Water Markets

I know what I have given you... I do not know what you have received.

Antonio Porchia

Argentinian poet (1885-1968)

what is a water market?

A market is a platform for transactions in which something of value may be exchanged.

A water market extends this idea to water.

Water markets began emerging in earnest 25 years ago, and are a global phenomenon – with examples in the Americas, Europe, Africa, the Middle East, and the Asia Pacific. The majority focus on the trading of water use rights – permanent, seasonal (spot market), and temporary trading.

derivative water products

As water rights markets mature innovative derivative products are emerging.

Forwards – contracts for an temporary water trade at a set price with a delivery at a future date

Carryover leasing – contract to lease storage rights for a defined period of time

Call options – contracts giving a buyer the right, but not the obligation, to buy a known volume of water at a known price at a specific date in the future

Delivery rights – the transfer of a right to have water delivered to a landholding.

other water markets

There are also new forms of water markets emerging.

Water efficiency– the trading of water efficiency savings for use/offset either permanently or temporarily.

Water quality– the trading of water quality improvements for offset either permanently or temporarily.

Water services – where consumers use a market to purchase water and wastewater services from service suppliers.

Water certificates – these are emerging markets that monetise the increase in water supply through catchment restoration.

how big is the market for water markets?

The annual transaction value of established water markets is in the region of $20bn a year, but …

  • participation rates are low
  • not all countries are included
  • other forms of water products/markets are only beginning to emerge

Therefore, the actual value of water markets has the potential to be significantly higher.

$ 1 bn
water rights
$ 1 bn
water services
$ 1 m
water efficiency
1
quality markets

where can i find water markets?

We have built up this map over a period of time based on our knowledge, publications, and media reports.

It is not complete, and we would like your help to improve it. If we are missing something, or if you have any insight to share please get in touch.