Water governance and water markets

Managing water as a scarce natural resource has been challenging due to many factors such as its uneven distribution, increased demand due to population growth, and variable and uncertain future supply due to climate change. Water governance focuses on inclusive management, coordination between various stakeholders, and integrated strategies in coping with these accentuated challenges. Economic instruments can contribute to managing water demand and therefore contribute to achieving policy goals in water governance in several ways. This chapter gives an overview of the concept of water governance and the use of economics instruments, with a special focus on water markets.