The first water market in Iran’s drought-hit Central Plateau will be opened in Ardakan County of Yazd Province in the near future, planning and economic affairs deputy manager at Yazd Regional Water Company said.
“The dwindling groundwater levels in recent years in the parched region is a serious cause for concern and setting up water markets where buyers and sellers trade water rights through short- and long-term leases is likely to help better manage dwindling resources,” Hossein Kosari was also quoted as saying by ILNA.
“This system permits farmers to buy and sell water that can be within catchments, between catchments or along rivers depending on actual need,” he added, noting that water trading has become a vital tool for farmers in many countries such as Spain, Australia and the US.
Geological studies warn that the shortage of this natural resource in Iran is worsening despite having a network of rivers, most of which originate in the rugged mountain regions and flow into interior basins. Nineteen rivers flow along Iran's international boundaries and are shared with six neighbors.
"These markets encourage more efficient water use," he said, adding that well-structured markets can augment water conservation efforts that have made little progress.
Such markets help the allocation of more water to productive economic sectors. The farming sector, for instance, uses more water relative to its economic output than other sectors.
Kosari noted that in some areas in Ardakan such as Chah Afzal, we have seen a 30-cm decline in the groundwater level per year.
If the trend continues, the wells will eventually dry up and have a serious negative impact on agriculture in the region, he warned.
Smart Meters
The official explained that the installation of smart meters has helped reduce water consumption in the agro sector.
If farmers draw water above the volumes specified for them from their own wells, electricity will be cut off automatically and they will not be able to draw water until water and electricity inspectors check their consumption.
Experts say it is imperative to seriously pursue measures in the farming sector to curb waste and the inefficient use of the valuable resource that has emerged as a very serious problem in most countries, rich and poor.
The measures include setting up water markets, limiting the cultivation of water-intensive crops, modernizing farming systems and improving agricultural methods. About 90% of Iran’s annual water consumption (100 billion cubic meters) are gobbled up by the agro sector.
Ardakan is the second major city in Yazd Province. It is 60 km from the city of Yazd and has dry weather. It is famous for sesame products, including sesame oil, Ardeh (ground sesame) and Halva Ardeh (a sweet dense confection made from sesame paste).
Frequent droughts, lack of resources and poor quality of water are among the problems facing Ardakan for years. The excessive harvesting of groundwater has made a bad situation worse.
The government had been mulling the formation of water markets since 2016.
Kosari said a water market was opened in Khorasan Razavi Province in 2021 and its effects are being studied so that similar markets can be launched in other regions.
Comparing two types of trade in the water market, experts say short-term transfers lessen the economic impact of shortages during drought by shifting water to activities and places where the lack of water will have serious consequences.
Long-term arrangements entail risks for water buyers, if water demands do not match forecasts. Furthermore, they usually require storage of surplus water during wet years that is very costly.
Water markets will very likely attract greater attention, as water deficits become more frequent and intense, he said.
Regional-Friendly Measure
Such markets constitute a regional-friendly measure that can help alleviate scarcity, and it is for this reason that academia, conservationists and water experts are calling for and support such measures.
When consumers and those in charge concur that water is a precious economic commodity, regions can make efficient use of market instruments to flexibly reduce overexploitation of existing resources, rethink consumption patterns and increase efficiency.
An added advantage, he noted, is that when jurisdictions move from a centralized allocation of limited surface and underground water to market instruments, users are likely to be more cautious about the valuable resource and consume it with utmost care.
This, however, does not imply that governments have no role when water markets are in place. Public authorities have to make sure that water rights are well defined, secure and reflect actual use pertinent to buyers and sellers.
Referring to multiple constraints, Kosari said the cost of transporting water is another challenge to the success of water markets.
Water is heavy and transportation costs are high relative to its value. Consequently, trade is often highly localized or restricted to areas with well-developed water infrastructure.
The potential economic and environmental benefits of water markets make them valuable.
As climate change threatens to aggravate the disturbing mismatch between water need and availability, water markets hold a promise of improving efficiency and sustainability of water use.
