ECONOMIC INCENTIVES FOR WATER CONSERVATION ON THE MONTEREY PENINSULA: THE MARKET PROPOSAL

摘要

Literatures on price-based urban water conservation and on market-based mechanisms to manage natural resources suggest that market-based management of urban/suburban water use may be feasible. A market-based proposal that emerged from a water shortage on California's Monterey Peninsula is presented. In the proposal, conservation incentives arise both from an ability among end-users of water to reduce consumption and sell use- rights to water, and from a penalty price for consumption in excess of one's use rights. The amount of water associated with use rights is capped and varies according to hydrological, meteorological, eco- logical, and other criteria. Requirements for further study of the proposal are listed, and the role that similar market-based mecha- nisms could play in urban water management is discussed.