Alternative structures for water rights markets: overview and hypothetical case study

Although there has been general interest in the use of systems of transferable water rights to increase efficiency and flexibility of present water allocation systems, there has been relatively little research into the specific details of these market systems. The design of systems of marketable permits for water consumption from natural water courses was examined through a qualitative overview and a quantitative quasi-empirical, quasi-hypothetical case study. The most important considerations of the study were associated with the uncertainty of future streamflows and economic conditions, locational issues, and efficient and effective functioning of the markets.