Designing water abstraction regimes for an ever-changing and ever-varying future

Before the introduction of institutional arrangements that encourage adjustment through trade it is recommended that the abstraction regime used be converted into one that accounts for return flows and allocates water according to shareholder entitlement. Seniority, beneficial-use criteria and opportunities to third parties to prevent adjustment according to pre-specified rules should be repealed. Well-designed regimes can be extended to include dam-capacity shares and allow the use of market-based instruments in delivery of water-quality objectives. Pooling can be used to lower the costs of risk management.