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An opportunity to improve water trading in the South East Catchment of South Australia

This paper outlines how an area-based water allocation system for irrigating crops could be converted to a system of shares, structured so as to allow the development of a low cost trading market for water and salinity shares. It stresses the need for separation of entitlements of water from land and the separation of water rights into their various components. By moving to this type of allocation system, combined with some safeguard provisions, trade in groundwater could be facilitated in the South East Water Catchment located in the State of South Australia. Separation of salinity and other environmental impacts from water volume trading will allow market assessment of highest and best use to include consideration of environmental impacts. Although the focus of the paper is on groundwater allocation and management, the principles and concepts outlined are applicable to surface water systems.

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Paper provided by Policy and Economic Research Unit, CSIRO Land and Water, Adelaide, Australia in its series Natural Resource Management Economics with number 03_01.

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Date of creation: Oct 2003
Handle: RePEc:csi:report:03_01
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Policy & Economic Research Unit, CSIRO Land and Water, PMB2, Glen Osmond, South Australia 5064

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