Comparison Of Water Markets In Multiple Countries And The Potential For Multi-Objective Optimization In The Chilean Elqui Valley
Estep, Melissa A 1 ; Kasprzyk, Joseph R 2
1 University of Colorado Boulder
2 University of Colorado Boulder
Water markets have developed around the world due to efforts to reallocate water supply and promote efficient and sustainable use of water. Although creators of water markets commonly share a desire for their markets to function in a manner that is economically productive, socially just, and environmentally sustainable, they often fall short in at least one of these categories. We compare some of the world’s most prominent water markets and examine which common regional characteristics have enabled a water market’s success and which pose challenges. Governments have approached the development of water markets with varying levels of intervention, resulting in the treatment of water as more or less of an ordinary economic good. We evaluate the possible benefits and detrimental impacts of different approaches to markets. One such market-based system is in Chile, where high competition between sectoral demands has led to a relatively active, laissez-faire water market. We provide an outline of how multi-objective optimization can inform this water market by balancing conflicting objectives and negotiating robust planning approaches to increase system sustainability.