Water scarcity is an increasing problem in many parts of the world, yet conventional supply-side economics and management are insufficient to deal with it. In this book the role of water trading as an instrument of integrated water resources management is explored in depth. It is also shown to be an instrument for conflict resolution, where it may be necessary to reallocate water in the context of increasing scarcity. 

Recent experiences of implementation in different river basins have shown their potential as instruments for improving allocation. These experiences, however, also show that there are implementation challenges and some limitations to trading that need to be considered. This book explores the various types of water trading formulas through the experience of using them in different parts of the world. The final result is varied because, in most cases, trading is conditioned by the legal and institutional framework in which the transactions are carried out. The role of government and the definition of water rights and licenses are critical for the success of water trading. 

The book studies the institutional framework and how transactions have been undertaken, drawing some lessons on how trading can improve. It also analyses whether trading has really been a positive instrument to manage scarcity and improve water ecosystems and pollution emission problems in those parts of the world which are most affected. The book concludes by making policy proposals to improve the implementation of water trading.

chapter 1|14 pages


Myths, principles and issues in water trading

part I|179 pages

Water trading experiences

chapter 2|18 pages

Managing water stress, drought and climate change in the twenty-first century

Water trading as part of integrated approaches in water management

chapter 3|17 pages

New frontiers for water management

The California experience

chapter 4|13 pages

Water trades in the western United States

Risk, speculation and property rights

chapter 6|17 pages

Trading into and out of trouble

Australian water allocation and trading experience

chapter 9|19 pages

Breaking the gridlock in water reforms through water markets

Experience and issues for India

chapter 10|17 pages

Areas of conflict and the role of water trading

The case of Spain

part II|47 pages

Concerns about water trading and how we are dealing with them

chapter 13|19 pages

Cash flows

Markets for environmental flow allocations

part III|55 pages

Reforms to overcome legal and institutional barriers to trading

part IV|48 pages

Incentives and prices in water trading