Is your region water-market ready? Together with the Daugherty Water for Food Global Institute, we built a scoping tool to help you answer your water market readiness based on five key metrics.
There is growing interest in water markets as a tool to mitigate the impacts of water scarcity on agricultural producers. Spikes in the demand for water transfers may be unanticipated. Realizing the full benefits of transfers requires rapid initiation and completion of transactions, including legal and administrative obligations as well as financial ones. In regions with interest in formal water transfers and limited or no experience of such transactions, it is desirable to be able quickly to evaluate readiness to implement a market.
Five key factors must be considered: severity of the water risk; legal readiness; administrative readiness; heterogeneity of water values; and infrastructure readiness. In this report, we demonstrate how scoring a region using these five metrics will give a quick determination of whether market deployment is likely to be successful, and on where future market preparation activities should focus.
An important potential application of the toolkit is in the development of “pop-up” markets. Such markets could be deployed at short notice in response to changing local conditions and the opportunity to generate value for water users.
Download the full report here.