By Request: Water and the West

RoboticGhost asks: "I wondered if you heard anything about water concerns while you were out West. I don't suspect it'd be that big of a deal in lofty Aspen, but many parts of Colorado are caught in the fight for water resources. Its town against town against farmer against industry, with some armed conflicts thrown in for good measure."

I didn't hear anything about that when I was in Colorado, but I did hear a lot about water last year when I was in Southern California and New Mexico. I'm far from an expert in this, but normally when you see shortages you're looking at an effort to allocate a valuable resource by regulatory fiat (and therefore special interest political clout) rather than price. Thus, I was strongly predisposed to favor this proposal for tradeable water rights from Michael Greenstone at Brookings when I read it months ago and reading it again it still seems right.

You can imagine some very difficult water policy questions in a desperately poor country, where people being unable to acquire a subsidence level of clean drinking water is a real issue. The United States is wealthy enough that that's not a real concern -- if people are made to pay market rates to use water, we should find that there's plenty of water around for everyone to do what we really need to do.

Comments

It might be interesting to look at the relationship between urban sprawl and water usage. Do suburbs and exurbs use more water - or place more strain on water delivery systems - than dense urban areas?

Posted by Noah | July 7, 2008 12:40 PM

And still no word on either the current state of Australian basketball or ZZ Top's latest tour.

Posted by They Call Me Thunder | July 7, 2008 12:41 PM

I can't believe you are really taking this position- clean water has always been a "public utility" for the reason that without government oversight of profit the market will charge rates that are harmful to society. Look at how well deregulating electical power and natural gas has turned out- everybody's paying more and more to the point where the national economy is being impacted.
The whole point of the problems in the west and south is there is NOT enough water for all parties. Those areas were developed during a decades-long wet period and are now reverting back to their natural dryness (and possibly even dryer with climate changes). The government needs to get MORE involved to ensure that the remaining water resources are distributed fairly and are not wasted. Some areas (like Las Vegas) may need to rethink their whole development plans since the water they will need will not be available.

Posted by alameda | July 7, 2008 12:49 PM

Reading through Greenstone's proposals, it seems to me like they would run into some serious federalism issues. I don't see where the authority to in effect nationalize water rights across the U.S. would come from (even if the purpose of nationalizaton was to immediately sell off the rights). Does the federal government have the right to force states to sell water across state lines? Does it have the power to unilaterally abrogate existing water rights agreements between states? It's also not clear how one sells water rights when the amount of water available varies widely yet customers will want assurance of a predictable supply for their money, although there are probably ways around that.

Posted by Scott de B. | July 7, 2008 12:53 PM

Well that's great. I guess we westerners will just have to live with heavy industry and more mining (as they'll be the only ones who can afford water) everywhere. You can't stop after having polluted the entire eastern US, you have to get it all, I guess.

Posted by jacobus | July 7, 2008 12:53 PM

Any tradeable rights scheme is going to favor the well-capitalized over the poorly-capitalized; in other words, the urban over the rural, high-margin industries (like mining) over low-margin ones, etc. It seems highly disruptive; you'd need lots of 'transition assistance', etc. And unlike with cap-and-trade, it seems even less clear that we can forsee the consequences.

Posted by Nicholas Beaudrot | July 7, 2008 12:56 PM

Tradeable rights are to Matt what tax cuts are to George Bush, as though "special interests" are less involved in government created trading schemes than they are in legislative fiat.

Posted by Helter | July 7, 2008 1:01 PM

Here's some info on water use in the US

http://ga.water.usgs.gov/edu/wateruse2000.html

While you can find fault with Greenstone's idea, the status quo in the West with respect to water rights is absurd. Ag irrigation and the system of senior/junior/use-it-or-lose-it water rights is THE dominant water question in the West. A system that facilitated trade leading to a market that accurately priced water according to its relative scarcity would decrease waste among senior water right holders AND discourage ridiculous overdevelopment in areas with poor water supplies. There are many ways that the status quo discourages conservation of water, damages the health of riparian ecosystems, encourages farming of marginal lands, and increases costs for urban utilities (and their customers).

From the above report: "Withdrawals for irrigation were about 137,000 Mgal/d, second only to thermoelectric power nationwide. Irrigation represented 34 percent of total withdrawals and 40 percent of total freshwater withdrawals. Eighty-six percent of irrigation withdrawals, and 75 percent of the total land irrigated in 2000 were in the 17 conterminous Western States."

Posted by TheF79 | July 7, 2008 1:13 PM

You can imagine some very difficult water policy questions in a desperately poor country, where people being unable to acquire a subsidence level of clean drinking water is a real issue.

Another great Yglesias typo. Yes, "subsidence" has something to do with water, but it's not something that people want to acquire.

Posted by Dilan Esper | July 7, 2008 1:23 PM

Colorado is really a unique state with respect to water issues -- it has to do with being the "roof" of the continent. Basically, western Colorado (i.e., Aspen) gets first crack at the snowmelt every year before it filters through the rest of the western states, so even though there is not a lot of precipitation from May to October, water really isn't a HUGE issue.

The Front Range is a bit trickier. It also gets the first crack at the snowmelt, but there's less of it running off to the east, and the big cities (Denver, Colorado Springs, Boulder, Fort Collins) suck up a ton of that water before it can get to the far eastern suburbs and rural (mostly farming) areas. As a result, there is a ton of fighting between the eastern burbs and farming concerns -- these cases go straight to the Supreme Court from Colorado water court, which usually results in at least one justice being a water lawyer. Given the geography of the state (2/3 mountainous, with lots of peculiar valleys), there are also outliers like the San Luis Valley, which receives very little snowmelt runoff (it's between two ranges that run off in opposite directions).

The upside of all of this is that you don't really get the same "there's too many people using too much water to be sustainable" vibe that you get in Arizona, California, etc. It's more an issue of the "too many people" using enough of the water (from a sustainable source) that there is not a lot available for agribusiness concerns.

Posted by Joe | July 7, 2008 1:24 PM

Trading of surface water rights already exists in all Western states--it's known as "change of use." Western municipalities are routinely buying agricultural rights and changing the use to municipal purposes.

A water right isn't just a right to a certain amount of water--it's a limited right to use that water at a certain place for a certain use during a certain period of the year. This matters because downstream users are affected by the return flows of upstream users. Agricultural use typically returns a significant portion of the water to the stream, municipal use less so. Furthermore, a change in place of use can affect other users between the former and new points of diversion.

Thus, the water itself isn't simply fungible--there are positional, functional, and temporal aspects that make each water right unique. That's why a market, as proposed in the linked article, is impracticable.

And I didn't even get into groundwater and water quality.

Posted by coyote | July 7, 2008 1:38 PM

I'm a bit surprised this didn't come up in Aspen. Just a lil west of them (past the coal and silver mines) is Delta County. A nice breadbasket area, and the spot that gets first dibs on a lot of the water the rest of the western states get.

Blue Mesa, a very large Mesa, has huge snowfall yearly, and its snowmelt keeps Arizona and Southern California quenched.

But if Delta County decides to fight to keep more of its water for Agriculture, Mining or tapping into the Oil Shale. Well, what would happen? Fiscally, if they were allowed to, I'm sure they'd be using that water for those purposes, as much as possible.

By the way, I have no clue about the water rights there. All I know is there's a ton of water available there, in an otherwise very arid climate. Its that water that keeps the SW alive.

Posted by Evinfuilt | July 7, 2008 1:42 PM

I'm investing in stillsuit futures.

Posted by Tom | July 7, 2008 1:42 PM

Tradeable rights are a good long-run solution for the West's water troubles. Even better if you divide up water rights so a certain acre-footage is left in-stream.

But as some of the commenters have noted, the West's water rights system is a muddled web of first-come, first-served rights, rights tied to property rights, and in some cases rights allocated to municipalities to do with as they please. The West is the nation's biggest alfalfa growing region, even though an acre of alfalfa consumes 50–60% more water than an acre of wheat. The status quo is the product of bad laws, bad practices, and short-sighted development, such that any reform in how rights are transferred must be accompanied with a smarter way of allocating rights and policies that discourage unsustainable levels of water consumption.

Posted by Brian | July 7, 2008 1:47 PM

I'm not really sure whether tradeable water rights is a good idea. But I do know this: The process of changing our water laws will result in a brutal, decades long legal battle. In the end, only the water lawyers will win that battle.

Posted by fostert | July 7, 2008 1:58 PM

Two things you should probably see almost none of between the Kansas/Colorado border and Sacramento: farms and lawns. Until we accept that, it's not going to get any better.

Posted by Mike | July 7, 2008 1:59 PM

How long until the Rust Belt makes this a selling point? "Detroit: All the water you could possibly want."

Posted by Matt B | July 7, 2008 2:05 PM

Matt,

Have you read "Cadillac Desert"? If not you should and if you have may I recommend reading it again as I am presently doing.

Posted by Steve Balboni | July 7, 2008 2:19 PM

Frankly, I just think people living in Arizona should have to pay for water what it actually costs to procure, instead of having the government subsidize it.

For fun, look up how much the waterbill is for a household in Minnesota, and compare it to Arizona. Now compare that Arizona is a desert, and Minnesota is land of 10,000 lakes and in an average year does not suffer water shortages.

Posted by The Other Steve | July 7, 2008 2:27 PM

There are many demands placed on water and not all of them can be handled by tradeable water rights. To some extend, as pointed out by coyote, tradeable right already exist to a limited extent. Municipalities in Colorado do buy up irrigation rights and attempt to convert them to municipal use. The problem comes when that municipality isn't in the same drainage as the existing irrigation rights. The second users of that water may well be upset at their loss (secondary rights exist as well). Hunters, fisherman and the tourist industry may well be upset at the destruction of riparian vegetation and loss of minimal stream flow. What rights do wildlife and native vegetation have in this scheme? There is also the question of "beneficial use" and what it constitutes. Denver's most elite country club uses first-pass domestic water to irrigate its greens. How does that compare to the alfalfa farmer using river water to grow winter feed for his livestock? Of course, the country club, with its deep pockets, need not worry. If this scheme were instituted, one could be assured that California, with its megabucks, would quickly own the majority of the water rights in the Colorado River, and the rest of us would likely experience the Owns Valley effect (http://en.wikipedia.org/wiki/Owens_Valley).

Posted by Emrys | July 7, 2008 2:45 PM

There are many demands placed on water and not all of them can be handled by tradeable water rights. To some extend, as pointed out by coyote, tradeable right already exist to a limited extent. Municipalities in Colorado do buy up irrigation rights and attempt to convert them to municipal use. The problem comes when that municipality isn't in the same drainage as the existing irrigation rights. The second users of that water may well be upset at their loss (secondary rights exist as well). Hunters, fisherman and the tourist industry may well be upset at the destruction of riparian vegetation and loss of minimal stream flow. What rights do wildlife and native vegetation have in this scheme? There is also the question of "beneficial use" and what it constitutes. Denver's most elite country club uses first-pass domestic water to irrigate its greens. How does that compare to the alfalfa farmer using river water to grow winter feed for his livestock? Of course, the country club, with its deep pockets, need not worry. If this scheme were instituted, one could be assured that California, with its megabucks, would quickly own the majority of the water rights in the Colorado River, and the rest of us would likely experience the Owns Valley effect (http://en.wikipedia.org/wiki/Owens_Valley).

Posted by Emrys | July 7, 2008 2:50 PM

Oddly enough, I am a water lawyer in California (and no, I'm not getting rich on the disputes -- but I do make a nice living).

To start out with, the Brookings piece, like so many articles written by economists about water in the Western US, is so bad it's not even wrong.

On the infrastructure side, retail water delivery is the purest of natural monopolies. Just how many water mains do you want running down your street? There simply is no such thing as a retail water market. The supposed water markets actually advocated by people who know what they're talking about are more about inter-governmental transfers.

Also on the infrastructure side, water is incredibly difficult to move efficiently. Water transfers in California tend to be measured in the thousands of acre-feet annually. It takes an incredible amount of aqueducts, canals and pumping stations to move around that volume of water, so much that only governments tend to make that investment.

On the political side, voters around the world refuse to allow water providers to capture monopoly profits. When someone tries, either elections change the deal or riots break out. So local water agencies tend to be governments, not for-profit corporations. Governmental water managers -- who want to keep their jobs -- price water as low as they can, not as high as they can.

On the risk side, in California agriculture water is priced lower than municipal water because, among other reasons, farmers have agreed to take the first cut-back in time of drought. It's one thing for a farmer to lose a crop of avocados; it's another if a city can't keep water in its taps. As farmers agreed to take a portion of the risk of drought, they get a discount.

On the legal side, many farmers in the West get water cheaply because they OWN it. Even liberals like myself understand the value of recognizing and protecting existing private property rights. Land in the West was allocated on a first-come first-served basis (more or less) and no one seems to complain today all that much about that approach. Why should water be subject to seizure?

And on the efficiency issue -- California's Great Central Valley and Imperial Valley literally hold some of the best farmland in the world. Why not grow crops there? Why should the City of San Diego get away with seizing water from farmers instead of improving its own incredibly wasteful system?

There's lots more to be said -- like that water transfers are perfectly legal in California, they're just hard to do because moving the water is difficult. And there certainly are water users (*cough* Westlands *cough*) who are easily cast as villains. But this notion kicking around that water problems could be solved by the magic of markets (plus ponies!!) is just flat wrong.

Posted by Francis | July 7, 2008 3:26 PM

The other steve is right. I live in Tucson, and water is a small fraction of what it was in rainy and river-fed pittsburgh!

Posted by John McCain: More of the Same | July 7, 2008 3:38 PM

As the saying already goes, "water runs uphill to money". Tradeable water rights won't change that much.

Although the farming and ranching interests complain about suburban lawns, agriculture uses the vast majority of water. They have little incentive to become efficient because more efficient water use could reduce their water rights. Allowing sale of the water allows the wealthier to cut ahead of other users who have lower priority but filed their claims over 150 years ago.

The biggest political problem is that sale of agricultural water to urban areas also kills the economies of the rural towns. The former farmers & ranchers might make money but the rural townspeople can no longer provide goods and services to the farmers & ranchers, so the rural economies die. The local governments want to keep the water in the local area (e.g., for future mineral extraction activities) so they don't want a "free" market for water.

Posted by H-Bob | July 7, 2008 3:57 PM

California's Great Central Valley and Imperial Valley literally hold some of the best farmland in the world.

Except for, you know, not having an even remotely adequate local water supply for the current level of agriculture.

Why not grow crops there?

Because the current situation is unsustainable, since there's not an even remotely adequate local water supply for the current level of agriculture? It's not an "either / or". Why grow so many crops there?

Posted by mds | July 7, 2008 4:08 PM

Now that the San Francisco Bay area is in a drought, I've thought a lot about this too. On the one hand, as long as water is not seen as something valuable, people will continue to treat it thusly.

On the other hand, I am not convinced this country will continue to have a healthy enough economy that there won't reach a point where there are people who can't afford a basic ration of water. I certainly don't want water privatized, treated like a consumer good and not a right.

Posted by daretoeatapeach | July 7, 2008 4:09 PM

As a native and life-long resident of the States of the Former Confederacy, the water issues out west seemed strange to me, like proposals for Martian settlement. Spent a little time snooping. Very interesting!!

Re Federalism, etc--The 7 states that depend on Colorado Rv water voluntarily signed a compact way back in '22. Gosh!! That's before my Daddy was born; and I am OLD myself. The supposedly conservative westerners forming a pact in the supposedly republican 1920s have an authority that allocates by fiat. None of that girly liberal cap-n-trade for them.

Agriculture gets the lions share. In California they grow rice--mile after mile of shimmering flooded...desert. 525,000 flooded acres. Try calrice.org to learn why that's a good idea. (BTW, the goose hunting is great there!)

Re Mr Beardrot's question about 'tradable rights'--there is a busy market in Colorado Rv water. It is in cold hard cash. This year each 'acre-foot' cost California towns $200.00. A 'normal' household uses 1/2 acre-foot/yr.

One more amazing fact--all you clueless easterners--several Western states including Colorado make it illegal to collect the rainwater that falls on the roof of your house.

What you can learn when you have too much time on your hands.

Posted by JohnMcC | July 7, 2008 4:25 PM

'Way out west, water is an issue, too. The big ag factors tied up the islands' fresh water back during the monarchy. More recently, the courts have ruled that water is a public, not private, resource. The ag giants want to hang onto it as they transition to massive home building, but the trend is condemnation of the collection systems.

Posted by cmholm | July 7, 2008 4:26 PM

Another old western maxim: "Whiskey is for drinking, water is for fighting over."

In trying to figure out what to do about water, you have to remember that no one is writing on a clean slate. There are already rights in existence, well established in law, under a variety of old systems that may or may not be well adapted to the climate and hydrology of the modern place.

In the wet states, you mostly have "riparian rights" -- the right of a streamside owner to take out as much as he needs.

In the dry states (I'm writing from Arizona), for surface waters you mostly have "prior appropriation" -- the first to get there (in most places a Mormon farmer) can take out as much as he has historically taken, and everyone upstream from there has to leave at least that much in the stream before they take their first drop. All of the surface water was long ago appropriated. Where groundwater is concerned, historically you could pump as much as you could use, until everyone's well ran dry. In Arizona that was changed around 30 years ago to a form of "tradable rights", limiting new pumping for agriculture in the most critical basins. (The water table is still dropping, but not as fast.) A further wild card is that -- prior and senior to the cities or the farmers -- the Indian tribes have the right to take as much as they need to develop their reservations.

With all of these rights, governed by a mixture of aboriginal, federal and state law, a single rational optimal solution is easy to posit but damned hard to create.

Posted by DHN | July 7, 2008 5:19 PM

The other steve is right. I live in Tucson, and water is a small fraction of what it was in rainy and river-fed pittsburgh!

Probably due in part to the fact that its cheaper to build new infrastructure in the desert or country than it is to maintain it in places where people already live. Same with roads, schools, houses, etc... Part of the big appeal of moving to a sprawly new development are the low tax costs. Wait a few years...

Posted by RoboticGhost | July 7, 2008 5:42 PM

Interesting point that fits in this discussion somewhere...

As a Colorado resident with no water rights living in a state where all the water rights are spoken for, I cannot install a cistern or rain barrel to water my garden as I will be essentially stealing run-off from a rights holder.

Maybe that's the best way to manage a scarce resource.

Or maybe it's just a good way to make sure I'm paying someone for what literally falls from the sky.

Posted by Herb | July 7, 2008 10:50 PM

Frankly, I just think people living in Arizona should have to pay for water what it actually costs to procure, instead of having the government subsidize it.

And you apply a similarly libertarian analysis to the economics of every other kind of product and service, do you? If not, what criteria do you propose we use to distinguish things for which subsidies are proper and justified from things for which consumers should bear the "actual costs" of procurement?

Posted by Mixner | July 7, 2008 11:12 PM

It's funny to see idiot glibertarians question other people's devotion to libertarian principles even as they demand that everyone pay massive subsidies to the warmongers.

Posted by Not as stupid as Mixner | July 7, 2008 11:34 PM

The crazies have come out for the night.

Posted by Not-as-stupid is insane | July 7, 2008 11:41 PM

OK, so if I read this right, the Brookings proposal would take water-rights out of the public trust, and deregulating all water transactions across state lines.

If such a formulation is applied nationally, what are the implications for the Great-Lakes region?

I have no intrinsic opposition to applying market principles to water rights, but I'm concerned that this logic would lead to ecological damage in wet states in order to fuel unsustainable development in dry states.

Probably just my knee-jerk Michigan paranoia, because I can't pretend to be well versed in the relevant issues-- but I'd certainly want to make sure that any national water-policy adopted isn't one designed strictly for the needs of the west.

Posted by Anthony Damiani | July 8, 2008 1:26 AM

No, Anthony, your fears are well-founded. There is very little end to which people will go in the quest to take water from somewhere else and dump it on the American Southwest's deserts.

Google NAWAPA - the North American Water and Power Alliance.

Dreamed up by a huge engineering firm, Ralph M. Parsons, back in the 1960s, this monstrosity would have pumped water from Alaska (!) and northern British Columbia and dumped it into the upper Colorado River and Rio Grande systems, via thousands of miles of dams, locks, canals, tunnels and aqueducts.

As Marc Reisner wrote in Cadillac Desert:

Visualize the flow of the Susitna River, the Copper, the Tanana, and the upper Yukon running in reverse, pushed through the Saint Elias Mountains by million-horsepower pumps, then dumped into nature's second-largest natural reservoir, the Rocky Mountain Trench. Humbled only by the Great Rift Valley of Africa, the trench would serve as the continent's hydrologic switching yard, storing 400 million acre-feet of water in a reservoir 500 miles long.

The piece de resistance of the plan was an aqueduct to Lake Superior, connecting Alaskan mountains with the St. Lawrence hydrologic system. Yeah. "Engineering obscenity" hardly begins to define it.

Of course, it never really got off the drawing board - something about needing five or ten nuclear power plants just to power all the pumps, or that pesky little problem of people in British Columbia and Alaska not cottoning to people from Southern California taking their water... oh, and the price tag. Originally estimated at a ludicrously low $150 billion, it's been post-facto figured at around $500 billion - in 1979 dollars.

From the Google results, Lyndon LaRouche is the only person "seriously" proposing this debacle today. That should provide any sensible person with a reasonable estimation of its true worth.

Posted by Travis Mason-Bushman | July 8, 2008 3:37 AM