Treating water markets like stock markets: Key water market reform lessons in the Murray-Darling Basin

2020 ◽  
Vol 581 ◽  
pp. 124399 ◽  
Author(s):  
Constantin Seidl ◽  
Sarah Ann Wheeler ◽  
Alec Zuo
Keyword(s):  
Stock Markets ◽  
Market Reform ◽  
Water Markets ◽  
Water Market ◽  
Murray Darling Basin

scholarly journals Understanding the emergence of water market institutions: learning from functioning water markets in three countries

Water Policy ◽  
2018 ◽  
Vol 20 (6) ◽  
pp. 1075-1091 ◽  
Author(s):  
Gustavo Velloso Breviglieri ◽  
Guarany Ipê do Sol Osório ◽  
Jose A. Puppim de Oliveira
Keyword(s):  
Economic Theory ◽  
Water Policy ◽  
Water Rights ◽  
Water Markets ◽  
Water Market ◽  
Market Institutions ◽  
Murray Darling Basin ◽  
Significant Difference ◽  
Management Of Resources ◽  
The Usa

AbstractMarkets 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.

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

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 Removing barriers to facilitate efficient water markets in the Murray-Darling Basin of Australia

2009 ◽  
Vol 96 (11) ◽  
pp. 1641-1651 ◽  
Author(s):  
M. Ejaz Qureshi ◽  
Tian Shi ◽  
Sumaira E. Qureshi ◽  
Wendy Proctor
Keyword(s):  
Water Markets ◽  
Murray Darling Basin

A Comparative Assessment of Water Markets: Insights from the Murray-Darling Basin of Australia and the Western US

2011 ◽  
Author(s):  
Gary D. Libecap ◽  
R. Quentin Grafton ◽  
Eric C. Edwards ◽  
R. J. O'Brien ◽  
Clay Landry
Keyword(s):  
Comparative Assessment ◽  
Water Markets ◽  
Murray Darling Basin ◽  
Western Us

Overcoming third party effects from water trading in the Murray–Darling Basin

Water Policy ◽  
2006 ◽  
Vol 8 (1) ◽  
pp. 69-80 ◽  
Author(s):  
Teri Etchells ◽  
Hector M. Malano ◽  
Thomas A. McMahon
Keyword(s):  
Water Quality ◽  
Exchange Rates ◽  
Water Use ◽  
Third Party ◽  
Water Markets ◽  
Policy Makers ◽  
Water Trading ◽  
Murray Darling Basin ◽  
Delivery Reliability ◽  
Will Force

Water markets have great potential to increase the efficiency of water use. However, the very process of transferring a water entitlement can result in third party effects. Specifically, there are three types of impact that can affect the entitlements of third party irrigators: volumetric reliability, delivery reliability and water quality effects. In each case, policy makers must decide whether they will try to prevent the impacts and whether they will force traders to internalise third party effects. Potential strategies range from non-interventionist options, such as restricting trade, to market interventions, such as exchange rates, which adjust traded entitlements to account for volumetric externalities.

scholarly journals Water Markets: Australia's Murray-Darling Basin and the US Southwest

2010 ◽  
Author(s):  
R. Quentin Grafton ◽  
Clay Landry ◽  
Gary Libecap ◽  
Robert O'Brien
Keyword(s):  
Water Markets ◽  
Us Southwest ◽  
Murray Darling Basin ◽  
The Us
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