A systems perspective on water markets: barriers, bright spots, and building blocks for the next generation
This global study applies a systems perspective to water markets, examining barriers such as scarce data and informal trading, and highlighting advances in measurement, modelling, and market design. It identifies bright spots, institutional diversity, and building blocks for future research to improve equity, sustainability, and policy performance across regions.
Subject Tags
- Groundwater
- Policy, Finance, and Markets
Abstract
Water markets are increasingly used to allocate scarce water resources, yet debates about their effectiveness remain polarized and fragmented. Drawing on interdisciplinary evidence, this paper applies a systems perspective to understand how water markets emerge, function, and vary across social‑hydrological contexts. The authors identify major barriers—including inconsistent definitions, limited visibility of informal markets, and challenges in measuring transactions and outcomes—supported by examples from Australia, the USA, Kathmandu, Oman, Spain, West Bengal, and China . Bright spots include advances in empirical measurement, modelling, and market design that integrate qualitative and quantitative data to capture complexity and improve comparability across regions. The paper outlines building blocks for the next generation of water‑market research, emphasizing institutional diversity, performance metrics beyond efficiency, and the need for a global network of observatories to track transactions, impacts, and system‑level outcomes over time.
Citation
Garrick, D., Balasubramanya, S., Beresford, M., Wutich, A., Gilson, G. G., Jorgensen, I., ... & Mendoza, K. V. (2023). A systems perspective on water markets: barriers, bright spots, and building blocks for the next generation. Environmental Research Letters, 18(3), 031001.
TNC Authors
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Karla
MNCA Graphic Designer/ Contractor
The Nature Conservancy
Email: karla.vazquez@TNC.ORG