Water Markets & Tradable Permits

Sopheak & Huy

Our Focus Water Markets & Transferable

Permits Water Auctions Tradable Pollution Permits Lessons Learnt

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Water Markets & Transferable Permits (1) Water markets & transferable water

rights: Sales of water allocations Applications: Surface or ground water;

seasonal or permanent rights transferring

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Water Markets & Transferable Permits (2) Functions:

Water transferred from lower- to higher-value uses

Making the strong property rights of existing holders approachable

A cheaper way for communities/farmers to obtain water

Used by environmental champions4

Water Auctions Public authorities: Water available to

the highest bidders at public auctions

Water lots: Daily, weekly, seasonal or annual basis

Auctions: Useful VS Conflicts of Interest

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Trade Pollution Permits (1) Individual polluters: Buy and sell quotas

of emission Conditions for successful water markets

and auctions:A clear and permissive legal frameworkA procedure for considering the impacts of these trades on the 3rd parties (compensation)

Recognition of the potential environmental impact of trades and solutions

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Trade Pollution Permits (2)Physical means of transferring waters b/w potential users

Strong provision by Government for effective market operation

Regulation to avoid monopoly

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Lessons Learnt (1)Charging systems: Vulnerable groups protected

Mechanism for initial allocation of rights: Fair, equitable, and effective

Efficient and effective auctions in some situations ($ vs water allocation)

Administrative costs may outweigh benefits => Make the trading systems less complicate

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Lessons Learnt (2)Markets: High value use & assist conflict resolution

Water auctions: Grant permission water allocation under competitive conditions but must prevent monopoly

Markets = Democratic system

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The End!

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