Over the last few years the growing problems of water scarcity and water pollution
have induced ever increasing attention towards the application of market mechanisms
based on tradable permits in the water sector, similar to those adopted for air
pollution. In spite of the growing interest surrounding this instrument, a general
critical valuation of the application of tradable permits for water management is still
missing in the literature. This paper aims to fill this gap by critically analysing the
experiences of various countries who have adopted tradable water permit
programmes, underlining both the advantages and disadvantages that have emerged in
each case, in order to provide useful indications for possible future applications in
other regions. Despite the merits of tradable water permits and their success in some
contexts, the case studies analysed highlight the existence of significant difficulties
during implementation, which can prevent the full functioning of such an instrument