“Water Markets and Water Governance”.
There is urgency in the need to respond to global warming and climate change with its accompanying consequences of extreme weather events, including the potential for prolonged water shortages. These shortages can lead to major impacts on food production. Japan, which depends so much on foreign food production, is by no means immune from abnor-mal weather and related crop failures.
In order to cope with such problems, market-based techniques such as “water trading” and “water banking”, in which the incentives are provid-ed to help manage water resources, have become widespread since the early 1980s. These techniques allocate water between competing de-mands and facilitate the transfer of water from low-value to higher-value uses, water trading and water banking are considered means of address-ing failures in previous management of scarce water resources through poor water governance.
On the other hand, a water market approach also has some weak points. Although its strengths lie in economic efficiency and risk man-agement, there are also sometimes deleterious effects on both the environment and on rural communities. These problems are currently called “third-party effects”.
At present, the water market is regarded as one element of water gover-nance and can be thought of as a trial based on sound science, planning and citizen participation. In other words, it is insufficient now just to al-locate water on the basis of economic efficiency as it is also necessary to consider the public and common goods.
These collected papers clarify the present conditions and future pros-pects of water markets and water governance in the world.
