Ulric B. and Evelyn L. Bray Seminar

Despite large investments in institutions and infrastructure, governments still have problems managing water resources. The problems include difficulty in allocating fresh water, protecting the environment from run-off, and managing impervious cover to reduce flooding. To address these problems, I will present a "smart market" approach for hydrological resources. This approach draws from other fields, including hydrogeology and modern electricity markets. The smart market simplifies the allocation process for government and users, allows full use of available hydrological data, with explicit protection for the environment. I will present separate market proposals for ground water, surface water (including reservoirs), nitrate and phosphorus, sediment, and impervious cover. If implemented, these markets should result in cheaper cleaner water, better energy management, lower flood costs, incentives for green space, and improved environmental outcomes in many ways. This work has been done with the Water Markets Research Group at the University of Canterbury, New Zealand. Bio: Dr. Raffensperger is a senior lecturer in management science at the University of Canterbury, Christchurch, New Zealand. He is a Visiting Associate in Economics at Caltech.