The Evolution of Markets for Water

The Evolution of Markets for Water

Theory and Practice in Australia

New Horizons in Environmental Economics series

Edited by Jeff Bennett

This book presents a detailed picture of the evolutionary processes at work in water markets with a particular focus on theory and practice in Australia. Policymakers are striving to strike a balance between the pros and cons of a property rights/market based approach to the allocation of water resources, as opposed to an approach that centres on government regulation. The current movement in Australia is toward the use of markets, and numerous reforms are either underway or under consideration in that direction. This provides an ideal opportunity to observe the factors at play in determining the balance and hence the mix of policy instruments at work. The distinguished contributors offer a range of perspectives – economic, legal, environmental – and combine conceptual analysis with evidence from real policy decisions.

Chapter 6: Registration of Water Titles: Key Issues in Developing Systems to Underpin Market Development

Michael Woolston

Subjects: business and management, management and sustainability, development studies, agricultural economics, economics and finance, agricultural economics, environmental economics, environment, agricultural economics, ecological economics, environmental economics, environmental management, water

Extract

Michael Woolston INTRODUCTION Over the last two decades in Australia there has been significant progress towards the development of active markets for water as key instruments in achieving the more efficient and sustainable use of our limited water resources. In order to enable markets to deliver their full potential benefits, however, it has increasingly been recognised that there was a need for more clearly defined and secure property rights for water users whilst providing for adaptive management of the environment. It has also become apparent that the separation of water from land titles – while an essential initiative required to unleash value from water trading – entailed a range of financial, legal and related issues that were perhaps not fully anticipated at the time the Council of Australian Governments (COAG) water reforms were introduced. This chapter1 provides an overview of the development of water markets in Australia through the conversion of water licences to tradeable property rights or water entitlements. It then examines some of the key issues to be addressed in developing the new titling systems needed to support the security of and trading in these water entitlements. Finally, the chapter outlines current and future policy directions being adopted by governments in Australia for the registration of water titles. THE EVOLUTION OF WATER TRADING State Control over Allocation of Water The first water laws in Australia were based on English common law that gave rights to use water in streams and rivers to the adjacent (riparian) landholders. 76 Registration of Water...

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