Tradable Water Rights Corinne Waelti seecon international gmbh

  • Slides: 12
Download presentation
Tradable Water Rights Corinne Waelti, seecon international gmbh Tradable Water Rights

Tradable Water Rights Corinne Waelti, seecon international gmbh Tradable Water Rights

Find this presentation and more on: www. ssswm. info. Copyright & Disclaimer Copy it,

Find this presentation and more on: www. ssswm. info. Copyright & Disclaimer Copy it, adapt it, use it – but acknowledge the source! Copyright Included in the SSWM Toolbox are materials from various organisations and sources. Those materials are open source. Following the opensource concept for capacity building and non-profit use, copying and adapting is allowed provided proper acknowledgement of the source is made (see below). The publication of these materials in the SSWM Toolbox does not alter any existing copyrights. Material published in the SSWM Toolbox for the first time follows the same open-source concept, with all rights remaining with the original authors or producing organisations. To view an official copy of the Creative Commons Attribution Works 3. 0 Unported License we build upon, visit http: //creativecommons. org/licenses/by/3. 0. This agreement officially states that: You are free to: • Share - to copy, distribute and transmit this document • Remix - to adapt this document. We would appreciate receiving a copy of any changes that you have made to improve this document. Under the following conditions: • Attribution: You must always give the original authors or publishing agencies credit for the document or picture you are using. Disclaimer The contents of the SSWM Toolbox reflect the opinions of the respective authors and not necessarily the official opinion of the funding or supporting partner organisations. Depending on the initial situations and respective local circumstances, there is no guarantee that single measures described in the toolbox will make the local water and sanitation system more sustainable. The main aim of the SSWM Toolbox is to be a reference tool to provide ideas for improving the local water and sanitation situation in a sustainable manner. Results depend largely on the respective situation and the implementation and combination of the measures described. An in-depth analysis of respective advantages and disadvantages and the suitability of the measure is necessary in every single case. We do not assume any responsibility for and make no warranty with respect to the results that may be obtained from the use of the information provided. Tradable Water Rights

Find this presentation and more on: www. ssswm. info. Contents 1. Introduction to Economic

Find this presentation and more on: www. ssswm. info. Contents 1. Introduction to Economic Tools 2. What are Tradable Water Rights? 3. Implementing Tradable Water Rights 4. Conclusion 5. References Tradable Water Rights 3

Find this presentation and more on: www. ssswm. info. 1. Introduction to Economic Tools

Find this presentation and more on: www. ssswm. info. 1. Introduction to Economic Tools The Economist’s View: Externalities Source: SAVENIJE & VAN DER ZAAG (2002) Externalities arise because a substantial part of the costs of economic activities is not being paid by the actors responsible but by the general public in form of environmental damage, security, or long-term climatic risks. Tradable Water Rights 4

Find this presentation and more on: www. ssswm. info. 1. Introduction to Economic Tools

Find this presentation and more on: www. ssswm. info. 1. Introduction to Economic Tools With Economic Tools…. . . people change their behaviour because the want to achieve maximal benefit at minimal cost. Economic Tools involve the use of prices and other market-based instruments to provide monetary incentives to change behaviour. Tools: • Water pricing (tariffs) • Subsidies • Charges (irrigation, wastewater) • Tradable water rights • Etc. Source: http: //www. wsp. org/userfiles/image/november 2002. jpg [Accessed: 23. 03. 2010] Tradable Water Rights 5

Find this presentation and more on: www. ssswm. info. 2. What are Tradable Water

Find this presentation and more on: www. ssswm. info. 2. What are Tradable Water Rights? How the System Works Authority Overall quantitative goal (of pollution or abstraction) Permit Permit Company 1 Company 2 Company 3 Company 4 Company 5 Permit trade between companies In a perfectly competitive market, permits will flow towards the highest value user: Permit users gaining lower benefit from using their permits will sell them to users with higher benefit. This trading results in mutual benefit. Tradable Water Rights 6

Find this presentation and more on: www. ssswm. info. 2. What are Tradable Water

Find this presentation and more on: www. ssswm. info. 2. What are Tradable Water Rights? Different Types of Water Rights Right to…: • Water abstraction • Consumption of water-based resources (such as fish) • Water pollution Further differentiation: Time scale Limitation Target • Permanent • Cap and trade (maximum ceiling) • Absolute • Temporary • One-off • Relative • Baseline and credit (minimal performance commitment) JOHNSTONE & TIETENBERG (2004) Tradable Water Rights 7

Find this presentation and more on: www. ssswm. info. 3. Implementing Tradable Water Rights

Find this presentation and more on: www. ssswm. info. 3. Implementing Tradable Water Rights System Requirements • Secure property rights • Water rights must be enforceable • Efficient administrative system to ensure market operation What can happen if these prerequisites are not met? • Formation of a Monopoly • High transaction costs • Insufficient monitoring and enforcement Tradable Water Rights 8

Find this presentation and more on: www. ssswm. info. 3. Implementing Tradable Water Rights

Find this presentation and more on: www. ssswm. info. 3. Implementing Tradable Water Rights Further Requirements to Consider • Legal and regulatory framework • Overall cap on emissions and sources • Emission quotas for tradable pollution rights • Timing and spatial issues • Measuring emissions • Tracking and enforcement Tradable Water Rights 9

Find this presentation and more on: www. ssswm. info. 4. Conclusion Efficient Measure, difficult

Find this presentation and more on: www. ssswm. info. 4. Conclusion Efficient Measure, difficult Implementation Advantages • • Internalisation of negative externalities More innovation More environmental certainty Low administrative costs Flexibility concerning distribution Cost-effective Can also address smaller consumers (such as households) Disadvantages • • • Has to be compliance controlled and non-compliance punished Time consuming Risk of guaranteeing too many exceptions Danger of the formation of a monopoly Allocation insecurities Successfully implementing tradable water rights can be difficult and is generally more challenging than other measures, such as water charges. Tradable Water Rights 10

Find this presentation and more on: www. ssswm. info. 5. References ANDERSON, R. (2002):

Find this presentation and more on: www. ssswm. info. 5. References ANDERSON, R. (2002): Incentive-Based Policies for Environmental Management in Developing Countries. Issue Brief 02 -07. Washington D. C. : Resources for the Future (RFF). URL: http: //www. rff. org/Publications/Pages/Publication. Details. aspx? Publication. ID=9616 [Accessed: 08. 2012]. JOHNSTONE, N. , TIETENBERG, T. (2004): Ex. Post Evaluation of Tradable Permits: Methodological Issues and Literature Review. OECD Publishing. URL: www. oecd-ilibrary. org/environment/tradeable-permits/ex-post-evaluation-of-tradeablepermits_9789264015036 -2 -en [Accessed: 08. 2012]. KRAEMER, R. , KAMPA, E. , INTERWIES, E. (2004): The Role of Tradable Permits in Water Pollution Control. Brussels: Ecologic, Institute for International and European Environmental Policy. URL: www. ecologic. de/download/projekte/1850 -1899/187203/1872 -03_tradable_permits. PDF[Accessed: 08. 2012]. SAVENIJE, J. , ZAAG, P. van der (2002): Water as an Economic Good and Demand Management. Paradigms with Pitfalls. International Water Resources Association. In: Water International 27, 98 -104. URL: www. colorado. edu/geography/class_homepages/geog_4501_s 12/readings/watereconomicgood. pdf [Accessed: 08. 2012]. Tradable Water Rights 11

“Linking up Sustainable Sanitation, Water Management & Agriculture” SSWM is an initiative supported by:

“Linking up Sustainable Sanitation, Water Management & Agriculture” SSWM is an initiative supported by: Created by: Tradable Water Rights 12