Nature markets refer to a type of market-based mechanism that aims to incentivise the conservation and restoration of natural ecosystems, such as forests, grasslands, and wetlands. These markets typically operate by creating financial value for the ecosystem services that these natural areas provide, such as carbon sequestration, water filtration, and biodiversity protection.

In the context of agriculture and water, nature markets can also play a role in addressing issues related to water management and conservation. For example, water markets refer to the buying and selling of water rights, which are legal entitlements to use a specific amount of water from a particular source. Water markets can be used to allocate water resources among different users, such as agricultural producers, municipalities, and industries.

In terms of governance, water markets are typically regulated by government agencies, which are responsible for establishing the rules and procedures for buying and selling water rights. These rules can vary significantly depending on the location and context of the market. For example, some water markets may be open to any willing buyer and seller, while others may be restricted to certain types of users or require certain types of water rights to be traded.

In the context of agriculture, participation in water markets can be an important strategy for managing water resources and adapting to changing water availability. For example, farmers may be able to use water markets to secure a reliable water supply for their crops, or to sell excess water rights when they have a surplus. However, participation in water markets can also be complex and may require a significant amount of knowledge and resources. Farmers may need to navigate complex legal and regulatory frameworks and may also need to invest in infrastructure and technology to monitor and measure their water usage.

Agriculture development is evolving around the globe as institutions and citizens continue to make sustainability a top priority. Natural resources are increasingly becoming more important, and theirthe distribution and management of them are due for an upgrade. In particular, water market governance and participation. The water market has been managed through private entities with limited entry and transparency. Leveraging a distributed ledger would mean that thethat same data and transactions would be visible to everyone simultaneously; those same transactions would be visible to everyone at the same time, eliminating information asymmetry.

This is where Water Ledger can help farmers by making it easier to manage their water resources whilst at the same time help regulators ensure that all water market participants are compliant to the many business and operating rules.

Civic Ledger, in partnership with FNQ Growers and Inclusive Growth Partners, are working with the Cooperative Research Centre for Developing Northern Australia (CRCNA) to deliver the Scaling Next Generation Water Markets in Northern Australia project to explore the interconnectedness between water market design and institutional governance goals to address water security and social equity issues relating to water access.

Civic Ledger will do this by testing the paradigm of next generation water markets at scale by moving the Mareeba-Dimbulah Water Supply Scheme (MDWSS) in the Atherton Tablelands, far north Queensland, to its blockchain-enabled water market and trading platform – Water Ledger, a Hedera-based platform for the trading and accounting for water entitlements and allocations.. In doing so, MDWSS will create “a strategic research test-bed" that has applicability across Northern Australia for real time continuous water accounting and trading to evaluate and validate the linkages between transparent governance frameworks and the design of next generation water markets.

In Civic Ledger’s view, in order for there to be impactful change when it comes to governance and sustainability, there needs to be a paradigm shift between water market design and institutional governance goals. A key path to this transition is designing a water market from the bottom up to empower market participants to lead the management or sharing of water entitlements at “place”. Water is inherently local, and shifting to community water exchanges whereby market rules are transparent to all, leads to increased confidence and trust in the water market information.

“The current view of water market governance arrangements is that business and operating rules are very complex with concern that manipulation and speculation is taking place due to lack of price discoverability. Finding up to date water market information is very expensive and often deters smaller farmers from entering the water market. Additionally, water markets are made up of a mix of public and private exchanges built from legacy information systems that do not interoperate so it is difficult to trust water market data as there is no “one source of truth”.

This is where Water Ledger modernizes water markets by facilitating an exchange or trade between a buyer and seller to create an immutable record of all transactions for all water market participants to view. For each transaction, there are a set of conditions and rules that are set out through the Water Plan for the particular Water Scheme for a trade to be successful. Water Ledger automates these conditions and rules to ensure that each trade is compliant to these rules therefore reducing counterparty risk between the buyer and seller as through the Hedera-based platform, a buyer can verify that the seller has ownership over the volume of water they intend to trade including how much water they have in their account.

Water Ledger is built on the ideology of decentralization, so partnering with Hedera and the Guardian came very naturally. This being built on a distributed ledger will help improve water management and its allocations by implementing a publicly verifiable system. There needs to be a clearer way to define water rights and make them more transferable and enforceable; taking that leap from traditional spreadsheets and proprietary centralized databases to the Hedera network.

While working on Water Ledger, Civic Ledger and the team realized they needed a network that would be able to handle a high throughput of transactions and volatility. They also were looking for a ledger that focused on energy consumption and had a sustainability alignment of their own. Finally, they knew they needed a community around a solution to help them navigate their path. These align directly with Hedera’s values.

Civic Ledger looks to increase the value of the water community and bring more trust between farmers, industry and government. By verifying all water trade transactions and updating government information in real-time, you get more public interest and participation, leading to more accountability by regulators and operators. Water Ledger interoperability between parties is a gateway to a common and immutable shared water resource platform to create indisputable accountability between the water we have, the water we use and the water we share.