WEAI/AERE 2009 - Individual Paper Abstract
Title: Water Markets, Licences, and Conservation: Some Implications
Author(s): John Janmaat, Barber School of Arts and Sciences, UBC Okanagan
Abstract: While water markets have long been advocated as a tool for both enhancing water use efficiency and enabling conservation purchases, their interaction with water rights and licences has been little studied. It is shown that when water rights are not tradable, using spot markets to secure conservation needs may harm some water users. Ironically, while a spot market enhances the efficiency of water use, it may also increase the cost of conservation purchases. Further, a self-funding conservation program, where volumetric licence carrying charges pay for conservation purchases, may have a nonlinear relationship between the target conservation quantity and the licence carrying charge. Such a program is also likely to benefit senior water users more than junior users.