Markets for Water Quantity and Quality: Addressing Water Scarcity and Pollution in Southern Alberta

Where water resources are scarce and water quality is diminishing, market–based instruments have better potential than government regulation alone to increase the efficiency of resource use, to reallocate water to other uses and to improve water quality in an efficient and equitable manner. The SSRB is a region in Southern Alberta known for water scarcity, growing competition for water and, an increasing threat of pollution by point and non-point sources. This research has addressed the perceptions of stakeholders about proposed system of water quality trading to supplement the existing system of government regulation and water trading. A survey was structured to examine stakeholders’ perceptions about (1) resource status; (2) their rights and responsibilities under current system of administration, and (3) their rights and responsibilities under the proposed system. Survey results revealed stakeholders concerns about the ability of both existing and proposed systems to secure their access to water if annual water supply continues to decrease. Despite concerns about increasing scarcity respondents did not perceive transferability of water licences as important due to lack of trading experience and existence of regulatory barriers that impede markets and discourage participation. Reluctance to explore markets could have been as well related to the high risk of losing the unused water. Under the proposed system stakeholders’ perceptions of their abilities to secure rights pertaining to water quality improved. However, obtained data were insufficient to judge with certainty the applicability of the proposed system in the region. Results were inconclusive to determine the extent and origin of non-point source pollution by agriculture. Also, research is needed to determine how elimination of potential institutional barriers, i.e. a risk to lose water and inability to maintain private licences to instream flow, would influence stakeholders’ perceptions about their rights and responsibilities under proposed system