Limits and barriers to climate change adaptation for small inland communities affected by drought

This report assesses the social, economic, and environmental costs and benefits of water trading and the implications of using ‘market-based’ instruments (MBIs) or adaptation, in particular the barriers and limitations to climate change adaptation in small inland communities. MBIs are tools that utilise a range of market- like approaches to positively influence people’s behaviour. MBIs achieve outcomes by: altering market prices; setting a cap or altering quantities of a particular good; improving the way a market works; or creating a market where no market presently exists. The project found that water trading has potential to deliver as a beneficial adaptation strategy, although for some people and industries there can be negative impacts that are not well understood.