Converting users’ rights to tradable allocations

Abstract

This chapter describes the process of converting users’ rights to tradable allocations. The first section discusses the nature of the water rights in the smart market, why initial rights are important, and whether this conversion is privatization. The second section discusses the need for the new license system to be able to manage new entrants. The third and fourth sections discuss the degree of security for the new rights, and make a case against long-term and perpetual licenses within smart markets. The final two sections discuss trading of long-term licenses, and converting disparate existing water quantity rights to smart market allocations.