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Groundwater banking has been used for demand-oriented management of groundwater resources in semi-arid and arid regions. This paper aims to propose a new framework for seasonal groundwater banking. In this framework, crop production functions are used to estimate users' bid packages representing the price of each unit volume of water in each auction period. The bid packages, along with users' water rights, are considered inputs of an optimization model, which maximizes the profit of users participating in the groundwater bank. The main outputs of the optimization model are the volumes of exchange and storage of water, as well as the water price in the auction periods. The efficiency of the proposed framework has been evaluated by applying it to the Nough region in the Rafsanjan Plain, central Iran. An existing plan for inter-basin water transfer to this region is also considered in the water banking framework. The results illustrate that the total annual profit of all users after the establishment of the bank compared to the status quo has increased up to 43.8 %. The profit of the water-recipient basin has also increased more than 4 times compared to the existing condition. In addition, water banking with a water transfer system increases the economic productivity of water and crop production by 37.32 % and 22.41 %, respectively.

Market approaches to natural resource management have gained popularity over the last few decades. This study provides an encompassing analysis of the water market in the southern Murray‐Darling Basin (sMDB), Australia, in order to evaluate its performance and the importance of having various types of water rights traded in the market. We do so by investigating a set of market attributes, including price and price volatility, traded volume, number and the average size of transactions, and net import across a number of trading zones in the southern Murray‐Darling Basin. Our findings show that the price mechanism in the water market functions as intended, as the water prices signal the level of scarcity and reflect value that can be derived from water resources. Other factors like crop structure and institutional settings also play important roles in explaining differences in water market outcomes across the considered trading zones within the sMDB market. Overall, our findings document that water markets serve well their fundamental purpose in water resource management to allocate water toward its economically‐highest‐valued uses, and that various types of water rights traded in the market are meeting heterogenous needs of market participants in managing water supply and use. Key Points: This study examines a set of key market attributes of the water market in the southern Murray‐Darling Basin (sMDB), AustraliaThe sMDB water market is functioning well that market prices reflect the level of water scarcity and value derived from water resourcesVarious types of water market products traded in the sMDB water market are meeting heterogenous needs of market participants [ABSTRACT FROM AUTHOR]

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]

Groundwater banking has been used for demand-oriented management of groundwater resources in semi-arid and arid regions. This paper aims to propose a new framework for seasonal groundwater banking. In this framework, crop production functions are used to estimate users' bid packages representing the price of each unit volume of water in each auction period. The bid packages, along with users' water rights, are considered inputs of an optimization model, which maximizes the profit of users participating in the groundwater bank. The main outputs of the optimization model are the volumes of exchange and storage of water, as well as the water price in the auction periods. The efficiency of the proposed framework has been evaluated by applying it to the Nough region in the Rafsanjan Plain, central Iran. An existing plan for inter-basin water transfer to this region is also considered in the water banking framework. The results illustrate that the total annual profit of all users after the establishment of the bank compared to the status quo has increased up to 43.8 %. The profit of the water-recipient basin has also increased more than 4 times compared to the existing condition. In addition, water banking with a water transfer system increases the economic productivity of water and crop production by 37.32 % and 22.41 %, respectively. • Water banking is a demand-management mechanism for storing and exchanging water. • A new mechanism is presented for seasonal water banking in agricultural regions. • In the bank, water price is calculated based on the seasonal bid-packages. • The seasonal bid-packages are estimated using production functions of plants. • The efficiency of the methodology is shown through a real-world case study. [ABSTRACT FROM AUTHOR]

The subject of this paper is the international legal and political framework of the right to water and relevant regulations in the Republic of Serbia, and the focus is on the state's responsibility for water management in accordance with the realization of the common good. The starting point of the paper is the position that access to water is a human right and that water can be managed only by the state and exclusively in the general interest. The first part of the paper discusses the risks of marketization, privatization and commodification of water for the realization of the right to water and the protection of this vital natural and strategic resource. The second part summarizes the activities of the United Nations related to the recognition of the right to water as a basic human right and the obligations of states in this sense. The third part analyses the normative and strategic framework of the Republic of Serbia in this area from the perspective of the right to water and responsible state management. Deficiencies in terms of the compliance with international human rights standards and the risks that the current regulation can produce for the population, water resources and the state are pointed out. No effective instruments have been envisaged for the protection of water from pollution, nor against commodification and marketization, while the privatization of water and public companies in this area threatens the sovereignty of the state over its natural resources. The goal of the paper is to point out the importance of establishing national regulations that will ensure sovereign and responsible management of water resources and protection of the right to water.

Australia, and particularly the Murray–Darling Basin (MDB), has the most mature and adopted water markets globally. Water trading is an important policy tool to deal with water scarcity issues, demonstrating allocative, dynamic and productive efficiency benefits. At the same time, water markets have been controversial in Australia. Markets have been blamed for a range of issues, including claims of unsustainability, inequity, farm bankruptcy, farmer distress and farm exit. This study reviews the MDB water trade literature and finds little evidence to support such myths. Arguably, the biggest misconception is that critics do not separate water markets from the meta‐governance institutional structures that define them. Perceived water market failures are often due to governance issues – not water trade per se. This is not to say that market failure does not exist, it does, and indeed, there are also serious distributional issues that need addressing (e.g., water property entitlements for indigenous stakeholders). As such, water market design and governance need to adapt and evolve as problems arise and the market matures. However, in an era of increasing water scarcity, enabling water trade remains one of the most important instruments available to assist in water sharing, reallocation and farm adaptation to climate change. [ABSTRACT FROM AUTHOR]

Market intermediaries play a crucial role in stitching together necessary actors for effective systems of exchange. However, there is limited understanding of how intermediaries emerge, and contribute to, water market development. This article explains how the China Water Exchange, the country's first and only national-level water trading platform, was catalysed by a top-down imperative consistent with China's water governance reform path. It shows how its genesis, objectives and functions reflect the congruence of goals between its key actors, and their struggles and efforts to build trust. Our focus on interorganizational dynamics adds a new perspective to understanding water market intermediaries. [ABSTRACT FROM AUTHOR]

Cap-and-trade (C&T) policy has led to environmental benefits in some groundwater markets by restricting and economically reallocating water permits. However, top-down approaches for capping permits may face resistance from every affected stakeholder. This paper presents an efficient policy framework to improve the implementation of C&T policies in a real shared aquifer in Iran. To this end, groundwater permits for water-selling farms are capped through a bottom-up capping (BUC) policy. A policy analysis that employs static and dynamic bargaining techniques incorporates farms' utilities. Results reveal that the bargaining techniques propose more acceptable capping strategies than the top-down approach. The BUC policy analysis introduces the proposed strategy by dynamic bargaining as the tradable groundwater permits. The effects of irrigation water sales to the industry sector, evaluated using a cooperative game-based optimization model, show that with the fair reallocation of water trading benefits, the current net benefits of agriculture and industry sectors increase by 55 and 27%, respectively. Furthermore, farms reduce their groundwater withdrawals by 35% compared with the current mode. Therefore, the BUC policy for inter-sectoral groundwater trading under dynamic bargaining can lead to the sustainable use of limited groundwater resources by facilitating the capping strategies and improving the water permits productivity. HIGHLIGHTS Bottom-up capping (BUC) policy under bargaining techniques is presented to facilitate cap-and-trade policies in groundwater markets.; Policy analysis reveals that proposed capping strategies by the bottom-up approach are more acceptable than the command-and-control approach.; A cooperative game-based optimization model fairly reallocates water trading benefits among market participants.;

Although many studies have examined irrigators' water trading behaviour, little is known about how irrigators value their water, especially for their water entitlements (permanent water rights). This article's aim is to assess the determinants of irrigators' values for their water (i.e. price choices for selling and buying of water entitlements). Specifically, we focus on spatial determinants and how irrigators' price choices vary spatially. We used stated preferences data from an irrigator survey in the southern Murray-Darling Basin (MDB) in Australia at the end of the Millennium drought (2011). It was found that (spatial) influences affect the price choices of the selling and buying decision differently depending e.g. on irrigators' location in the southern MDB, i.e. with regards to rural areas, lower resource areas and the regional socio-economic index. Furthermore, irrigators' valued their water differently if they owned it compared to if they were going to own it, which may relate to the 'endowment effect'. [ABSTRACT FROM AUTHOR]

Water trading has been proposed as an effective mechanism for delivering economic benefits within environmental limits. It represents one possibility for applying a dynamic allocation framework within which environmental river flows can be monitored and improved to support ecological, cultural, aesthetical and recreational values. Based on international experience, requirements for the successful implementation of water trading are assessed in the Aotearoa-New Zealand context. It is concluded that, if the environment is recognised as a water user, water trading has potential to promote sustainable water use but is associated with significant set-up and ongoing costs. A co-governance policy framework for water trading has not been agreed by iwi/hapū and the Crown based on Te Tiriti o Waitangi (1840). The institutional capacity required for development and implementation of trading is currently lacking, and the roles that government agencies and iwi/hapū would play are unclear. Market operational requirements relating to collection, collation and communication of hydrological data are only partially in place. Finally, New Zealand's flashy hydrology is not conducive to seasonal water trading and smaller catchments may contain insufficient users to constitute a functioning market. Water trading should therefore not be viewed as an easily implementable solution for improved freshwater management. [ABSTRACT FROM AUTHOR]

In 2014, China officially carried out the pilot work of water trading. The changes in water quality and quantity in pilot and non-pilot areas created a quasi-experimental research environment for policy analysis. The analysis of the impact of water trading policies on the experimental fields of policies and systems can scientifically evaluate the effect of water trading policies and provide reference for the adjustment and improvement of relevant policies. It would further promote the optimization and development of the practice of water trading, which is more conducive to the perfection of the water trading theory with Chinese characteristics. Based on the literature on water trading policies, this study first summarized the impact mechanism of water trading policies on the use of regional water resources. The impact was mainly reflected in two aspects: water quality and quantity. Secondly, the synthetic control method was used to construct the policy effect analysis model. The water footprint was used to represent the water resource consumption in the region, the water quality in the region was measured by the discharge of wastewater and major pollutants in wastewater, and a coupled model of water quality and water quantity was built to calculate the evaluation factors. Last, the provinces with the most representative implementation of water trading policies in the Yellow River basin were selected as research objects to analyze the implementation effect in pilot areas by using the synthetic control method, and the robustness test was carried out. The results showed that after implementing the water trade policies in 2014, the situation of water quality and quality significantly improved in Gansu, Ningxia, and Inner Mongolia. However, due to the differences in the practice of water trading, regional economic development mode and policy implementation, the improvement of water quality and water quantity in the three provinces was also different. This research concluded that although the impact effect of water trading policies varied in different regions, the positive impact of policy implementation was beyond doubt. It is proposed that all provinces should actively learn from relevant experience and conduct practical exploration of water trading. [ABSTRACT FROM AUTHOR]

In this paper the author explores the topic of trading water on financial markets, which has resurfaced with the presentation of the NQH2O water index on the NASDAQ stock exchange in New York at the end of 2020. The paper poses 4 fundamental questions related to the topic of water and its trading on an regulated capital market, offering answers from two opposing groups’ viewpoints: market actors who see plentiful business benefits in trading futures contracts based on water as an underlying asset on the one hand, and those who see endangerment of the legal status of water in trading with such financial instruments, which could lead to adverse effects on the entire population of people on the other hand. The offered arguments from both sides show that there are no final answers on the posed questions, nor are there solutions for the problems that obviously exist in reality. Additionally, it is obvious that the level of understanding between these two groups is very low, with numerous reproaches from both sides. The purpose of this paper is to recognise the open questions and offer various, and sometimes opposing answers to them in order to initiate a further dialogue, with a purpose of a better future for all of us, because water is life.

Water markets are considered an excellent economic instrument for water management as they lead to a more efficient allocation and use of the resource. Their establishment and operation has been promoted due to the fact that the steadily increasing demand is creating water scarcity problems in many regions of the world and that existing management policies are proving ineffective in addressing modern challenges. This paper attempts to carry out a comprehensive review of water markets as an alternative method for water management by presenting their main characteristics as well as the international experience gained from their establishment in different regions of the world. For this purpose, a systematic review of the international literature in the Google Scholar and Scopus databases was carried out using specific criteria. In particular, 144 studies were found that met the search criteria set and finally 91 of them were selected as a source of information for the writing of this paper. The processing of these papers provided information on how water markets operate, their background, the advantages and disadvantages associated with their establishment and their adoption by countries with different characteristics. The main conclusions that emerge are that water markets on the one hand increase the economic efficiency of water by encouraging the movement of water quantities to users who are able to attribute to them high economic value and on the other hand that their establishment and operation are linked to neoliberal economic policies that are often criticised and at the same time raise issues of social justice and equal treatment of different users. [ABSTRACT FROM AUTHOR]

The southern Murray–Darling Basin of Australia has the world's largest and most sophisticated water markets. However, there has been little study on the drivers of permanent and temporary water market movements within local areas, or the substitution effects between groundwater and surface‐water extraction over time. This topic is important as it is often claimed that water market trade patterns (especially selling large amounts of permanent water) are associated with rural decline. This study uses random‐effects tobit panel models to investigate the association of regional and spatial socio‐economic characteristics with temporary and permanent southern Murray–Darling Basin water market trade, using a broker panel database at postcode level from 2010/11 to 2013/14. Overall, results suggest there is no statistical significant evidence that more disadvantaged communities sold larger amounts of permanent water. Permanent water selling was statistically more likely to be associated with other spatial and land productivity characteristics, while temporary water market trade volumes were more related to water scarcity factors. In addition, there was evidence to suggest a substitution effect between rural areas selling higher volumes of permanent water and using higher volumes of groundwater. [ABSTRACT FROM AUTHOR]

Water scarcity is a growing concern globally, in the United States, and in Texas. As Texans plan to meet this challenge, it is important to introduce new tools to help mitigate water shortages. Market mechanisms have historically provided methods to increase the allocative efficiency of scarce resources, though applying these mechanisms to facilitate water trading is not widespread. Cash markets have successfully been implemented under the Watermaster in the Rio Grande Valley, but the use of water markets is not prevalent throughout Texas. In addition to cash transactions for water, the ability to effectively price water options would allow an additional market-based product to facilitate more flexible transactions. As people from municipalities, agricultural interests, industry, environmental interests, and other groups look for adaptable methods to offset uncertainty surrounding future water needs and supplies, water options would be useful. This paper establishes a method to price water options on agricultural water and applies that method to a cash crop in Texas. Market mechanisms will not be a panacea for water woes, but they are an important and effective tool for helping planners deal with increasing demand amid uncertain supplies. [ABSTRACT FROM AUTHOR]

• State control and marketisation in Chinese water governance are complementary rather than contradictory. • China's water reform mirrors its overall economic reform taking an experimental approach. • The state/market dichotomisation has little power to explain complexity of water governance. • Attention to the 'both-and' hybridisation helps better understand the roles of state and market in water governance. • Hybridisation of water governance takes diverse forms shaped by their particular political economies. State/market interactions in water governance have long been interpreted in terms of the contradiction between water as a commons and water as a commodity. Recent challenges to this dichotomisation claim that it cannot provide a useful lens through which to interpret the complexity of water resources and their management. This paper provides evidence from China to show that a dichotomous interpretation of state/market interactions has little power to explain the formulation and evolution of water governance regimes. Through an analysis of China's water policy development over the 1998–2018 period, the paper outlines how state control and marketisation are complementary rather than contradictory, collectively contributing to a governance regime that serves broader political and economic goals as much as water management ones. We argue that better understanding of the roles of state and market in water governance requires moving beyond an 'either-or' point of departure, and paying greater attention to the 'both-and' hybridisation increasingly observed in water management. [ABSTRACT FROM AUTHOR]

The way to calculate and share the total amount of ecological compensation for inter-basin water transfer project is directly related to the enthusiasm of the water-receiving area in participating in the ecological protection of the water source area. This paper takes the water source area of the South-to- North Water Diversion Project and the water-receiving areas of Beijing, Tianjin, Hebei and Henan as the research objects, and using the single-index method, the comprehensive index method and the deviation method to make appropriate calculation for the ecological compensation amount of 6.248 billion yuan paid to the water source area each year by the water receiving area. The results show that the method of deviation is more objective, comprehensive and reasonable, which can provide a new idea for the ecological compensation apportion calculation of the Central Line of South-to-North Water Diversion Project. [ABSTRACT FROM AUTHOR]

What hurdles lie in the path of the Chinese government's plan to introduce water trading? This question is addressed by reviewing lessons from establishing water markets in Australia, and then assessing an early scheme to create them in China. In Australia, markets in water opened up over several decades, with gradual recognition of what was needed to avoid negative third-party effects. Trading there is now crucial: in drought years nearly half the water used by farmers is traded. Australia's experience throws light on the key requirements for a water market – though markets in China will, naturally, be fashioned to suit its own conditions. The pilot work by Tsinghua University in Gansu Province has led the way in having trading at the local level in China. Compared with Australia, however, rights are not as tradeable, metering is poor, and plots are tiny. Trading has mostly been by water user associations, made up of several hundred farmers, but this dampens the incentives that make markets effective – and can upset individual farmers. Possible ways past these hurdles are discussed. [ABSTRACT FROM AUTHOR]

Recent droughts in the western United States have encouraged the growth of spot markets for water trading in states like California, which witnessed $95 million worth of water exchanged through these transfers during 2009. This article uses water transaction data from Water Strategist Monthly to investigate the effect of droughts on the volume of water transferred in four western states. A statistically significant effect of drought intensity on the volume and price of water is seen. Multiyear leases and sales have a larger effect than annual leases on the amount of water transferred annually. [ABSTRACT FROM AUTHOR]

The Segura basin in south-eastern Spain is one of the most water-scarce regions in Europe. Its water economy has characteristics that constitute very favourable conditions for water market activity, and there are significant trading opportunities. However, the traded volumes have been rather small even though most of the water market activity in continental Spain is concentrated there. This paper describes the few formal water market experiences in the Segura basin since water trading was legislated on and regulated in 1999. As a result of this analysis, some hypotheses are made regarding the causes of the limited operation of this economic instrument. [ABSTRACT FROM AUTHOR]

Victoria is the earliest state to establish water rights system in Australia, in which water markets have been fully developed in last three decades. China is currently in the period of deepening its reform of water rights, the advanced Victorian experiences could provide significant guidance for water rights reform and water markets growth in China, which ultimately allows markets to play a critical role in water resources reallocation. This paper analyzed the water rights system in Victoria from the aspects of water legal system, water administration, water rights allocation and types, as well as water registration and water markets, and put forward recommendations for China’s water rights reform. The results show that, in order to enhance the sustainability of water use and socioeconomic development, China should further promote research on water trading laws and regulations, establish water property rights, use water price leverage to stimulate market vitality, and rearrange the functions between government and market. [ABSTRACT FROM AUTHOR]