Water market

Abstract

Water markets have emerged in various forms: some have gradually evolved with the development of water usage (such as in Southeast Australia), while others have been established in response to legal events (such as lawsuits concerning the protection of endangered species in Texas), or created to streamline government operations and reduce financial burdens (such as the decentralization of water infrastructure management following the financial crisis in Mexico). However, what is common among most markets is the condition of water scarcity. In other words, markets emerge when water demands approach the limits of available supply. It is evident that the available water capacity (both accessible and extractable) is contingent upon the renewability of water resources (natural limitations), the development of extraction infrastructure (economic limitations), and social-cultural constraints (whether formal or customary). For instance, whenever water governance decides to impose restrictions and limits on water extraction to facilitate river recreation, a social-cultural limitation is effectively established.

Keywords

• water market
• water extraction
• water governance