Coase-coloured Glasses and Rights Bundling: Why the Initial Specification of Water Rights in Volumetric Terms Matters

Crase, Lin; Gawne, Ben

doi:10.1111/j.1759-3441.2011.00102.x

Cited by 7 publications

(11 citation statements)

References 19 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…This is the case for water markets in Australia, Chile and western USA, although some literature suggests the effect is more limited in the latter two cases (Garrick et al 2009;Grafton et al 2011). Water trade can also improve water-user adaptability by making water allocation contingent to available resources in order to reduce welfare losses and provide a better response to droughts (Crase and Gawne 2011;Loch et al 2012). An example of this is, replacing water licenses with shares that allow holders to use a proportion (instead of a fixed amount) of allotments in Australian water markets (Young 2014).…”

Section: Water Tradingmentioning

confidence: 99%

Managing Water Scarcity at a River Basin Scale with Economic Instruments

Gómez

Pérez-Blanco

Adamson

et al. 2018

Water Econs. Policy

View full text Add to dashboard Cite

This paper presents a conceptual framework for both assessing the role of economic instruments, and reshaping them in order to enhance their contribution to the goals of managing water scarcity. Water management problems stem from the mismatch between a multitude of individual decisions, on the one hand, and the current and projected status of water resources on the other. Economics can provide valuable incentives that drive individual decisions, and can design efficient instruments to address water governance problems in a context of conflicting interests and relevant transaction costs. Yet, instruments such as water pricing or trading are mostly based on general principles of welfare economics that are not readily applicable to assets as complex as water. A flaw in welfare economic approaches lies in the presumption that economic instruments may be good or || Corresponding author. This is an Open Access article published by World Scientific Publishing Company. It is distributed under the terms of the Creative Commons Attribution 4.0 (CC-BY) License. Further distribution of this work is permitted, provided the original work is properly cited.Water Economics and Policy, Vol. 4, No. 1 (2018) bad on their own (e.g., finding the "right" price). This vision changes radically when we focus on the problem, instead of the instrument. In this paper, we examine how economic instruments to achieve welfare-enhancing water resource outcomes can realize their full potential in basin-scale management contexts. We follow a political economy perspective that views conflicts between public and private interest as the main instrumental challenge of water management. Our analysis allows us to better understand the critical importance of economic instruments for reconciling individual actions towards collective ambitions of water efficiency, equity and sustainability with lessons for later-adopting jurisdictions. Rather than providing panaceas, the successful design and implementation of economic instruments as key river basin management arrangements involves high transaction costs, wide institutional changes and collective action at different levels.

show abstract

Section: Water Tradingmentioning

confidence: 99%

Managing Water Scarcity at a River Basin Scale with Economic Instruments

Gómez

Pérez-Blanco

Adamson

et al. 2018

Water Econs. Policy

View full text Add to dashboard Cite

show abstract

“…Both Crase and Gawne (2011) and Nguyen, Goesch and Gooday (2013) furthered the discussion of why an optimal RtB strategy is required to maximize the environmental benefits, the authors do not derive a solution. The closest effort to optimize the RtB was by Qureshi et al (2010) who also investigated the role of water-use efficiency to obtain environmental water for single catchment.…”

Section: Rsmg Model Of the Mdb (Statementioning

confidence: 99%

“…The realized outcomes from climate change have the capacity to alter both the temporal and spatial security of alternative water entitlements (Crase & Gawne 2011;Randall 1981). These new rainfall patterns and changes to water security will subsequently force managers to adapt beyond past experiences (Mallawaarachchi et al 2012).…”

Section: 1mentioning

confidence: 99%

“…For example, Crase and Gawne (2011) noted that if the CEWO failed to anticipate climate change impacts on the water security provided by alternative water property rights, then it may be left with a portfolio of water rights (i.e. 'common property') that is unable to provide sufficient water to achieve the Basin Plan's objectives.…”

Section: Climate Change and The Basin Plan 44mentioning

confidence: 99%

“…Crase and Gawne (2011) defined four key requirements to optimize the RtB process. First, the environmental goals of the CEWO's environmental strategy need to be clearly defined.…”

Section: )mentioning

confidence: 99%

See 2 more Smart Citations

Restoring the balance: Water reform & the Murray-Darling Basin plan

Adamson¹

View full text Add to dashboard Cite

The Murray-Darling Basin Plan (Basin Plan) is tasked with improving welfare by internalizing the negative externalities derived from the past 130 years of policy development which has over allocated water resources to irrigators in Australia's MurrayDarling Basin (MDB). As water scarcity increases these welfare losses are compounded.For example, during the Millennium Drought water could not be delivered to urban communities, critical environmental flow was not provided, and the typically elastic private demand for water transformed into an inelastic demand function exposing capital investment to climatic risk.The Basin Plan utilizes the common property concept to internalize externalities by reducing the quantity of the privately held (irrigators) surface rights by 3,200 gigalitres (GL) and transferring these rights to an environmental steward. By restoring environmental flows, externalities are internalized as the environment gets a share, and the 'quality' of the water resources improves thus increasing economic welfare. To facilitate this transfer, an adjustment package has been designed that provides a net increase in groundwater and allocates over $10 billion in funding, split between two programs to purchase surface water. Some $3.1 billion has been allocated to purchase 1,500GL of property rights from irrigators while $5.8 billion has been allocated to gain 1,700GL by subsidizing investments in water use efficiency programs.Water resources in the MDB are highly variable and are characterized by floods and droughts events. This variability is expected to increase as climate change is forecast to reduce supply and increase the variability of rainfall. Consequently the long run success of the Basin Plan will be dependent on the efficiency of these alternative strategies to source surface water for the environment subject to this inherent variability and increasing uncertainty.By representing uncertainty about water supply within alternative states of nature (drought, wet and normal), the state-contingent approach (SCA) provides the capacity to examine how irrigators adapt to both the state of nature and alternative policy settings by changing inputs, production systems and transition towards opportunistically irrigating in favorable states of nature. By being able to model output and decision maker uncertainty separately, ii the SCA approach then overcomes the limitations of other decision making approaches.By setting up the Basin Plan as an optimization question, the net change in national welfare from irrigation can be examined against the assurance that the Basin Plan objectives are achieved (i.e. policy constraints of minimum flow targets and quality improvements). This provides the capacity to illustrate how alternative climate scenarios could alter the possibility of meeting the water reform objectives listed in the Basin Plan.The analysis reveals that: the increased groundwater access creates inequitable wealth for irrigators and shifts climate risk towards the environment; that the optimal...

show abstract