Evaluating the Merits of Water Markets and TradingBy: Tim Shah, April 6, 2011PLAN 597
Hey Everyone. Please skim through the reading “Parrying Water Conflicts in the Okanagan”, particularlythe section on water markets. It is attached on the Google website for the class.
In the British Columbia Living Water Smart Plan, the government has proposed water markets as a tool to
“promote water use efficiency and conservation among water licensees, especially during times of drought and scarcity”
. They are proposing this tool to be included in the revised Water Act for theprovince. Water rights trading and transfers could occur among existing water licensees in areas wherewater is in short supply on a short term basis. Trading and transfers could be restricted to a particular sector where the water conserved could be traded within the sector among existing users (e.g., agriculture). Inanother example, other water conserved could be used to improve water flows and protect ecosystems.The critical elements that make water markets function include
—without scarcity there isno “value” in trading as more water can simply be acquired through licensing; water rights should be
from land rights to enable trade of the water alone; has to be local or geographicallyadvantageous (e.g. trading with a basin or trade occurs within 100 KM of buyers and seller);
means a proper governance and enforcement system.
Key features of BC water rights are:
each water licence is appurtenant to a parcel of land
transfers of appurtenancy require agreement of the parties involved and of the relevant water controller
licence holders must use the water described in their licence or risk having their licence cancelled(beneficial use or “use it or lose it”
all licences have a priority date which determines the order in which they are cut off should therebe insufficient water to supply all of them (FITFIR)
Advantages of water markets and trading
Placing a value on water
If water users reap the rewards of their efforts, they will explore more entrepreneurial approachesto managing the water
Investing in irrigation technology (drip irrigation) can save water for farmer; they can deriveadditional income by selling excess water gained through increased efficiencies (farmers sellingwater to cities, for example)
Giving water back to the environment
Unforeseen risk and dubiety around privatization
Are First Nations considered a “water user”?
Without a proper governance structure, there can be socio-economic inequity
Two contrasting opinions on water markets and trading: