Market Creation

Creating legal frameworks designed to let free-market forces effect positive changes is an increasingly popular legislative option. Such markets are possible in the areas of agricultural water use and non-pointsource discharge. For example, water markets are institutional frameworks for the exchange of water use rights. If society refuses to incur the costs of significant new water storage and conveyance facilities, water markets are one way to manage water demands within the existing supply system. Even if new storage and conveyance infrastructure is created, water markets can help allocate water in an economically efficient manner. Additionally, effluent trading markets for non-pointsource dischargers can reduce water quality impacts, and may help bring about better basin-level watershed management.