Water markets and regulation: Implementation, successes and limitations

Abstract

Although markets are widely promoted as an efficient tool for managing water, little critical attention has been directed to the legal and governance issues of water markets, including matters such as compliance and enforcement, water accounting, and the overall effectiveness of water trading. In response to these gaps, the chapter critically evaluates Australia's cap and trade instrument, drawing on a review of the literature and survey and interview data collected from government and non-government stakeholders. The findings reveal achievements, including flexible responses to past and future droughts; efficiencies that contribute to economic and environmental benefits; and increasing trade and market functionality.