Water Rights

Tradable entitlements to use water, markets of the dry west and a looming scarcity asset.

Overview

In the western US, prior appropriation ties rights to seniority, first in time first in right, and rights can trade separately from land. Australia unbundled water entitlements from land in the Murray Darling Basin, building the largest market, with allocations versus entitlement structures that survived drought and basin plan fights. Prices spike in drought, senior Colorado River shares and California districts trade at thousands of dollars per acre foot, agriculture holds most rights, and cities buy. Chile runs its own code. Speculation limits and anti speculation proposals follow investor interest, and water stays local, illiquid, and politically hot, a market where price is scarcity politics made numeric.