8009 ‎(2)‎

• UCREFRP Catalog Number: 8009
• Author: Natural Resources Law Center.
• Title: Restoring the Waters.
• USFW Year: 1997.
• USFW - Doc Type: Boulder, CO.
• Copyright Material: YES

manage their water supplies more effec-
tively and will streamline water district
operations. Water districts can also use
WaterLink to provide public information
in acost-effective manner, such as rainfall
summaries, water storage levels and access
to on-line irrigation advice from the State
of California.
Why Water Markets?
Well-functioning water markets are a key
component of more efficient water use.
They can provide water users with more
short-run flexibility to adjust to volatile
weather conditions and more long-run
flexibility to adjust to shifts in production
technology and consumer preferences.
Markets provide a financially attractive
alternative to spreading more water on
fields than is necessary. In economic terms,
markets confront users with the real
opportunity cost of water and create
incentives for water to be used in its
highest-value use. Under traditional "use-
it-or-lose-it" systems, a water user with
abundant supplies has little incentive to
invest in water-conservation technology or
engage in best-management practices.
However, if a water user is able to sell
water in a market, the user has an incen-
tive to conserve. Given the potential gains
from trade for both buyers and sellers,
market-based systems of water allocation
are achieving broader acceptance among a
wide array of groups -urban, agricultural
and environmental.
Local water markets have been active for
years in agricultural water districts
throughout the West. Broader inter-sector
water markets, in which long-term water
rights are actually bought and sold, have
been slower to develop.
The value of WaterLink lies in its potential
to lower transaction costs by providing
market information, reducing negotiation
costs and expediting communication
between water users and water districts. As
with other network technologies, the
worth of WaterLink will increase as the
number of users increases. WaterLink's
adoption rates have been promising. There
are currently about 50 users on the system.
Expansion of WaterLink to over 20
additional Central Valley Project water
districts in the San Joaquin Valley is being
discussed. WaterLink can be adapted to
meet the specific needs of each water
district in multiple intro-district markets,
or in one large inter-district market
network.
For More Information Contact:
Gregory Thomas, President
Natural Heritage Institute
114 Sansome Street, Suite 1200
San Francisco, CA 94104
Phone: [phone]
Fax: [phone]
E-mail: [e-mail]

Obstacles to water market
transactions
^ Physical infrastructure may not
exist to transport water from
potential sellers to buyers.
^ Institutional and/or political
barriers may prevent inter-sector
tran~~fers.
^ Property rights in water are
difficult to define given the
interdependence among water
users in terms of return-flow
quantities, ground water levels
and water quality.
^ Large-scale water sales from one
region to another may damage the
loco economy in the basin of
origin.
^ Market participants may face high
transaction costs.
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