What lessons might Chile and the US learn from each other about how to promote water markets and environmental flows and why?
In many parts of the world, governments face dilemmas of a reduction in water supplies and an increased demand for the water resources due to the growth of population and income levels. In the year 1981, Chile passed a free market protocol on water as a strategy to deal with the increased demand for water. Since its implementation, the country has become recognized as a most experienced country in the strategy of free markets. The strategy of treating water as both a private property and a commodity that can be sold is referred to as “Chilean Model” (Bauer& Carl P.148). The economic advantages of markets are being enhanced and incorporated in the efforts of conservation and protection of the environment.
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The Chilean experience in water markets can give valuable information, especially in meetings sessions on water resources. For instance, the free market strategy to recognize water as a useful resource is important in the management process of water management. Because the water code that was passed in the year 1981 was an illustration of economics and changes in the market. A number of people in the world have raised a discussion on whether or not the changes in China on water usage has been a success (Bauer& Carl P.148). The predominant perception, especially to the government of the United States, is that the model has been successful in the water markets.
The predominant perception among the governments outside Chile is that the use Chilean strategy as a model of managing water resources has resulted to positive implications. Similarly, economists in many organizations and other financial institutions have urged the governments in other countries and especially the United States to follow the same strategy in their water reforms. Since the early 1990’s many proponents have enhanced the description of the strategies adopted by Chile in both America and in other areas concerning water administration. Although there have been some errors in the strategic plan, the main tendency has been to emphasize on the advantages of the plan.
The water plan in Chile has been different from other countries in a number of ways. For instance, water markets in other nations have been a significant instrument within the context of laws and regulations (Swift et.al P. 116). However, this order is reversed in Chile in that management of water resources is carried out in institutional markets shaped for the water merchandise. The resulting structure has been established in the portrayal of free markets with effective rights over ownerships. Besides the strategy has resulted in economic autonomy and weak regulations from the government.
The experiences of America with the storage and sale of water as a strategy to meet increasing demands offer lessons to Chile because the two countries have different political and economic systems. The experience of the United States has been longer to define the market allocation of water. The case in America has been influenced by policy debates resulting to an emergence of ways in which foreign ideas adapt to the realities that exist in local countries. The case in Chile was an indicator of the connectedness between approaches in the market and institutions for sustainability. Chile as a country can learn several lessons from America since the country had a longer experience of such approach. In 1970, the existing political and economic factors that acted as barriers to the United States in the establishment of canals and dams for water supplies. Through the strategy, America was able to deal with water shortages and meet the existing demand among the populations.
According to the water reforms in the United States, it is evident that international organizations such as the World Bank have played a significant role in the reforms. Chile has been able to learn from the functioning markets in America. The country has the most developed markets in the world. The government of Chile realized that institutional arrangements and other competing user play a crucial role in dealing with the issues of water scarcity. As a result, Chile was able to establish a comprehensive framework to analyze and compare water markets.
The water markets in the developed nations are advancing in the initiatives to promote the use of water resources in efficient ways (Swift et.al P.114). The consequences of the policies are recognized as having significant interrelationships. Water markets are likely to put limits on the effectiveness of water policies to restore the natural regimes and promote sustainable use of natural resources. For instance, water markets in the United States have indicated that it is important to involve the users in making decisions. Through the models, governments have developed mechanisms of dealing with water scarcity and to promote sustainable use of natural resources.
Another lesson from the water markets in the United States is that there is the need to empower water users to deal with the risks associated with usage of water. Farmers have been able to understand the scenarios of water scarcity and the risk that comes along with periods of drought. Individuals and governments have been able to develop strategies to promote maximum returns on the usage of land. The water reforms were possible because the irrigators had the perception that the market conditions would help them in good management of their farms.
What lessons do the 2 cases offer to international debates about those topics?
In the debates relating to water markets in Chile, America and other countries have been able to develop water reforms resulting to greater prosperity and development (Bauer& Carl P.639). In International debates, water markets allow the users of water to make complex decisions about water usage. Since the reforms that occurred in the 1980’s and 1990’s more number of people have been able to access water resulting to increased trades. The implementation of internationally agreed reforms has facilitated water markets expansion across the connected valleys.
In both the developed and developing countries, International organizations promote market reforms which might have significant impacts. It is important to learn from the existing markets about the need to establish water banks. For instance, it is obvious that the strategy of water storage for sale to other parties can be a strategy to meet the existing demands for water and dealing with the issue of scarcity.
The longer experiences in America about water management and preservation can deepen the knowledge among people about institutional plans and the implications that they might have on systems of governance and sustainability. By reviewing Chile as the country with adequate experience in dealing with water reforms, the two countries have the longest experience in both irrigations and in other uses of water resources. The main argument is that water allocation does not have any relationship with the management of water resources. The issues that have been on the rise in the United Sates results from much competition that exists in America in terms of water usages.
Similarly, the use of water markets to improve efficient in the usage of water has resulted in sustainable practices. It is clear that governments can establish water markets as a mechanism to ensure that the citizens use water resources efficiently and as a sanction to avoid wastage of water. One of the strategies that governments use in enhancing sustainable use of scarce water is to enlighten the leaders at grassroots levels about the values of using water in a sustainable manner. Besides, the state can formulate legal frameworks as a way to manage water resources and to avoid pitfalls of the systems. In the different American States, there is an existence of different institutional frameworks to promote sustainable ways of making use of the water resources.
In the many parts of America, the conditions of drought have resulted in new terms in the agreements about agreements about water conservation strategies, through debates, the governments agreed to boost the water levels at lake Mead and lay down a strategy of sharing water between farms and the city. The government of the United States realized that promoting flexibility in the policies concerning the allocation of water would not be easy, which made them turn to the introduction of water reforms.
Political influence plays a significant part in the aspects of water markets although it is not easy to avoid the associated impacts. Limitations on diversion determine water consumption and the treatments of historical entitlements. Through the basin plan, the countries had several limitations to achieve sustainability and the water would be drowned back through a number of efforts. Almost 3000 individuals raised their opinions about the basin plan which resulted in a number of efforts to engage the community members.
In America, the attempts to move water out of the regions of irrigation and between states encountered a number of drawbacks such as the “buy backs” of water for the surrounding (Brown P.5). The efforts to overcome political barriers and move water across state borderlines required an engagement of the community to promote the living standards in rural areas. Politics formed an important part of the policies together with reforms that governed water markets. It is evident that the economic aspects of water markets have a close connectedness to good governance and political influence to make a decision on the distribution of water between states.
According to an analysis in the systems of Chile and the United States, it is obvious that the ecosystems that functions efficiently provide reliability in the flows of water and other services for human beings. In the current period, the overexploitation of water resources has posed a great threat to the ecosystems. Findings of research show that the ecosystems in the world today are used in unsustainable ways. Proponents of environmental sustainability argue that there is the need for stewardship through the alternative use of land.
Through National Water Initiatives and the lessons from the cases in Chile and America, governments have been able to develop ideas on how to recognize and protect the environmental needs. In addition, stakeholders have been able to define entitlements to water access as an authorization to have an access to water as defined in the water plan (Brown P.4). A large number of policy makers have been able to reduce the transaction costs of water trades through an efficient flow of information in the markets compliance with the legal entitlements.
In the attempts to address water scarcity, the introduction of markets on water is one of the efforts that can help to transfer from one use to another. The trade on water involves a permanent transfer of water entitlements from one agricultural usage to another. For instance, water as a resource can be used in tourism, industries and to promote the growth of industries. Water banking is a strategy in water management that gives a description of an agreement where one party stores water to transfer to a third party for payment. At most times, the water banker acts as a broker that brings the buyers and sellers together. One of the purposes of water bank is to make the transfer from low valued areas to other areas by closing the gap between buyers and sellers.
In the 20th century, improved levels of knowledge regarding water markets have accelerated water developments among other control projects globally. In the current era, water in a number of countries is harnessed for a number of uses and its values to the environment. The world’s populations have continued to increase leading to an increased competition for water resources. Through a process of innovation and adaptive management, environmental water transactions have led to advancement in water management and an efficient flow of information.
- Bauer, Carl J. “In the image of the market: the Chilean model of water resources management.” International Journal of Water 3.2 (2005): 146-165.
- Bauer, Carl J. “Bringing water markets down to earth: The political economy of water rights in Chile, 1976–1995.” World development 25.5 (1997): 639-656.
- Brown, F. Lee. “Water markets and traditional water values: Merging commodity and community perspectives.” Water International 22.1 (1997): 2-5.
- North Terrace, Adelaide, and South Australia. “Oecd Workshop on Agriculture and Water: Sustainability, Markets, and Policies.” (2005).
- Swift, Mike J., A-MN Izac, and Meine van Noordwijk. “Biodiversity and ecosystem services in agricultural landscapes—are we asking the right questions.” Agriculture, Ecosystems & Environment 104.1 (2004): 113-134.
