Experiments with regulations & markets linking upstream tree plantations with downstream water users

Land-use change in upper catchments impact downstream water flows. As trees uselarge amounts of water the expansion of upstream plantations can substantially reducewater availability to downstream users. There can also be impacts on downstreamsalinity due to reduced dilution flows. In some jurisdictions afforestation requires thepurchase of water rights from downstream holders, while in others it does not,effectively handing the water rights to the upstream landholders. We consider theeconomic efficiency and equity (profitability and distributional) consequences ofupstream land use change in the presence of a water market under alternate propertyrights regimes and different salinity scenarios.