IWRA Proceedings

Today, many countries in the world have a need to reallocate water between existing uses. Four reasons can be given for why reallocation is occurring and why it will increase in the future. First, in many places water shortages and expanding uses mean the supply of water is far short of the demand. Second, water needs to be put to more efficient uses from both an economic and conservation perspective. Third, reallocation is needed because the global community is placing new and different values on the way water is used. In the past some water allocation systems were designed to completely allocate water for consumptive uses such irrigation, industry, and urban water supplies. Today, the goal is sustainable development. Fourth, changing environmental conditions can modify the volume of water available for allocation. Temporary conditions, like drought, or the potential for global climate change means we need to rethink existing allocation systems. All these reasons point to the need for a better system of property rights in order to facilitate reallocation.

Property rights systems for water should be designed to accomplish four purposes. First, the property right needs to define the uses that may be made of water. Clearly defined “use” rights are the core of a water right. Second, because water is mobile, use must be shared. The water right must not only define the uses allowed, but the right must define the relationships that each “user” and each use, human or environmental, has with the other “users” and uses in the system. Because property rights define relationships, some “rights” are in fact “obligations” to do or refrain from doing something. Third, property rights systems should be designed to reduce conflicts between right holders. However, with water rights, multiple uses often exist for the same water either simultaneously or sequentially, increasing the potential for conflicts between users. The goal of reducing conflicts is difficult to achieve when the right is shared and not exclusive as it is with some other property rights. Fourth, all property rights systems need to be adaptable and therefore require mechanisms for reallocation. Although many different mechanisms for reallocation can be used, our focus here is market reallocation. Markets can be an efficient mechanism for reallocating water, but many water rights systems are poorly designed for that purpose (Howe et al. 1986). In order to develop a simple and efficient system for water marketing, certain obstacles must be overcome. Although these obstacles are discussed in terms of market reallocation, the same problems must be overcome if reallocation is through administrative, legislative, or other means.