1. Water Markets & Tradable Permits Sopheak & Huy

2. Our Focus Water Markets & Transferable Permits Water Auctions Tradable Pollution Permits Lessons Learnt 2

3. Water Markets & Transferable Permits (1) Water markets & transferable water rights: Sales of water allocations Applications: Surface or ground water; seasonal or permanent rights transferring 3

4. Water Markets & Transferable Permits (2) Functions: Water transferred from lower- to higher- value uses Making the strong property rights of existing holders approachable A cheaper way for communities/farmers to obtain water Used by environmental champions 4

5. Water Auctions Public authorities: Water available to the highest bidders at public auctions Water lots: Daily, weekly, seasonal or annual basis Auctions: Useful VS Conflicts of Interest 5

6. Trade Pollution Permits (1) Individual polluters: Buy and sell quotas of emission Conditions for successful water markets and auctions: A clear and permissive legal framework A procedure for considering the impacts of these trades on the 3rd parties (compensation) Recognition of the potential environmental impact of trades and solutions 6

7. Trade Pollution Permits (2) Physical means of transferring waters b/w potential users Strong provision by Government for effective market operation Regulation to avoid monopoly 7

8. Lessons Learnt (1) Charging systems: Vulnerable groups protected Mechanism for initial allocation of rights: Fair, equitable, and effective Efficient and effective auctions in some situations ($ vs water allocation) Administrative costs may outweigh benefits => Make the trading systems less complicate 8

9. Lessons Learnt (2) Markets: High value use & assist conflict resolution Water auctions: Grant permission water allocation under competitive conditions but must prevent monopoly Markets = Democratic system 9

10. The End! 10