Water Markets & Tradable Permits

1. Water Markets & Tradable Permits Sopheak & Huy

2. Our Focus • Water Markets & Transferable Permits • Water Auctions • Tradable Pollution Permits • Lessons Learnt

3. Water Markets & Transferable Permits (1) • Water markets & transferable water rights: Sales of water allocations • Applications: Surface or ground water; seasonal or permanent rights transferring

4. Water Markets & Transferable Permits (2) • Functions: • Water transferred from lower- to higher-value uses • Making the strong property rights of existing holders approachable • A cheaper way for communities/farmers to obtain water • Used by environmental champions

5. Water Auctions • Public authorities: Water available to the highest bidders at public auctions • Water lots: Daily, weekly, seasonal or annual basis • Auctions: UsefulVSConflicts of Interest

6. Trade Pollution Permits (1) • Individual polluters: Buy and sell quotas of emission • Conditions for successful water markets and auctions: • A clear and permissive legal framework • A procedure for considering the impacts of these trades on the 3rd parties (compensation) • Recognition of the potential environmental impact of trades and solutions

7. Trade Pollution Permits (2) • Physical means of transferring waters b/w potential users • Strong provision by Government for effective market operation • Regulation to avoid monopoly

8. Lessons Learnt (1) • Charging systems: Vulnerable groups protected • Mechanism for initial allocation of rights: Fair, equitable, and effective • Efficient and effective auctions in some situations ($ vs water allocation) • Administrative costs may outweigh benefits => Make the trading systems less complicate

9. Lessons Learnt (2) • Markets: High value use & assist conflict resolution • Water auctions: Grant permission water allocation under competitive conditions but must prevent monopoly • Markets = Democratic system

10. The End!