Agriculture Reference
In-Depth Information
the joint profit of the system. Depending on the case, these negotiations
could be transformed into permanent agreements that would suppose a
change in the space and time distribution of the resources.
4. CONCLUSIONS
The economic literature contains many examples of how transactions
between agents can give rise to efficient allocations and improvements in
the Pareto sense. However, allocation of water in Spain has followed
procedures very distinct from those recommended by Coase. Thus, in this
country water rights are allocated rigidly according to administrative
regulations. As a result, exchanges are the exception rather than the rule,
and new downstream demands at subsidised prices can be promised by the
authorities without taking into account their real upstream effects.
Although there are clearly important reasons to question the capability of
the market system to efficiently allocate a resource such as water, it is no
less true that there are many situations in which the re-allocation of rights
could be beneficial for society as a whole.
As a consequence, there is a wide field of study available to us
regarding possible exchanges of water rights between one activity and
another. In this chapter, we are particularly concerned with the possible
benefits of these transactions, rather than the legal or institutional form
used to bring them about. We would simply remark that, in general terms,
any legal reform should be aimed at ensuring that the agents perceive the
opportunity cost of the water they are using.
In this context, it is essential to have a correct definition of water
rights in all its dimensions,
i.e.,
quantity, quality, spatial location and time.
These last two dimensions have sometimes been ignored in the literature
and constitute the central focus of our work and its main contribution. Our
central objective is to illustrate the form in which both dimensions can be
incorporated in the search for optimum allocations. For this reason, we
Search WWH ::
Custom Search