Water Usage and the Value of Water

Excessive water usage can drive water scarcity. Markets could help curb water use.

Water markets are a potential economic solution to water scarcity in which economists assign a value to water use under the premise that when something has a dollar value, people are more likely to conserve it.

The markets function like the stock market or carbon trading where usage rights and quantities within a watershed can be traded among voluntary stakeholders. They can help water managers plan for sustainable resource use by negating the need to bring water from far off sources into a watershed or service area.

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