d'une solution au système. Il ne prétend pas qu'une série donnée de mesures aboutira en fait à cette solution. Pour soutenir ceci, il y a lieu d'examiner de façon approfondie les caractères stabilisateurs du système dynamique proposé. Dans cette perspective, le Principe de la Classification Effective des Marchés accompagne nécessairement le principe de Tinbergen. /// En este estudio se trata de los problemas inherentes a la consecución de la estabilidad interna y del equilibrio de la balanza de pagos de un país que no considera oportuno modificar su tipo de cambio, o imponer controles al comercio. Se da por sentado que la política monetaria y la fiscal pueden usarse como instrumentos autónomos para lograr los dos objectivos, siempre que los movimientos de capital respondan a los márgenes diferenciales de las tasas de interés, pero se señala que es asunto de extrema importancia aparear la política con los objetivos. Se demuestra especialmente, que la política monetaria debe basarse en objetivos externos y, la fiscal, en objetivos internos y, que el descuido en seguir esta recomendación, puede empeorar aun más la situación de inestabilidad que existía antes de implantar cambios en la política. La conclusión práctica de la teoría es que cuando las medidas que se toman para lograr la estabilización se limitan a la política monetaria y a la fiscal, aquellos países con superávit, que atraviesan por un periodo de presión inflacionista, deben aflojar las condiciones monetarias y subir los impuestos (o reducir los gastos fiscales), mientras que un país deficitario, con problemas de desempleo, debe aumentar las tasas de interés y disminuir los impuestos (o incrementar los gastos fiscales). La explicación de este resultado puede relacionarse con el Principio de Clasificación Efectiva de Mercados: las políticas que se adopten deberán asimilarse a aquellos objetivos sobre los que ejercen una influencia relativamente mayor. Si no se siguiera este principio, existiría la tendencia hacia un movimiento indirecto y aun inestable de las variables. El empleo de la política fiscal para fines externos y, de la política monetaria, para la estabilidad interna, infringe este principio, porque el efecto de las tasas de interés en el equilibrio interno, comparado con el que ejercen sobre la balanza de pagos, es menor que el efecto de la política fiscal sobre el equilibrio interno, comparado con el que ejerce sobre la balanza de pagos. Por razones análogas, la combinación alternativa de estas políticas que se propone en las condiciones restrictivas aquí señaladas, armoniza con dicho principio. En un plano aún más amplio está el principio de Tinbergen, que para lograr un número dado de objetivos debe existir, al menos, un número igual de instrumentos. El principio de Tinbergen se relaciona con la existencia y ubicación de una solución al sistema; no mantiene que un conjunto dado de medidas de política habrá de conducir, de hecho, a dicha solución. Para hacer esta aseveración, es necesario investigar los atributos de estabilidad del sistema dinámico. Es por esta razón que el Principio de Clasificación Efectiva de Mercados debe necesariamente acompañar al principio de Tinbergen.
Article
When entitlements to access water in fully allocated river and aquifers are specified in a manner that is inconsistent with the ways that water arrives, flows across and flows through land, inefficient investment and water use is the result. Using Australia's Murray Darling Basin as an example, this paper attempts to reveal the adverse economic and water management consequences of entitlement and water sharing regime misspecification in regimes that allow water trading. Markets trade water products as specified. When entitlements and the water sharing system are not designed in a way that has hydrological integrity, the market trades the water management regime into trouble. Options for specification of entitlement and allocation regimes in ways that have hydrological integrity are presented. It is reasoned, that if entitlement and allocation regime are set up in ways that have hydrological integrity, the result should be a regime that can autonomously adjust to climatic shifts, changes in prices and changes in technology without compromising environmental objectives. Copyright 2009 The Authors. Journal compilation 2009 Australian Agricultural and Resource Economics Society Inc. and Blackwell Publishing Asia Pty Ltd.
Article
The attention being given to water resources by the Council of Australian Governments (COAG) and the Murray-Darling Basin Commission (MDBC) suggests that much Australian water use is inefficient. Australian may be the driest inhabited continent in the world, but from an economic perspective, the nation's water resources are abundant. In a thorough assessment of the role of water in the economy, there was little to suggest that water is a constraint upon opportunities for economic growth. Mismanagement not shortage is the issue. The focus of this article is on institutional arrangements for the efficient allocation and management of water. It offers a template for the development of a consistent water allocation system across Australia and a means to implement it. The search is for arrangements that are dynamically efficient, have low administrative costs, and are robust in an institutional sense.
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Water rights in China In: International Working Conference on Water Rights: Institutional Options for Improving Water Allocation Drought and structural adjustment
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Managing Change: Australian Structural Adjustment Lessons for Water Property Rights and Sustainable Irrigation: A Developing Country Perspective
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Timing water shares in W ¯ ad¯ ı Ban¯ ı Khar ¯ uB, sultanate of Oman
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