Water Transfers in the West Efficiency, Equity, and the Environment (1992) / Chapter Skim
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1 Pressures for Change
1 Pressures for Change
Pages 16-37
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From page 16... ...
There is an increasing consensus in the western water community that new demands must be met primarily through the reallocation of existing supplies. The use of voluntary water transfers, or water marketing, has been accepted by many members of the western water community—sometimes with great enthusiasm and sometimes with 16
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From page 17... ...
The committee acknowledges that water transfers can produce many benefits, and it documents instances where these benefits appear to have been generated. But the special emphasis here is on the potentially neglected third party effects of transfers- the impacts these changes in water allocation and use can have on the people, communities, and environments that are not typically considered parties in the transfer process.
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From page 18... ...
It is premature to offer a comprehensive assessment of the benefits and costs of water transfers, because transfer theory exceeds transfer practice. Thus the committee does not render definitive judgments about the role that water transfers should play in the future of western water allocation or how specific third party effects should be weighted by decisionmakers.
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From page 19... ...
Water marketing strategies build on the fact that western water rights have long been classified as property rights that exist independently of land ownership. Much of the West's urban and agricultural development has depended on transfers from one watershed to another, and water rights have long been transferable.
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From page 20... ...
Most western states now have some procedures to protect third parties, but existing water transfer institutions accommodate these nontraditional and new interests with varying degrees of success. Some procedures fit into the basic appropriation scheme.
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From page 21... ...
THE HISTORICAL CONTEXT Water transfers are a signal of a change in the culture of western water allocation, and this context defines how the benefits and costs of transfers are judged. Water management is moving from an era of development to an era of reallocation and more intensive management of the resource as competing demands intensify.
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From page 22... ...
To allow the early miners to reap the fruits of their enterprises, the unique legal doctrine of prior appropriation providing that the party who first places water to beneficial use has the right to withdraw as much water as he can put to that use, ahead of any other user from the same source was adopted by the courts and then by state legislatures and implicitly ratified by Congress. Prior appropriation permitted the assignment of exclusive property rights in common resources.
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From page 23... ...
We are moving from an era premised on the continual development of new supplies to a reallocation era premised primarily on the better use of existing supplies. WHY WATER TRANSFERS OCCUR IN THE WEST That water is a limited resource in the arid West becomes more apparent as the range of demands increases.
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From page 24... ...
Second, the costs of buying or leasing water, which can include political costs and legal uncertainties, must be less than the costs of other means of obtaining watersuch as contracting for water deliveries from a Public water project ~ 1 or a technological approach such as desalinization. Recent studies of western water transfers suggest that more transfers of water are occurring now, and in more areas, than ever before.
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From page 25... ...
All of these trends encourage water transfers. Continued reliance on supply augmentation would be a difficult way to satisfy these new demands.
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From page 26... ...
Recommendations are typically aimed at removing obstacles to the marketability of water rights. But as the attractiveness of water transfers becomes more widely understood, inadequacies in the laws and policies regulating transfers also become more obvious.
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From page 27... ...
New vitality in these sectors would stimulate additional interest in water transfers. Tens of millions of dollars were spent on western water rights during the 1980s, primarily in the Southwest.
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From page 28... ...
The~ i~nvestors ~ha~ve ~ retain~ed.~ ~fo~u'r ~ for~mer~'g,ove~rr~ors:: of south~we:ste~.rn~ ~states to fa'cilitate ~p.ropo~sed inte~rstate~water sales~ Western~ W'ater~ Development,~ Inc.,:~:~base~d in the~-Reno area,~ a~nd Ame~rican~ Water Developmer~t, I-nc.~,~bas.ed~i~n the Denver ~area, are two other multimillion dollar funds specific'ally desig-ned for: water rights i~nvestment. ~ : ; -~ : ~ Although investment groups such as these have supported the price of water righ~ts in the West through their acquisitions of invento~ries, they have engaged i~n~ very few profitable s~ale~s as yet.
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From page 29... ...
Irr California, there are hundreds of privately owned surface and ground water rights that could be marketed. ~ Water users and water managers in the West have a long history of measuring water in acre-feet, which is thus the primary unit used to describe water volume in this report (1 acre-foot is the volume of water required to cover 1 acre of land to a depth of 1 it)
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From page 30... ...
However, high demand for more water by California cities has led to water leases and ir~r~ovative exchange arrangements that circumvent these difficulties. TYPES OF WATER TRANSFER OPPORTUNITIES Several different types of transactions- including water leases, water banks, dry year option arrangements, and transfers of salvaged water may be used to transfer water use from one party to another.
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From page 31... ...
Part of the fees collected goes to the entity supplying the water to the rental pool; part goes to the water district to cover administrative costs. Prices are set by the water banks' governing boards and are actually well below the real market value of the water.
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From page 32... ...
Transfers of Salvaged Water Transfers of salvaged water also occur. This is a variation of a water sale, in which a city or business that needs additional supplies finances irrigation improvements in exchange for rights to use th water that is conserved.
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From page 33... ...
Additional transfer arrangements involving water conservation are sideration elsewhere in California. Other Types of Exchanges under serious conWater transfers also include exchanges in which one user trades some water or combination of water and money for another user's supply because the timing, guarantee of availability, or quality makes that supply more attractive to the first user.
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From page 34... ...
Federal and state policymakers need to ensure that water allocation laws can respond to all water use demands old and new in an efficient and fair manner. Changes in laws and policies will be required to encourage better water management among all users.
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From page 35... ...
In evaluating third party effects, the Committee on Western Water Management assumed that This issue is · reallocation of water among uses will be a principal feature in a new era of western water management, and increased conserva
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From page 36... ...
1991. Water farming in the West: The impacts and implications of longterm, rural-urban ground water transfers in four western states.
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From page 37... ...
1988. Trading Water: An Economic and Legal Framework for Water Marketing.
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