Smart Markets for Water Resources

A Manual for Implementation

  • John F. Raffensperger
  • Mark W. Milke

Part of the Global Issues in Water Policy book series (GLOB, volume 12)

Table of contents

  1. Front Matter
    Pages i-xxxii
  2. John F. Raffensperger, Mark W. Milke
    Pages 1-17
  3. John F. Raffensperger, Mark W. Milke
    Pages 19-36
  4. John F. Raffensperger, Mark W. Milke
    Pages 37-61
  5. John F. Raffensperger, Mark W. Milke
    Pages 63-76
  6. John F. Raffensperger, Mark W. Milke
    Pages 77-94
  7. John F. Raffensperger, Mark W. Milke
    Pages 95-136
  8. John F. Raffensperger, Mark W. Milke
    Pages 137-173
  9. John F. Raffensperger, Mark W. Milke
    Pages 175-189
  10. John F. Raffensperger, Mark W. Milke
    Pages 191-218
  11. John F. Raffensperger, Mark W. Milke
    Pages 219-228
  12. John F. Raffensperger, Mark W. Milke
    Pages 229-237
  13. John F. Raffensperger, Mark W. Milke
    Pages 239-249
  14. John F. Raffensperger, Mark W. Milke
    Pages 251-272
  15. John F. Raffensperger, Mark W. Milke
    Pages 273-286
  16. Back Matter
    Pages 287-313

About this book

Introduction

Why is trade in wholesale water so rare, when markets can actively trade bread, tractors, and electricity? This book shows that water markets fail because of high transaction costs, resulting in inefficient allocations and unpredictable environmental effects. To overcome these obstacles, this book proposes a trading mechanism called a smart market. A smart market is an auction cleared with optimization. A smart market can reduce the transaction costs of water trading, while improving the environmental outcomes. The authors show why a smart market for water is needed, how it would work, and how to implement it. 

The smart market described here uses a hydrology simulation of the water resource, user bids via the internet, and mathematical optimization, to maximize the economic value of water while meeting all environmental constraints. 

The book provides the background to understand the smart market for water, and the detail to help the reader start working on its application. The book explores topics such as:

  • Why water should be more expensive near sensitive environmental locations,
  • Ways to set initial allocations of water rights,
  • The role of regulatory oversight,
  • The prerequisites of a water market, and
  • How to counter objections to water markets.

The culmination of a decade of investigation, this book combines explanation, examples, and detail to inform policymakers, large water users, environmental organizations, researchers, and a thirsty public.

Keywords

Environmental policy Natural resource economics Operations research Trading systems Water allocation

Authors and affiliations

  • John F. Raffensperger
    • 1
  • Mark W. Milke
    • 2
  1. 1.RAND CorporationSanta MonicaUSA
  2. 2.Department of Civil and Natural Resources EngineeringUniversity of CanterburyChristchurchNew Zealand

Bibliographic information

  • DOI https://doi.org/10.1007/978-3-319-55008-4
  • Copyright Information Springer International Publishing AG 2017
  • Publisher Name Springer, Cham
  • eBook Packages Earth and Environmental Science
  • Print ISBN 978-3-319-55007-7
  • Online ISBN 978-3-319-55008-4
  • Series Print ISSN 2211-0631
  • Series Online ISSN 2211-0658
  • About this book