ABSTRACT
Population growth and the increased demand for environmental protection in the western United States are placing additional demands on existing water supplies. The increasing environmental and fiscal costs of development limit western states’ ability to meet these demands by traditional structural supply augmentation. Excess urban and environmental water demands must therefore largely be met by conserving and reallocating existing supplies. Academics and water agencies alike now widely acknowledge that water trading plays in important role in this process by offering a clear measure of value for conservation and by providing a voluntary, self-compensating mechanism for reallocation.
