PRICE BEHAVIOR IN THE WATER MARKET OF NORTHEASTERN COLORADO1

ABSTRACT Past prices of Colorado-Big Thompson water shares were analyzed using an asset pricing model which incorporated the growth rate in real returns to irrigation water and the value of potential urban water uses. A real growth rate in the returns to irrigation water was estimated at 5.3 percent. Nevertheless, market values for water shares have exceeded capitalized agricultural values since 1969. Historically, urban use potential was heavily discounted, but the implicit discount rate fell rapidly in the last decade. The expectation that water shares will eventually be sold to municipal or industrial consumers now appears to be reflected fully in water prices.     

WATER TRANSFERS AND THEIR IMPACTS: LESSONS FROM THREE COLORADO WATER MARKETS1

ABSTRACT: This paper presents an analysis of the effects of different institutional arrangements and economic environments on water markets. Characteristics of water rights transfers in the South Platte Basin of Colorado and transfers of shares of the Northern Colorado Water Conservancy District (NCWCD) are compared to show how different institutional arrangements can affect the types and size distributions of transfers. The characteristics of water rights transfers in the prosperous South Platte are then compared with water rights transfer characteristics in the economically marginal Arkansas River basin of Colorado to identify the effects of different economic environments. Finally, the economic losses from reductions in irrigated acreage resulting from water transfers are estimated for the South Platte and Arkansas and compared with purchase prices by municipalities. Transfers in the South Platte were to new uses in the same basin, while more recent transfers in the Arkansas were to out of basin users. Transfers of South Platte rights and especially NCWCD shares were small and continuous over time, while transfers in the Arkansas were dominated by a few very large transfers. The negative impacts are judged to be more severe in the Arkansas basin than in the South Platte. Purchase prices paid by municipalities substantially exceeded capitalized transitional losses in the selling areas. In the South Platte, gains and losses were in the same basin, while the Arkansas absorbed the losses, with the benefits going to the purchasing basin.     

The Water Market for the Middle and Lower Portions of the Texas Rio Grande Basin1

Leidner, Andrew J., M. Edward Rister, Ronald D. Lacewell, and Allen W. Sturdivant, 2011. The Water Market for the Middle and Lower Portions of the Texas Rio Grande Basin. Journal of the American Water Resources Association (JAWRA) 47(3):597‐610. DOI: 10.1111/j.1752‐1688.2011.00527.x Abstract: Regional water management on the United States’ side of the middle and lower portions of the Rio Grande basin of Texas has been aided by a functioning water market since the early 1970s. The water market operates over a region that stretches from the Amistad Reservoir to the Rio Grande’s terminus into the Gulf of Mexico. This article provides an overview of the organizations, institutions, policies, and geographic particulars of the region’s water‐management system and its water market. In recent years, this region has experienced high population growth, periodic droughts, and a reallocation of water resources from the area’s agricultural sector to the municipal sector. Demand growth for potable water and a relatively fixed supply of raw water are reflected in increasing prices for domestic, municipal, and industrial water rights. Rising prices in the presence of scarcity and the transfer of water from lower‐value to higher‐value uses indicate that the market is operating as suggested by economic theory. Reasons for the market’s functionality are presented and discussed. Finally, suggestions are presented which might mitigate potential complications to market operations from aquifer depletion and aid the management of instream river flows.     

基于价值创造视角的公司水风险管理研究

随着全球水资源供应不确定性与需求竞争性的加剧,水资源问题已从单纯的环境问题转化为经济问题,水风险逐渐与商业风险挂钩,公司面临的水风险不断上升。公司面临着物理风险、监管风险和声誉风险等水风险,公司水价值体现在业务连续性、经营牌照、声誉与品牌价值和创新价值等无形资产中。水风险与水价值二者相互联系又相互影响,通过公司水价值与水风险评估框架,了解区分水价值的不同方法,明确风险和不确定性如何影响水的价值,并利用水工具评估和管理公司所面临的水风险以及水对公司价值的影响,帮助公司化解其所面临的水风险,实现从公司水风险管理到价值创造的转变。     

跨流域调水的公正问题——基于环境正义的分析视角

水资源时空分布不均造成的水资源短缺问题已成为阻碍区域发展的重要因素。为了应对区域间的水资源短缺问题,跨流域调水工程作为不同流域水资源优化配置的一种手段,被广泛用于解决水资源分配不均和区域需水不平衡问题。调水工程虽然短期内缓解了水资源压力,平衡了区域间用水需求,但其建设和运营过程对工程所涉区域的地方经济、地理环境、人文环境以及生态环境也造成不同程度的压力。本文通过对当前世界范围内跨流域调水工程的文献回顾,围绕跨流域调水工程所引发的社会公平正义层面的争议,借助环境正义理论的分析方法,通过对国内外调水案例的实践分析,追踪相关环境不公的现象和争议,剖析当前社会—生态冲突的产生机制。最后从我国水生态文明建设实际出发,提出以建立健全水权交易市场,构建"赋权—认同—合作"参与机制和树立"人类命运共同体"理念的解决对策,以期降低调水工程对环境和社会所造成的负面影响,推进水生态正义体系的建设。     

USING A CHOICE MODELLING APPROACH FOR CUSTOMER SERVICE STANDARDS IN URBAN WATER1

ABSTRACT: A series of reforms in the water industry in Australia has created a demand from the industry and regulators for objective methodologies to evaluate incremental changes in the customer service standards. In this paper, the use of choice modeling for estimating implicit prices associated with urban water supply attributes is explored. Results from multinomial logit (MNL) and random parameters logit (RPL) models show that increases in annual water bills and the frequency of future interruptions were the most important attributes. Implicit price confidence intervals based on the best models suggest that people are willing to pay positive amounts to achieve a water supply that is less frequently interrupted. The provision of alternative water supplies during an interruption and notification of the interruption were found to be unimportant to respondents. Choice modeling proved to be a useful technique and provided the industry and regulators with additional information for standard setting.     

INSTITUTIONAL BARRIERS TO WATER MARKETING IN THE WEST1

ABSTRACT: Water marketing has been proposed as one means of reallocating water supplies in the western United States. While markets for western water currently exist and may be expected to expand, the institutional constraints within which the markets must operate will limit the ultimate size and efficiency of those markets. Lack of articulation of public interests in the water resource itself leads to incomplete definition of the private rights to use the water, and it is those private rights which are sold or leased in the market. The increase in size and efficiency of any market in water rights will be dependent on the willingness of legislatures to specifically define the nature and extent of public interests in water supplies, and detailed definition is unlikely.     

流域比较视角的钱塘江与黑河流域水资源问题及对策研究——基于水足迹核算分析

产品贸易及水权交易使得水资源问题"跨流域化",不再单纯是流域内部管理问题。本文从流域比较视角出发,在区分蓝、绿、灰三种水足迹的基础上,应用水足迹模型,测算了两流域典型地区的水足迹,进行流域水资源问题对比分析,并分析了经济发展模式对流域水资源可持续性的影响。结果发现,杭州市经济用水中灰色水足迹占总量的90%,而张掖市经济用水中绿色水足迹占总量的60.8%,说明钱塘江流域水资源问题在于质,而黑河流域水资源问题在于量;经济发展模式中的产业结构、水资源开发效率、工业化路径等影响流域水资源可持续利用,同时基于GDP导向的流域间的水资源逆向配置,更加剧了流域水资源矛盾。最后根据流域对比结果提出治理措施,从而形成流域间协作的良性循环。     

Valuing Improvements in The Water Rights System in South Africa: A Contingent Ranking Approach1

Speelman, Stijn, Stefano Farolfi, Aymen Frija, and Guido Van Huylenbroeck, 2010. Valuing Improvements in the Water Rights System in South Africa: A Contingent Ranking Approach. Journal of the American Water Resources Association (JAWRA) 46(6):1133–1144. DOI: 10.1111/j.1752-1688.2010.00480.x Abstract: In the context of increasing water scarcity, understanding is growing that irrigation water rights are important and that a lack of an effective water rights system constitutes a major reason for inefficient water management. This study carried out a contingent ranking experiment to study how smallholder irrigators in South Africa would value potential changes in water rights. Three specific dimensions of water rights, relevant for the South African case, are considered: duration, quality of title, and transferability. Results indicate that smallholder irrigators are prepared to pay considerably higher water prices if improvements are made in the water rights system. This implies that the proposed interventions in the water rights system would improve the efficiency and productivity of the small-scale irrigation sector. The increased willingness to pay could furthermore also assist the South African government to reach the objective of increased cost recovery.     

A Transactions Cost Approach to the Theoretical Foundations of Water Markets1

Abstract: Water marketing is often cited as a means of alleviating the stresses attached to allocation of water use. Frequently, marketing is suggested in a context that implies substitution of competitive markets for the allocation based on the prior appropriation doctrine. This study examines water marketing from the perspective of a transactions cost approach to the private and broad social agreements (contracts) that support water allocation. It examines the major behavioral challenges faced by any contract, and the alternative approaches to those challenges, with respect to water allocation. It also examines the impact of market design on the existence of externalities, costs imposed by transactions on society and individuals not party to the transaction. It finds that the most robust water market designs will be found in systems with sufficient property rights protection to support investment, sufficient hydrologic information to provide accurate analysis of third party effects, conjunctive management of surface and groundwater, and a governance structure capable of administering the rules while not determining outcomes.     

A REGIONAL APPROACH TO PROJECT EVALUATION1

ABSTRACT. Water and related land resource planning has generally been characterized by project evaluation in isolation. Feasible alternatives have been ignored because the economic analysis did not include the interdependence of such subregional and regional variables as factor and product prices and production possibilities. This paper presents an economic framework, consistent with a regional development objective and an efficiency criterion, for proposing and evaluating resource projects. Subregional and regional derived demand curves for water are developed under alternative assumptions of subregional competition, regional market restraints, and yield and price uncertainty. The derivation of water demand curves using the proposed regional framework as compared to sub regional isolation has the desirable properties of (1) a marginal analysis that is more flexible over time is substituted for a static average analysis; (2) range estimates incorporating probabilities are substituted for point estimates; (3) approximations to functional demand curves are substituted for “needs”; and (4) fewer resources are required to meet a regional market restraint.     

Assessing equity and sustainability of water allocation in Colombia

Based on the national database of 28,104 water rights (concessions) granted in Colombia, this paper presents an analysis of how the principles of equity and sustainability are reflected in water allocation. Concessions appear to be an exclusionary mechanism since only a minority of small water users have concessions and the distribution of water volumes among those who have them is extremely inequitable. The 2009 Gini coefficient calculated for water concessions granted for agriculture was 0.90 compared with the rural land Gini of 0.88 (both indicators grouping holdings under the same entity). More than half of the Colombian departments have a higher Gini coefficient for water than for land, suggesting that water rights are at least as unequally distributed as land, in one of the most inequitable countries in Latin America. Water allocated to domestic, agriculture and hydropower use indicates a lack of consistency of water allocation criteria across regions. The volumetric and administrative attributes of water allocation in Colombia do not account for environmental flows or the concerns of marginalised groups of society that have limited access to the mechanism. Water allocation as a technical task, with limited transparency and secluded from public scrutiny, does not contribute to the solution of increasing water-related conflicts.     

OPTIMAL WATER USE AND SALINITY CONTROL FOR ENERGY - UPPER COLORADO RIVER BASIN1

ABSTRACT: The Upper Colorado River Basin contains appreciable amounts of undeveloped fuel resources. Large quantities of oil shale, coal, and uranium have attracted recent economic and commercial interests. Development of these resources and subsequent conversion to alternative energy forms require an adequate supply of water. Water use for large scale energy development will place increasing demands on an already overstressed allocation of Colorado River water. Present water quality is at a concentration where increased salinity will result in economic detriments to holders of downstream water rights. The salt and water exchange in mining, processing, and spent fuel disposal processes has been incorporated as part of a two-level minimum cost linear programming algorithm. Mathematical simulation results provide an optimal use of Upper Colorado River water for levels of energy output such that salinity concentrations are maintained below predetermined levels.     

The economic value of water use: implications for implementing the Water Framework Directive in Scotland

The European Union Water Framework Directive (WFD) enshrines several economic principles in pursuit of 'good ecological status' for Europe's waters and rationalising water use in society. The implicit principle of maximising the social value from use of a scarce resource is reminiscent of the debate about treating water as an economic good, which has competing uses in society. This paper locates the debate about the economic value of water in the requirements of WFD. Specifically, we consider the implications of national reporting requirements for the economic characterisation report that stress the identification of relative value derived from use. As part of the Scottish contribution to the UK reporting exercise, we use a range of secondary data sources to derive economic values for water on a sector basis. We suggest whether the implications of different water values can be followed through in the WFD.     

济南市水资源现状与可持续发展对策

济南市是资源型缺水城市,地表水遭到严重污染,已成为水质型缺水城市,导致地下水超采、地面沉降、泉水停涌等一系列环境、生态、经济问题,水资源已成为制约济南市发展的瓶颈因素.在对济南市水资源现状及相关问题进行详细分析的基础上,提出加强客水资源调用与管理、水资源循环利用、合理制定水价等水资源可持续利用的措施和对策.     

ECONOMIC INCENTIVES FOR WATER CONSERVATION ON THE MONTEREY PENINSULA: THE MARKET PROPOSAL1

ABSTRACT: Literatures on price‐based urban water conservation and on market‐based mechanisms to manage natural resources suggest that market‐based management of urban/suburban water use may be feasible. A market‐based proposal that emerged from a water shortage on California's Monterey Peninsula is presented. In the proposal, conservation incentives arise both from an ability among end‐users of water to reduce consumption and sell use‐rights to water, and from a penalty price for consumption in excess of one's use rights. The amount of water associated with use rights is capped and varies according to hydrological, meteorological, ecological, and other criteria. Requirements for further study of the proposal are listed, and the role that similar market‐based mechanisms could play in urban water management is discussed.     

Management of Water Shortage in the Colorado River Basin: Evaluating Current Policy and the Viability of Interstate Water Trading1

Wildman, Richard A., Jr. and Noelani A. Forde, 2012. Management of Water Shortage in the Colorado River Basin: Evaluating Current Policy and the Viability of Interstate Water Trading. Journal of the American Water Resources Association (JAWRA) 48(3): 411-422. DOI: 10.1111/j.1752-1688.2012.00665.x Abstract: The water of the Colorado River of the southwestern United States (U.S.) is presently used beyond its reliable supply, and the flow of this river is forecast to decrease significantly due to climate change. A recent interim report of the Colorado River Basin Water Supply and Demand Study is the first acknowledgment of these facts by U.S. federal water managers. In light of this new stance, we evaluate the current policy of adaptation to water shortages in the Colorado River Basin. We find that initial shortages will be borne only by the cities of Arizona and Nevada and farms in Arizona whereas the other Basin states have no incentive to reduce consumptive use. Furthermore, the development of a long-term plan is deferred until greater water scarcity exists. As a potential response to long-term water scarcity, we evaluate the viability of an interstate water market in the Colorado River Basin. We inform our analysis with newly available data from the Murray-Darling Basin of Australia, which has used interstate water trading to create vital flexibility during extreme aridity during recent years. We find that, despite substantial obstacles, an interstate water market is a compelling reform that could be used not only to adapt to increased water scarcity but also to preserve core elements of Colorado River Basin law.     

VALUE OF WATER IN IRRIGATED CROP PRODUCTION USING DERIVED DEMAND FUNCTIONS: A CASE STUDY OF SOUTH SASKATCHEWAN RIVER IRRIGATION DISTRICT1

ABSTRACT: Water abundance has led most North American societies to use water freely without priorizing its use. As water scarcity becomes reality in the southern part of Saskatchewan, planners and managers of water require information about the value of water in irrigation, as well as in alternative uses. In this study, the value of water to the producer in irrigation is developed both for the short and long run. The basis of this imputation is a derived demand function for water using linear programming. Water demand was bound to be inelastic at lower prices, and highly elastic at higher prices. The short-run value of water varied between $0.44 and $127.82 (1986 dollars) per acre-foot for different levels of product prices. However, the long-run value was estimated between zero and $1.59 per acre-foot of water.     

ADMINISTRATIVE,INSTITUTIONAL, AND STRUCTURAL CHARACTERISTICS OF AN ACTIVE WATER MARKET1

ABSTRACT: Voluntary water transfers through markets have been advocated by many diverse groups as a means to reallocate scarce water supplies in the semi-arid western U.S. Although transfers of water rights have occurred almost since the creation of prior appropriation laws over a century ago, functioning water markets have been very slow to develop and are few in number. The structure, composition, administration and transactions of one of the most well established water markets, shares in the Bureau of Reclamation, Colorado-Big Thompson project, are examined to better understand the institutional and transfer conditions that sustain an active water market. Results from a detailed study of C-BT project records reveal that between 1970 and 1993 there were 2,698 transactions through which over one-third of the project water changed ownership or type of use. Further analysis shows that the transactions involved many individual sellers and categories of buyers with different uses, including agricultural buyers. The transfer activity and efficiency of the C-BT market has lead some to suggest that it be used as a model for other markets. However, because this market has fewer institutional restrictions, a well developed infrastructure and unique market conditions, it will be difficult to transfer this model to other areas without accompanying modifications in water right administration and institutions.