ABSTRACT
Water trading essentially involves the voluntary exchange of rights or entitlements to use water (Hodgson, 2006; Grafton et al., 2010, 2011). To achieve the desired status of water bodies, quantitative constraints on abstraction must be set and converted into property rights over the use of water (Howe, 2000). There is therefore an overall cap on rights to use water. Water users can then trade these rights within the limits defined by the water authority. Water trading is different from water transfers despite implying the diversion of water, occasionally as part of major infrastructure projects.
