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Designing water entitlement systems for an every changing world Prof. Mike Young Research Chair, Water and Environmental Policy

The University of Adelaide


Design concepts Change 

Systems have evolved in a non-changing world

Concepts and Principles 1. Tinbergen – Many instruments as objectives

2. Mundell – Assign instruments to one objective 3. Coase – Get cost of changing use very low (80%) 4. Risk – Assign 100% of each type to one entity type 5. Hydrological integrity – Specify with consistency 6. Robustness – Work elegantly under extreme pressure 2


Unbundling Single Title to Land & Water Water

Land Tradeable Rights

Entitlement Shares in Perpetuity

Delivery Capacity Shares

Bank-like Allocations

Delivery Capacity Allocations

Price

Use licences with limits & obligations Salinity Shares

Salinity Allocations


Pragmatic Advice 1. 80% rule – don’t be comprehensively wrong 2. Unbundle 3. Entitlements as shares 4. Allocations made to pools of water 5. Make all as fungible as possible 6. Central register guaranteed

7. Keep third party issues to plan rules not individual transactions 4


Droplets at www.myoung.net.au

Contact: Prof Mike Young Water and Environmental Policy Email: Mike.Young@adelaide.edu.au Phone: +61-8-8303.5279 Mobile: +61-408-488.538

www.myoung.net.au


Designing water entitlement systems for an ever changing and ever varying future