ABSTRACT
This chapter focuses on the water management challenges and policy responses faced by arid regions that contain an irrigated agricultural base, which consumes large quantities of water alongside a growing urban population and claims for water by native peoples and for environmental restoration. Detailed background on these issues in the State of Arizona, US, can be found in Colby and Jacobs (2006). This chapter draws on the experience of Arizona (and, occasionally, other arid urbanizing locations), focusing on innovative voluntary water transactions as a response to competing water claims. The chapter begins by summarizing reasons why policy makers need to consider encouraging voluntary transactions and key considerations in setting up a policy framework to govern such activities. The chapter reviews a series of experiences with such transactions and concludes with suggestions for other regions that are considering more widespread use of these tools.
