The environmental impact of water markets: an Australian case-study

Water markets are developing as part of a Council of Australian Governments initiative to promote an efficient use of Australia's water resources. The consequences of these policies on river health is yet to be fully understood, but recognised as having significant interrelationships which need to be explored. This paper examines the consequences of introducing trade and allocating water for environmental use in the Border Rivers region of Queensland. The results of this study suggest that: (1) trade in water entitlements is likely to increase the differential between extractive demand and historical flow regimes as extractive water-use concentrates on the most profitable crops, and (2) water markets are likely to limit the effectiveness of water policies aimed at restoring natural flow regimes. As a result, trade-offs between environmental needs and income from extractive use will need to be determined. This work is important and timely in water-policy development demonstrating the linkages and trade-offs between ecological and economic objectives.     

A FRAMEWORK OF ORDERED CLIMATE EFFECTS ON WATER RESOURCES: A COMPREHENSIVE BIBLIOGRAPHY1

ABSTRACT: An examination of the metadata for almost 900 bibliographic references on the effects of climate change and variability on U.S. water resources reveals strengths and weaknesses in our current knowledge. Considerable progress has been made in the modeling of climate change effects on first-order systems such as regional hydrology, but significant work remains to be done in understanding subsequent effects on the second-, third-, and fourth-order economic and social systems (e.g., agriculture, trade balance, and national economic development) that water affects. In order to remedy a recently-revealed lack of understanding about climate change on the part of the public, climate and water scientists should collaborate with social scientists in illuminating the effects of climate change and variability on the systems that affect how and where most people live.     

Sharing waters: Post-Rio international water management

Transcending human-defined political and administrative boundaries, the world's transboundary freshwater resources pose particularly challenging management problems. Water resource users at all scales frequently find themselves in direct competition for this economic and life-sustaining resource, in turn creating tensions, and indeed conflict, over water supply, allocation, and quality. At the international scale, where the potential for conflict is of particular concern, significant efforts are underway to promote greater cooperation in the world's international river basins, with notable achievements in the past decade following the Dublin and Rio conferences. Over the past ten years, the international community has adopted conventions, declarations, and legal statements concerning the management of international waters, while basin communities have established numerous new basin institutions. Despite these developments, significant vulnerabilities remain. Many international basins still lack any type of joint management structure, and certain fundamental management components are noticeably absent from those that do. An understanding of these weaknesses, however, offers an opportunity for both the international and basin communities to better respond to the specific institution-building needs of basin communities and thereby foster broader cooperation over the world's international water resources.     

NEW REQUIREMENTS FOR LOCAL UNITS OF GOVERNMENT IN WATER RESOURCES PLANNING: INSIGHTS FOR IMPLEMENTATION FROM RECENT WATER RESOURCES PLANNING RESEARCH1

ABSTRACT: Recent Federal and some State legislation has enlarged the scope of permitted or required actions of local units of government in water resources management and protection. Much of the legislation encourages local units of government to introduce water resources planning measures which will be preventive instead of corrective. Extensive public works measures, environmental destruction and the threat to human life can thus be eliminated or reduced. Research has developed and tested a method for identifying the elements of a water resources protection program for small urbanizing watersheds which was technically adequate and socially acceptable to the communities implementing such programs. Research results suggest that deliberate efforts will be necessary to inform and educate local units of government as to the usefulness of the legislation; and that the program must reflect local natural resource conditions and local preferences for the method of accomplishing the protection. Successful implementation could be restrained by inertia of local units of government, a lack of tradition in such programs, and hostile existing agencies.     

“There is nothing political in it”: triggers of local political leaders' engagement in climate adaptation

Local government is attributed a vital role in climate-change adaptation. Previous studies contend that conflicting priorities, insufficient institutional incentives and knowledge of risks, and inadequate resources all impede local climate adaptation. Though the importance of local political support in enabling climate adaptation is widely acknowledged, the views of local politicians have rarely been analysed. Drawing on semi-structured interviews with local politicians in Sweden, we explore what affects their engagement in climate adaptation. The study claims that climate adaptation contrary to mitigation is not viewed as political beyond directing attention and sanctioning guidelines set by officials. A limited number of interviewees claim a more strategic political role in adaptation. The combined effect of institutional incentives (e.g. fragmented national guidelines, unappealing goals, and lack of funding), relative weight in local politics, and ability to exercise political leadership (e.g. campaign value, public and media pressure, and lack of ideology) is perceived as too insignificant to trigger strong political engagement. In less-populous municipalities, adaptive measures were highly valued for demonstrating political action.     

GLOBAL CLIMATE CHANGE AND PUBLIC PERCEPTION: THE CHALLENGE OF TRANSLATION1

ABSTRACT: Global climate change is examined from the perspective of its relevancy and urgency as a public policy issue. Interpreting from literature specific to investigations into public awareness and concern, climate change is seen as a legitimate though less than urgent issue. The literature reveals that the general public holds surprising misconceptions about the processes contributing to climate change, including failure to grasp the fundamental connection to CO₂. General ambivalence is also suggested from the results of two surveys conducted by The Groundwater Foundation. They first asked participants in a recent Groundwater Guardian Conference to rate levels of discussion and concern for water resources implications in the participants' communities. A second survey polled national water resource organizations about the extent climate change has been a focus of their educational, investigative, or advocacy efforts. The paper concludes by describing basic barriers to stimulating public response to climate change, which education about the issue should address, and by offering a model to educate and involve citizens based on the Groundwater Guardian program developed by the The Groundwater Foundation.     

The common property resource problem and the fisheries of Barbados and Jamaica

Common property resources (CPR) tend to be particularly susceptible to depletion and degredation. This creates problems for sustainable development and for resource stewardship in general since many of the key global resources are common property. The article explores the different definitions of CPR and the traps associated with the harvesting of CPR without understanding the social, economic, and environmental costs related to their exploitation. The commons problem may be approached in terms of a private property solution, the allocation of individual quotas to fishermen, or a communal property solution in which communities of fishermen basically manage their own fisheries. The offshore fishery of Barbados lends itself to the private property solution, and the inshore fishery of Jamaica, to the communal property solution.Drawing from case studies of Jamaica and Barbados fisheries, four principles of CPR use are proposed: (a) the solution of the CPR problem starts with the control of access to the resource, (b) increasing production from a CPR depends on the conservation of the resource base, (c) the sustainable utilization of a CPR is closely connected to the use of technology appropriate for the harvest, and (d) local-level management improves prospects for the sustainable use of a CPR. The case studies illustrate that there may be local, national, and international levels of interest over the resource. Hence, the successful management of such resources as Barbados and Jamaica fisheries requires that conflicting demands for the resources be taken into account, perhaps using a cooperative management approach.     

CLIMATIC CHANGE AND U.S. WATER RESOURCES: FROM MODELED WATERSHED IMPACTS TO NATIONAL ESTIMATES1

ABSTRACT: Water is potentially one of the most affected resources as climate changes. Though knowledge and understanding has steadily evolved about the nature and extent of many of the physical effects of possible climate change on water resources, much less is known about the economic responses and impacts that may emerge. Methods and results are presented that examine and quantify many of the important economic consequences of possible climate change on U.S. water resources. At the core of the assessment is the simulation of multiple climate change scenarios in economic models of four watersheds. These Water Allocation and Impact Models (Water‐AIM) simulate the effects of modeled runoff changes under various climate change scenarios on the spatial and temporal dimensions of water use, supply, and storage and on the magnitude and distribution of economic consequences. One of the key aspects and contributions of this approach is the capability of capturing economic response and adaptation behavior of water users to changes in water scarcity. By reflecting changes in the relative scarcity (and value) of water, users respond by changing their patterns of water use, intertemporal storage in reservoirs, and changes in the pricing of water. The estimates of economic welfare change that emerge from the Water‐AIM models are considered lower‐bound estimates owing to the conservative nature of the model formulation and key assumptions. The results from the Water‐AIM models form the basis for extrapolating impacts to the national level. Differences in the impacts across the regional models are carried through to the national assessment by matching the modeled basins with basins with similar geographical, climatic, and water use characteristics that have not been modeled and by using hydro‐logic data across all U.S. water resources regions. The results from the national analysis show that impacts are borne to a great extent by nonconsumptive users that depend on river flows, which rise and fall with precipitation, and by agricultural users, primarily in the western United States, that use a large share of available water in relatively low‐valued uses. Water used for municipal and industrial purposes is largely spared from reduced availability because of its relatively high marginal value. In some cases water quality concerns rise, and additional investments may be required to continue to meet established guidelines.     

Welfare environmentality and REDD+ incentives in Indonesia

This paper applies the concept of welfare environmentality to analyse Indonesia’s emerging national and project-based incentive frameworks, a key component to the climate programme reducing emissions from deforestation and forest degradation (REDD+). The paper adapts governmentality theory to explore the rationale and design of various incentive instruments, including government institutions to disburse financial payments and co-benefits to multiple recipients, as well as a local demonstration project in Central Kalimantan Province. These REDD+ incentives are often conflated with the neoliberalisation of the climate agenda, focused on the adoption of market instruments and the commodification of forest carbon. However, REDD+ incentives in Indonesia include diverse policy mechanisms and encompass multiple objectives – such as the delivery of social services and employment schemes aimed at improving community livelihoods. These incentives employ a welfare environmentality, where government agencies and their partners deliver certain rights and socio-economic security for communities in return for adopting practices that improve carbon and forest management. The application of welfare environmentality shows how incentive frameworks operate as a state intervention designed to restructure relations between people and environmental resources.     

POLICY OBJECTWES AND ECONOMIC INCENTWES FOR CONTROLLING AGRICULTURAL SOURCES OF NONPOINT POLLUTION1

In this paper, we review the physical characteristics of agricultural non point pollution and discuss the implications for setting appropriate pollution control objectives and designing incentive-based pollution control policies. First, we discuss that policy objectives must be designed carefully to ensure positive economic net benefits can be expected from pollution control. Next, we review several classes of incentives and recommend the use of design-based incentives (i.e., incentives based on variable input use, management practices, and land use) for controlling non point pollution. Cost-effectiveness requires that incentives elicit three types of responses from farmers: (1) use variable inputs at appropriate levels, (2) adopt appropriate management practices, and (3) make appropriate land use decisions at the extensive margin of production. If a set of incentives fails to induce the correct responses, the resulting runoff levels and hence ambient pollution levels and damages will be too large relative to policy goals. A review of existing programs suggests that greater program coordination and improved targeting of incentives are needed for further water quality improvements. Alternatively, properly designed market-based systems may be effective alternatives. These systems would reduce overall pollution control costs by allowing markets to allocate point source and non point source control costs more efficiently.     

The need for flexibility in freshwater treaty regimes

Shrinking freshwater supplies pose particular threats in international drainage basins, which serve some 40% of the global population and account for around 60% of the world's river flows. The use and management of these basins are increasingly governed by treaties between the riparian states. While the rules of international law, properly understood, are sufficiently flexible to permit adaptation to changing conditions such as development, population growth and climate change, treaties are essentially rigid instruments that are modifiable only under certain limited conditions. Countries should take this fact into account in designing the regimes to govern their shared freshwater resources, including joint management institutions.     

INSTITUTIONAL BARRIERS TO WATER MARKETING IN THE WEST1

ABSTRACT: Water marketing has been proposed as one means of reallocating water supplies in the western United States. While markets for western water currently exist and may be expected to expand, the institutional constraints within which the markets must operate will limit the ultimate size and efficiency of those markets. Lack of articulation of public interests in the water resource itself leads to incomplete definition of the private rights to use the water, and it is those private rights which are sold or leased in the market. The increase in size and efficiency of any market in water rights will be dependent on the willingness of legislatures to specifically define the nature and extent of public interests in water supplies, and detailed definition is unlikely.     

PLANNERS AS A PUBLIC IN WATER RESOURCES PUBLIC PARTICIPATION PROGRAMS1

This paper suggests a number of benefits in identifying urban and regional planners as a public in public participation programs of water resources planning studies. A perspective on public participation is presented. Recent trends and developing concepts are identified: emphasis on the need to coordinate urban and regional planning activities with water resources planning, increasing system complexity, the goals and objectives orientation of planning, planning for multi-objectives, the evaluation of a broader range of alternatives, and the consideration of water alternatives as only one set of measures to further society's aspirations. One way to assist in capitalizing on these trends is to seek out participation of those in other planning efforts who are involved in planning but on a different level. Because of their intimate knowledge of an areas history, growth and development, political climate, local perceptions of needs and desires, and major problems and issues they are able to contribute a great deal of insight in making the water resources planning effort more responsive at the local level. The paper describes one of the first major efforts at working-level public-planner contact which was carried out as part of the Susquehanna River Basin Study. A regional survey team comprised of an engineer and an economist from a federal agency and a state water resources planner met informally with planners, city managers, and local planning commissions to discuss issues related to water resources and the growth and development of local areas. This effort while only part of the overall public participation program yielded a number of benefits and if expanded and refined would be a very useful experience in other studies.     

FACTORS AFFECTING WATERWAY INVESTMENT DECISIONS1

ABSTRACT: There are many factors, other than economic efficiency, which must be considered in judging the merits of proposed investments in the inland navigation system. No satisfactory formula exists for deciding the net worth of public investments in water resources projects. Such a measure would not be accepted because these investments can serve conflicting goals. Political, rather than technical, judgments are required to resolve these goal conflicts.     

WATER AND THE ENERGY CRISIS1

ABSTRACT: Water and energy are inextricably bound. Energy is consumed and sometimes produced by every form of water resources system. Opportunities for future development and production of energy resources abound as well as those for significant reductions in energy consumption through wise water development and management. Technological, political, social, economic and environmental factors interrelate in the energy-water mix. The role of the water resources planner will have to be expanded to include assessment of water-energy impacts in addition to traditional planning considerations. An energy conservation account may well have to be added to the dimensions of national economic development and environmental quality in water resources planning. Ways must be found to reduce amounts and rates of water used and energy consumed through new manufacturing processes, improved irrigation practices, better management, new or altered social-political-economic arrangements and other procedures. To do this will require setting priorities and making difficult management decisions. The water fraternity can play a major role in alleviating the energy crisis we now face.     

Factors driving deforestation in common-pool resources in northern Mexico

The theory of collective action has been extensively used to explain the relationship between common-based property regimes and the conservation of natural resources. However, there are two key components of the theory that literature reports as puzzles in which no consensus exists about their effect on the performance of common-pool resources. These are group size and heterogeneity. This study analyzes the effects of these two key components on the effectiveness of community-based forestry, called ejidos, to protect their forest resources in northern Mexico. We used a multinomial logit model to determine the contribution of 16 explanatory variables to the dependent variable, a measure of success of ejidos defined by the presence of deforested, degraded, or forested conditions. The results show that corn yield, marginality, percent of forest area, total population, a forest value index, distance to markets, roads and towns, were all statistically significant in driving deforested conditions. Deforestation becomes more attractive for poor communities and as corn yield and distance to towns, roads, and markets decrease. In general, group size and heterogeneity had no significant effects on the presence of deforested conditions. Deforestation is driven by resource-specific characteristics, such as location and soil productivity, not by ejidos' attributes, such as total area or number of members. We argue that current institutional policies focusing on the structure of property right arrangements should be shifted (1) to provide better technology for land cultivation; (2) to reduce the marginality problem in poor communities; and (3) to strengthen local institutions.     

SAFE WATER FOR ALL

The supply of safe water is both a necessary condition for human wellbeing and a significant contribution to national production. In reviewing the progress to date, the author finds room for optimism but not complacency. He discusses the elements of success and failure of rural water supply programmes, highlighting the interface which must exist between national planners and local communities. He also draws attention to action needed from governments and international organizations.     

Economic instruments for sustainable community development

Abstract

In recent years there has been increasing interest in the use of so‐called ‘economic instruments’ in environmental policy. Economic instruments influence the behaviour of economic agents by providing financial incentives for environmentally improved behaviour, or disincentives for damaging behaviour. This paper explores the use of economic instruments in the field of sustainable community planning and development. It does so in the wider context of how environmental economic policy is made. The focus of this paper is to examine the role of policy instruments in community planning, and to review the different types of instruments that are available to policy‐makers. Numerous examples of the various instruments at the community level are described. It is widely believed that policy making should occur at the lowest or most local level possible while maintaining effectiveness. A system of government that does not give adequate legal power to local governments, and does not allow local governments considerable flexibility in the use of funds, cannot be expected to achieve all community objectives. Central governments must give local governments permission to take measures towards sustainable community planning, even though that requires giving them power to address broader issues. At the same time, when issues that should be addressed at national and international levels are not addressed, local governments may be able to take action individually. Given the general reluctance (and perhaps inability) of governments at all levels today to consider non‐economic and, particularly, non‐market policy instruments, it is pragmatic as well as timely to improve our understanding of economic instruments for sustainable community development.     

What shapes municipalities’ perceptions of fairness in windpower developments?

ABSTRACT

Siting controversies have become familiar in windpower development. Process and outcome fairness in the form of economic benefits to local communities and inclusion in decision-making processes are recognised as important elements in local acceptance of windpower installations. To these, we add the concept of “relative fairness” influencing perceptions of overall fairness. In this article, we examine why Norwegian municipalities agree to host windpower, and the role of process, outcome and relative fairness in this decision. Municipalities are central in providing welfare services, and in ensuring a viable local economy and local workplaces. Process fairness is important, as is evident when municipalities have little influence in the detailed planning of the plants. Also, outcome fairness, in the form of economic compensation – particularly through property tax – is decisive for positive attitudes towards windfarms, as municipalities can strengthen their role as welfare providers and boost local economic activities. Less emphasised are the effects on global climate and national climate goals. However, effects on local landscape and nature are also important for municipalities, as became clear when the national government proposed withdrawing the municipalities’ possibilities of levying property taxes. The municipalities argue that it is only fair to receive something in return for hosting windmills, and relative fairness is important to their argument for equal treatment regarding hydro- and wind-power electricity production in the form of a natural resource tax.     

Institutional reform in the Andean irrigation sector: Enabling policies for strengthening local rights and water management

For centuries, local and indigenous water rights and rules in the Andean region have been largely neglected and discriminated against. The process of undermining local communities’ water access and control rights continues up to today and not only is it headed by powerful local, national and international water‐use actors encroaching local rights — it is also a direct consequence of vertical State law and intervention practices, and the latest privatization policies. Recognition of and security for the diverse and dynamic local rights and management frameworks is crucial for improving rural livelihoods and even national food security in Andean countries. At the request of the Government of Ecuador — in which at that time the indigenous movement had its political participation — a research mission was organized to formulate a proposal for institutional reform, aiming at the strengthening of the national irrigation sector. In this article, some basic mission results are outlined and analyzed within the scope of four concepts (institutional viability, political democracy, equity, and water rights security), and practical elements for institutional reform are suggested, not only for the Ecuadorian irrigation sector but also other settings. The complementary roles of central Government, local governments and water user organizations in water resources management are emphasized as is the need to strengthen enabling legal and policy frameworks. The importance of translating constitutional recognition of local and indigenous rights and common property systems into practical procedures and institutional structures is also stressed.