Water markets in Spain: meeting twenty-first century challenges with twentieth century regulations

Abstract

Water scarcity is a growing reality in many Spanish basins which creates the need for more flexible and efficient market-based allocation instruments. This chapter critically analyzes water markets’ strengths and weaknesses, evaluates some recent trading experiences, and assesses some recent reforms in the Spanish water legislation. Formal and informal trading, and variants in between, have facilitated temporary and permanent water exchanges, with and without explicit support of public agencies. Based on our analyses and other literature findings, we propose a number of reforms that we consider necessary to upgrade water markets in Spain, including some innovations such as optioning rights, and quality-graded water exchanges.