Groundwater Trading
Natural Resource Management Standing Committee, 2002
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About the publication
The ARMCANZ/ANZECC High Level Steering Group on Water (HSLG) has identified a number of issues, which are considered to require national attention in order to improve the level of groundwater management. They are related to the following principles associated with sustainable use:
- Groundwater allocation and use are within environmentally sustainable limits
- Groundwater use is efficient, and
- Groundwater quality is protected to ensure the resource is suitable for its proposed use.
As a means of dealing with the issues, a project titled "Opportunities for Improving Groundwater Management in Australia" was developed by the HLSG. The project was divided into four sub-projects addressing issues of: environmental water provisions, groundwater trading, managing over-allocated systems, and groundwater quality protection.
This report addresses the second issue: Groundwater Trading. The HLSG has identified a need to propose policies related to groundwater trading to enable jurisdictions to improve groundwater management.
Groundwater trading is a market-based instrument that can be used to reallocate scarce resources to uses with higher economic benefit, to achieve more efficient use of water resources and to assist regional economic development. The concept has been developed for some time, but has not been applied to anywhere near the same extent as with surface water, apart from in a small number of local areas. There are difficulties involved in introducing trading effectively to groundwater, as there are a number of technical, social, and political impediments which are both in common with surface water, and also peculiar to groundwater.
This project is aimed at clearly identifying the benefits of groundwater trading, and, examining why trade has not occurred to a greater extent, and what needs to be done to increase trade. In doing this it hopes to assist jurisdictions with developing strategies, guidelines and rules to overcome the difficulties and impediments to trade.
Groundwater trading concepts were initially presented as a discussion paper for a workshop at which the policies in this document were developed.
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