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This article discusses 2 ideas for reforming abstraction of water from the natural environment in order to provide a balance between environmental protection and secure, sustainable access to water also for future generations. This matters in light of an increased risk of water scarcity and drought due to growth and a changing climate. The first of these ideas – a sliding scale of legal protection for abstractions seeks to match the strength of legal protection through the abstraction licence to how much water is abstracted, as well as to how critical to business use, and environmentally beneficial the abstraction is. The second idea – 'bubble licensing' – involves capping the amount of water available for abstraction in a catchment and to promote exchanges of water between abstractors, not just through trading, but also through reciprocity exchanges and bartering. This collective action approach is intended to transcend an individual fixed entitlement approach to abstracting water. The article develops its argument through an analysis of literature on water rights, pollution trading, water charges, as well as a reference to ongoing reform debates about abstraction licensing in England. [ABSTRACT FROM AUTHOR]

It is widely recognised that the current abstraction licensing system in England needs to be reformed to meet the challenges of future environmental flow requirements, likely increases in water demands and climate change. The UK Government has committed to the reform of the abstraction regime in England and work is underway, including the Welsh Government, to assess the impacts of different reform options, working closely with stakeholders. International experience reveals that the complexity of water management at a national level lends itself to common principles but ultimately that local solutions are required at a catchment-level to manage such challenges. Historically the number of abstraction licences traded in England is negligible. In the future the trading of abstraction licences and derivative water rights, for example water quotas, could play a key role in improving water use efficiency. This paper describes research that was carried out to add to this evidence base in the Upper Ouse and Bedford Ouse catchment in East Anglia with a number of stakeholders to document their response to two innovative water trading systems which have been termed 'improved pair-wise' trading and the 'common pool' approach. Improved pair-wise trading would allow for a hierarchy of types of short-term abstraction licence trades. Some trades between specific points in a catchment might be pre-approved if the risks to the environment were deemed acceptable. The common pool approach is based on the trading of water quotas, using 'smart market' methods, which enable economic optimisation of market outcomes based on abstractors' bids subject to realistic hydrological constraints. This method would allow all abstractors to bid into a common pool on a weekly basis to obtain their water. Both methods were demonstrated via two workshops to investigate the barriers and facilitators to water trading in practice. Participants were cautiously interested in the benefits offered by both methods, especially the ability to trade water at short notice. However, for these trading methods to play a key role in the reform of abstraction licensing the abstractors must have sufficient confidence that the underlying methods are sufficiently equitable, reliable and accurate. [ABSTRACT FROM AUTHOR]