Cap and trade has been adopted in Australia's Murray Darling system since the mid 1990's. Basically, under the constitutional provisions and water laws in Australia, this is a cop-out. The ownership of water in Australia is vested in the State Governments, hence the right to share or restrict water use is under State Government control. But to avoid charges of partisanship, the State Governments have refused to directly control individual water use, rather they have imposed an overall cap on water use and encouraged trade (and profiteering) between licensed water users. The claim is that the market will allocate more efficiently. But the reality is that the market is blind to social and environmental objectives. The real outcome of cap and trade is to reward those who were the first to take up water rights after the expropriation of water by the State. Equity in sharing?: that is possibly a prejudiced view.
Published by Hugh Milner, Water Resources & Environmental Consultant
Cap and trade has been adopted in Australia's Murray Darling system since the mid 1990's. Basically, under the constitutional provisions and water laws in Australia, this is a cop-out. The ownership of water in Australia is vested in the State Governments, hence the right to share or restrict water use is under State Government control. But to avoid charges of partisanship, the State Governments have refused to directly control individual water use, rather they have imposed an overall cap on water use and encouraged trade (and profiteering) between licensed water users. The claim is that the market will allocate more efficiently. But the reality is that the market is blind to social and environmental objectives. The real outcome of cap and trade is to reward those who were the first to take up water rights after the expropriation of water by the State. Equity in sharing?: that is possibly a prejudiced view.