RT Journal Article
SR Electronic
T1 Water Markets, Licenses, and Conservation: Some Implications
JF Land Economics
JO Land Econ
FD University of Wisconsin Press
SP 145
OP 159
DO 10.3368/le.87.1.145
VO 87
IS 1
A1 Johannus Janmaat
YR 2011
UL http://le.uwpress.org/content/87/1/145.abstract
AB 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 licenses 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 license carrying charges pay for conservation purchases, creates a transfer from junior water users to senior water users. (JEL Q25, Q28)