Tradeable Rights for Water Abstraction

The Environment Agency has a statutory duty to secure the proper use of water resources, which is now considered inter alia to include an economically efficient allocation of resources as far as is possible within the current legislation. This paper considers the practical extent to which water rights can be traded within the existing system of regulation as a means of (a) improving the economic efficiency of resource allocation, and (b) satisfying customer demand for additional supplies. Outline proposals are also made for deregulation of current legislation to encourage further trading through less restrictive regulation.