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<br />Water markets can mean an end to water shortages <br /> <br />age 17 of27 <br /> <br />1996, 1). <br /> <br />Across the Oceans <br /> <br />The trend toward water marketing has not been <br />limited to the United States. Australian states, led <br />by South Australia, New South Wales, and Victoria, <br />have begun allowing permanent transfers of water <br />rights through markets. As is often the case, <br />informal structures were evolving before the <br />government codified water trading in the 1980s. <br />Fanners transferred water entitlements through <br />"duality of ownership" or "license stacking." That <br />is, they purchased two parcels of land and <br />transferred the water entitlement from one to the <br />other. <br /> <br />Sturgess and Wright (1993,23-24) report that water <br />transfers within the Murray-Darling River Basin, <br />which stretches 2,530 kilometers (1,571 miles) <br />through eastern Australia, dramatically increased <br />fanners' income. In the 1988-89 growing season, <br />they note, 280 transfers occurred, increasing rural <br />income by $5.6 million. Two years later, the <br />addition to income was $10 million. (During the <br />drought of 1987-88, the figure was even higher-- <br />$17 million.) "If benefits of this scale can be <br />obtained by a system of water transfers <br />circumscribed by regional barriers, the benefits that <br />would flow from the redefinition of water property <br />rights to allow the free transfer of water between <br />regions. . . would be greater still," they write. <br /> <br />European countries are not as far along with water <br />trading, but they are experimenting with higher <br />water fees to encourage conservation and reduce <br />pollution. In Germany, taxes and water charges are <br />being used to induce users to switch from <br />groundwater to surface water supplies. In France's <br />Artois-Picardie River basin, water charges reduced <br />overall consumption by 15 percent and industrial <br />consumption by 55 percent between 1970 and 1989. <br />Assessments on effluent discharges also reduced <br />water pollution. "One ofthe major merits of this <br />system is that the concept of water having an <br />economic value has now become generally <br />accepted," writes Mark Tuddenham (1995, 213). <br />These systems should not be confused with actual <br />water markets where willing buyers and willing <br />sellers exchange water rights, but they indicate a <br />recognition that prices matter. <br /> <br />http://www . perc.orglpublications/policyseries/priming_ full. php ?s=2 <br /> <br />112/2006 <br />