The role of water markets in helping irrigators adapt to water scarcity in the Murray-Darling Basin, Australia

2014 ◽  
pp. 166-174
Author(s):  
Sarah Ann Wheeler ◽  
Adam Loch ◽  
Jane Edwards
Keyword(s):  
Water Scarcity ◽  
Water Markets ◽  
Murray Darling Basin

scholarly journals Production choices with water markets and risk aversion: the role of initial allocations and forward trading

2018 ◽  
Vol 46 (4) ◽  
pp. 579-608 ◽  
Author(s):  
Philippe Bontems ◽  
Céline Nauges
Keyword(s):  
Irrigation Water ◽  
Weather Conditions ◽  
Water Markets ◽  
Initial Water ◽  
Production Risk ◽  
Net Returns ◽  
Murray Darling Basin ◽  
Forward Trading ◽  
Allocation Decisions

Abstract We develop a theoretical model that describes risk-averse farmers’ decisions when facing production risk due to uncertain weather conditions and when irrigation water can be traded on a market. We focus on the role of initial water allocations granted to irrigated farms at the start of the season. The presence of water markets makes the future water price uncertain and hence the value of initial water allocations uncertain. We analyse the properties of this background risk and study how initial water allocations impact farmers’ land allocation decisions between an irrigated crop and a non-irrigated crop, both characterised by random expected net returns. We then extend the model by permitting irrigation water to be traded ex-ante at a known price (forward market). Finally, we illustrate our main theoretical findings using simulations. We calibrate distributions of the random variables based on observed data from the Murray–Darling Basin in Australia where a water market has been in place for several decades.

scholarly journals An Overview of Water Markets in Southern Africa: An Option for Water Management in Times of Scarcity

Water ◽  
2019 ◽  
Vol 11 (5) ◽  
pp. 1006 ◽  
Author(s):  
Greenwell Matchaya ◽  
Luxon Nhamo ◽  
Sibusiso Nhlengethwa ◽  
Charles Nhemachena
Keyword(s):  
Climate Change ◽  
Water Management ◽  
Water Resources ◽  
Southern Africa ◽  
Water Scarcity ◽  
Imperfect Competition ◽  
Water Markets ◽  
Water Transfers ◽  
The Impact

Southern Africa faces acute water scarcity challenges due to drought recurrence, degradation of surface water resources, and the increasing demand of water from agriculture, which has to meet the growing food demands of an increasing population. These stressors require innovative solutions that ensure the sustainability of water resources, without which the consequences could be dire for a region exposed to a host of vulnerabilities, including climate change. This review outlines the role of water markets in water management in times of water scarcity, highlighting the drivers of water markets in southern Africa, such as water scarcity, transboundary nature of water resources, and their uneven distribution. The review further discusses the role of water markets in climate change adaptation. Related institutional and legal frameworks as well as water allocation mechanisms are explored, aiming at improving water markets governance. The impact of adaptation to new water regimes in the face of scarcity are assessed by considering characteristics of current markets as related to future opportunities. In a diverse region such as southern Africa with unevenly distributed water resources, advancing the concept of water markets could play an important role in mitigating water scarcity challenges and promoting regional integration through coordinated transboundary water transfers. The emergence of water markets in the region is influenced by the continued depletion of water resources, which is resulting in the adoption of innovative water marketing strategies, such as inter-farm sharing or farm joint venture systems and inter-basin and intra-basin water transfers. As the concept is new in the region, it still has challenges that include general market inefficiencies, high transaction costs, market information asymmetries, imperfect competition, and weak or absent robust institutional frameworks that can facilitate market development.

Improving water markets in Spain: Lesson-drawing from the Murray-Darling Basin in Australia

2022 ◽  
Vol 259 ◽  
pp. 107224
Author(s):  
Sara Palomo-Hierro ◽  
Adam Loch ◽  
C. Dionisio Pérez-Blanco
Keyword(s):  
Water Markets ◽  
Murray Darling Basin ◽  
Lesson Drawing

Water markets in France: appropriate water scarcity management mechanisms?

Water Markets ◽  
2021 ◽  
pp. 142-159
Author(s):  
Simon de Bonviller ◽  
Arnaud de Bonviller
Keyword(s):  
Water Scarcity ◽  
Water Markets

Emerging Issues and Challenges in Transboundary Freshwater: The Role of Treaties and Treaty Design

2020 ◽  
Author(s):  
Shlomi Dinar
Keyword(s):  
Water Resources ◽  
Water Scarcity ◽  
National Development ◽  
International Agreements ◽  
Political Conflict ◽  
Conflict And Cooperation ◽  
Emerging Issues ◽  
State Cooperation ◽  
Inter State

Freshwater’s transboundary nature (in the form of rivers, lakes, and underground aquifers) means that it ties countries (or riparians) in a web of interdependence. Combined with water scarcity and increased water variability, and the sheer necessity of water for survival and national development, these interdependencies may often lead to conflict. While such conflict is rarely violent in nature, political conflict over water is quite common as states diverge over how to share water or whether to develop a joint river for hydropower, say, or to use the water for agriculture. For the same reasons that water may be a source of conflict, it is also a source of cooperation. In fact, if the number of documented international agreements over shared water resources is any indication, then water’s cooperative history is a rich one. As the most important and accepted tools for formalizing inter-state cooperation, treaties have become the focus of research and analysis. While treaties do not necessarily guarantee cooperation, they do provide states with a platform for dealing with conflict as well as the means to create benefits for sustained cooperation. This also suggests that the way treaties are designed—in other words, what mechanisms and instruments are included in the agreement—is likewise relevant to analyzing conflict and cooperation.

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