Awash in Waste, an Economist article in the April 11, 2009 issue identified the two fundamental attitudes toward water, water as a basic human right and water as a marketable commodity. The author added to the discussion a third option, cap and trade.
Cap and trade, an approach much debated as a solution to carbon emissions, gets little attention as it applies to water. The article mentioned Australia as one country that instituted cap and trade with its farmers. Each farmer has an allocation of water. If a farmer elected not to use the full allotment, he or she can sell a portion of the water right (usufructory right) to another farmer. Usage rights have the aim of productively applying the resource. Regulated by an honor system, Australian farmers have experienced abuses from those who exceed their allotment. Furthermore, the system perpetuates the status quo and historic, inefficient water use. Despite shortcomings, the author foresaw the potential of usage rights in countries such as China and India, those without a framework for more sophisticated, legal structures.
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