In the semi-arid western United States, the effects of climate change on scarce water resources are already being felt. In addition to experiencing warmer temperatures, many parts of the region are seeing shifts in the quantity and timing of winter precipitation and runoff. These changes are creating significant challenges for existing water management institutions and infrastructure. While many strategies are being devised to help cope with these circumstances, water markets have gained attention from scholars and managers alike as a means to enhance flexibility in water management under increased supply variability. In this chapter, we first present a brief history of water allocation in the western U.S. and explore how water markets function within the region’s existing water governance system. Then, to illustrate different approaches to market design and implementation, we present two case studies of river basins in the western U.S. with active water markets. Finally, we draw on these cases to speculate on the challenges and opportunities that water markets present as a climate change adaptation strategy in other semi-arid regions with similar water rights systems and climate impacts.

Koebele, E., Singletary, L., Hockaday, S., & Ormerod, K.J. 2021, What Role Can Water Markets Play in Adapting to Climate Change? Evidence from Two River Basins in the Western United States, In John C. Duerk (Ed.) Environmental Philosophy, Politics, and Policy. Lanham, MD: Lexington Books.

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