Market Design

effective market design

A water market that caps total water use, allocates portions of the total to individual users, and allows users to buy and sell water under the cap, is a promising tool for basins seeking sustainable management.

While the benefits of a cap-and-trade system for both water users and regulators are potentially very large, creating a functioning market is not easy. The most important and difficult elements to get right are the rules and structure of a market, elements which must be tailored to local conditions. Capping and monitoring pumping, generating buy-in from diverse stakeholders, and guarding against cheating and adverse impacts are essential.

EMS specializes in facilitating a stakeholder-centered process of market design that promotes flexibility.

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