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Abstract
This paper argues that a water market is physically feasible in the existing reality of Pakistan’s Indus Basin Irrigation System at the watercourse and distributary levels. The paper starts by describing the existing system and contrasts it with ideal economic management of surface water. It then lays out the degree and extent of modification to outlet structures that would be needed to enable trading based on structure type and the scale of the water-trading region, along with a first glance at the relative costs of those modifications. The ongoing decentralization of irrigation management should support water-trading efforts.
Notes
1. 1. In our numeric example, 50 units passed by G1 and 10 units by G3 both before trading and after, implying that no adjustment was needed. This will hold for any quantity of water flowing by. Adjustments to outlet discharge need only be done in the canal reach that is actually trading, i.e. the two trading outlets and all outlets between them.