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This chapter encourages readers to think of agricultural communities in the era of climate change-induced droughts and population growth similar to when western Pennsylvania’s steel industry collapsed in the 1980s. If water must flow uphill to money, it should not leave a dust bowl behind. While this chapter’s proposals to address the effects on community build on examples of water reallocation where those effects have been addressed, both the just-transition literature and the experiences of some of the towns successfully adapting to abrupt changes in their economic tissue can offer lessons for areas suffering big water losses. In addition, privatization of water utilities shares with water transactions the concerns about the community voice being muffled by powerful interests and having less of a say in its future development because water is controlled elsewhere. Accordingly, the proposals put forward in this chapter may also inform regulatory responses to privatization.

Section II describes the landscape of water markets today, from the traditional exchange of water rights to the investment by big companies in water-related assets as climate change makes water scarcity worse. Section III analyzes potential externalities on communities as a result of water markets, particularly in today’s markets where climate change has made water attractive for big corporations. It unpacks the critiques of community externalities by scholars who believe communities should not be compensated and it evaluates the levels of government involved in decisions concerning water markets and community externalities. Section IV offers a portfolio of measures to address community externalities and offers recommendations.

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Environmental Law Institute


Washington, D.C.


Copyright held by Environmental Law Institute. This chapter is reproduced with permission.


Keiths Hirokawa & Jessica Owley

Book Title

Environmental Law, Disrupted

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