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Interest in climate change has generated many proposals for cap-and-trade programs to control greenhouse gases. Longstanding American water rights regimes may have some lessons for these new proposals. Nineteenth century eastern water law focused on the cap—keeping water instream—and particularly illustrates the importance of mobilized constituencies in any program that entails capping resource use. Western water law focused on individualized and supposedly tradable rights, and its experience shows especially the significance of rights-definition both for the content andfor the tradability of rights. As with water rights, both content and tradability in the new rights regimes are likely to match only imperfectly the goals that we want a cap-and-trade program to serve. For that reason, the historical experience of both water regimes also suggests the important role that surrounding and supporting institutions will play to facilitate trade under imperfect circumstances, and to reassure participants of the standards, accountability, and acceptability of the cap-and-trade regime.
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