Double trouble: The importance of accounting for and defining water entitlements consistent with hydrological realities (Conference title: Water Trading in the MDBC: How well is the market functioning?)

When water entitlement and water sharing systems are mis-specified, that is specified in amanner that lacks hydrological integrity, inefficient investment and water use is the result.Using Australia's Murray Darling Basin as an example, this paper attempts to reveal theeconomic consequences of entitlement mis-specification. Options for specification ofentitlement and allocation systems in a way that has hydrological integrity are presented.It is reasoned, that if entitlement and allocation system were set up in this manner theresult would be an efficient allocation regime that would autonomously adjust to climaticshifts, changes in prices and changes in technology whilst maintaining environmentalintegrity.