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Cap-and-trade of Water Rights. A Sustainable Way out of Australia's Rural Water Problems?

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Trading water rights is a tool for re-allocation of water resources in water-scarce regions such as Australia. Tradable water rights help farmers to act flexibly when facing high fluctuations in water availability and to use the water in a sustainable and environmentally friendly manner. A precondition is that the quantity of water rights is capped at an appropriate level. The institutional arrangements and market structures in which water-right trading is embedded are key factors for the success of such water management instruments. By analysing the structure of the water-right market and water caps as well as using results from explorative expert interviews, the article sheds light on potential problems with the Australian cap-and-trade scheme concerning sustainable water usage. It also asks whether the Australian scheme provides lessons to be learnt by other countries facing similar problems.
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Keywords: Australia; cap-and-trade schemes; rural water management; sustain ability; water policy; water-right trading

Document Type: Research Article

Publication date: December 17, 2014

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  • GAIA is a peer-reviewed inter- and transdisciplinary journal for scientists and other interested parties concerned with the causes and analyses of environmental and sustainability problems and their solutions.

    Environmental problems cannot be solved by one academic discipline. The complex natures of these problems require cooperation across disciplinary boundaries. Since 1991, GAIA has offered a well-balanced and practice-oriented forum for transdisciplinary research. GAIA offers first-hand information on state of the art environmental research and on current solutions to environmental problems. Well-known editors, advisors, and authors work to ensure the high quality of the contributions found in GAIA and a unique transdisciplinary dialogue – in a comprehensible style.

    GAIA is an ISI-journal, listed in the Science Citation Index Expanded, Social Science Citation Index and in Current Contents/Social and Behavioral Sciences.

    All contributions undergo a double-blind peer review.

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