The Role of Water Markets in Adapting to Climate Change
Designing water markets for climate change adaptation
Water markets have the potential to lessen some costs of climate change. However, they need to be designed to address the unique institutional and physical features of water.
In this Perspective, we discuss the role water markets could play in adapting to climate change and outline opportunities for moving forward. We draw on the environmental economics literature to highlight past challenges with water markets and environmental markets more generally, and identify opportunities for water-specific market design.
We argue that water markets will serve to improve adaptation if they are designed with these key features in mind. Global climate change will continue to reconfigure water resources and lead to more extreme events. Water markets may provide a low-cost adaptation tool. This Perspective discusses the opportunities and challenges for surface and groundwater markets to manage water resources.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.