Double trouble: the importance of accounting for and defining water entitlements consistent with hydrological realities* |
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Authors: | Michael D Young Jim C McColl |
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Institution: | 1. Water Economics and Management, University of Adelaide, Adelaide, South Australia 5005, Australia;2. CSIRO Land and Water, Glen Osmond, South Australia 5064, Australia;3. Prof. Mike Young (email: ) is a Research Chair in Water Economics and Management, University of Adelaide, Adelaide, South Australia 5005, Australia. Jim McColl is a Research Fellow in CSIRO Land and Water, Glen Osmond, South Australia 5064, Australia. |
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Abstract: | 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. |
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Keywords: | hydrological integrity interception water accounting water markets water rights water trading |
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