Institutions for Interstate Water Resources Management1

Abstract:  This paper evaluates alternative approaches to management of interstate water resources in the United States (U.S.), including interstate compacts, interstate associations, federal‐state partnerships, and federal‐interstate compacts. These governance structures provide alternatives to traditional federalism or U.S. Supreme Court litigation for addressing problems that transcend political boundaries and functional responsibilities. Interstate compacts can provide a forum for ongoing collaboration and are popular mechanisms for allocating water rights among the states. Federal‐interstate compacts, such as the Delaware River Basin Compact and federal‐state partnerships, such as the National Estuary Program, are also effective and complementary approaches to managing water resources. However, all of these approaches can only make modest improvements in managing water resources given the complicated and fragmented nature of our federalist system of government.     

ASSESSING ENVIRONMENTAL EFFECTS OF SEVERE SUSTAINED DROUGHT1

ABSTRACT: Evaluation criteria for reservoir and stream resources were developed to provide decision makers with feedback on environmental consequences of water allocation decisions under conditions of severe sustained drought within the Colorado River Basin by using the AZCOL gaming simulation model. Seven categories of flow dependent resources were identified which highlight resource states associated with reservoirs or river reaches within the AZCOL model. AZCOL directly simulates impact of water management decisions on five resource categories: threatened, endangered or sensitive fish; native nonlisted fish; wetland and riparian elements; national or state wildlife refuges; and hatcheries or other flow dependent facilities. Two additional categories - cold and warm water sport fish - are not modeled explicitly but are incorporated in the evaluation of monetary benefits from recreation on Colorado River waters. Each resource category was characterized at each time step in the simulation according to one of four environmental states: stable, threatened, endangered, or extirpated. Changes in resource states were modeled by time and flow-dependent decision criteria tied to either reservoir level or stream flows within the AZCOL model structure. Gaming results using the AZCOL model indicate environmental impacts would be substantial and that water allocation decisions directly impacted environmental resource states.     

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.     

THE LAW OF THE COLORADO RIVER: COPING WITH SEVERE SUSTAINED DROUGHT1

ABSTRACT: The waters of the Colorado River are divided among seven states according to a complex ‘Law of the River’ drawn from interstate compacts, international treaties, statutes, and regulations. The Law of the River creates certain priorities among the states and the Republic of Mexico, and in the event of a severe sustained drought, the Law of the River dictates the distribution of water and operation of the elaborate reservoir system. Earlier work indicated that there is remarkable resilience in the system for established uses of water in the Lower Basin of the Colorado River. This work shows, based on an application of the Law of the River using computer modeling of operations of facilities on the Colorado River, that there may be serious environmental consequences and related legal restraints on how the water is used in times of shortage and that the existing legal and institutional framework governing the Colorado River does not adequately address all the issues that would be raised in a severe sustained drought. Several possible legal options for dealing with drought in the context of the Law of the River are identified.     

WATER AND WATER RIGHTS TRANSFERS: A NEW POLICY FOR NEBRASKA1

ABSTRACT: Nebraska has abundant supplies of high quality surface and ground water. The U.S. Supreme Court decision in 1982, declaring ground water to be an article of commerce, is widely perceived as giving neighboring states easier access to Nebraska water. Some neighboring states, particularly Colorado and Wyoming, are in water short situations. Additionally, current legal restrictions on certain types of transfers within the State could be inhibiting the “highest and best use” of Nebraska's water. Thus, in 1987 the Nebraska Legislature called for the development of a new water policy for Nebraska that would promote the economically efficient use of water, yet protect the environment as well as the rights of individuals (for example, third parties) and the public. Through an interagency study employing an extensive public involvement process, a policy to be recommended to the Legislature in 1989 emerged. The policy revises the basic definition of water rights and transfers and eliminates most of the inconsistencies in the water allocation system by treating most types of water resources, most types of water users, and most locations of use similarly in the permitting process. (The principal exception is the individual irrigator using ground water on the overlying land where overlying land is one government surveyed section; such use is not defined to be a transfer nor is a permit required.) An impact assessment would be required of most new water uses except on site uses of ground water. Compensation measures could be specified as a condition of the permit where appropriate. The permit would be issued only if the benefits of the proposed transfer clearly outweigh adverse effects that could not be avoided or effectively compensated. The policy allows for the sale or lease of “salvaged” water. It calls for the State to facilitate transfers by acting as a clearinghouse for potential buyers and sellers, and it allows the State to sponsor water projects. An annual fee to be paid by many water users, in order to provide a fund for compensation and for state sponsored water projects, was proposed. However, it met with extensive opposition. Thus, the policy recommends only that the Legislature examine potential funding programs and equitable user fees.     

INTERBASIN WATER TRANSFERS IN RIPARIAN STATES: A CASE STUDY OF GEORGIA1

ABSTRACT: Under the riparian doctrine of eastern states, transfers of water to nonriparian lands and, thus, to different river basins, are only possible if the natural flow theory has been modified to allow for reasonable use. Even this adaptation is too nebulous to provide water managers and water users with certainty regarding water transfers. To provide a more precise mechanism for allocating water, 14 eastern states have adopted some form of administrative permitting process. Of these, five states statutorily allow for interbasin transfers of water. Thus far, no states have successfully issued permits for interbasin water transfers but Georgia and South Carolina are positioned to do so. Whether the permitting process will deter court action may rest on the ability of affected parties to negotiate an equitable agreement.     

STATE ACTIONS TO MITIGATE DROUGHT LESSONS LEARNED1

ABSTRACT: Drought has been a common feature in the United States during the past decade and has resulted in significant economic, social, and environmental impacts in virtually all parts of the nation. The purpose of this paper is two fold. First, the status of state drought planning is discussed to illustrate the significant increase in the number of states that have prepared response plans - from three states in 1982 to 27 in 1997. In addition, six states are now in various stages of plan development. Second, mitigative actions implemented by states in response to the series of severe drought years since 1986 are summarized. This information was obtained through a survey of states. The study concludes that states have made significant progress in addressing drought-related issues and concerns through the planning process. However, existing plans are still largely reactive in nature, treating drought in an emergency response mode. Mitigative actions adopted by states provide a unique archive that may be transferable to other states. Incorporating these actions into a more anticipatory, risk management approach to drought management will help states move away from the traditional crisis management approach.     

PLANNING FOR DROUGHT: MOVING FROM CRISIS TO RISK MANAGEMENT1

ABSTRACT: Severe drought is a recurring problem for the United States, as illustrated by widespread economic, social, and environmental impacts. Recent drought episodes and the widespread drought conditions in 1996, 1998, and 1999 emphasized this vulnerability and the need for a more proactive, risk management approach to drought management that would place greater emphasis on preparedness planning and mitigation actions. Drought planning has become a principal tool of states and other levels of government to improve their response to droughts. For example, since 1982, the number of states with drought plans has increased from 3 to 29. Many local governments have also adopted drought or water shortage plans. Unfortunately, most state drought plans were established during the 1980s and early 1990s and emphasize emergency response or crisis management rather than risk management. This paper presents a substantive revision of a 10‐step drought planning process that has been applied widely in the United States and elsewhere. The revised planning process places more weight on risk assessment and the development and implementation of mitigation actions and programs. The goal of this paper is to encourage states to adopt this planning process in the revision of existing drought plans or, for states without plans, in the development of new plans.     

WATER MARKETS AND DECENTRALIZED WATER RESOURCES MANAGEMENT: INTERNATIONAL PROBLEMS AND OPPORTUNITIES1

ABSTRACT: Because of its importance and the perceived inability of private sector sources to meet water demands, many countries have depended on the public sector to provide water services for their populations. Yet this has resulted in many inefficient public water projects and in inadequate supplies of good quality and reliable water. Decentralization of water management, including the use of water markets, cannot solve all of these water problems, but it can improve the efficiency of water allocation. When given adequate responsibility and authority, water user associations have effectively taken over water management activities at a savings to tax payers. Moreover, water markets add the potential benefit of improving water efficiency within a sector as well as providing a mechanism for reallocating water among sectors. The key question involves developing innovative mechanisms for reducing the transaction costs of organizing water users and of making water trades. Water rights need to be established which are recorded, tradable, enforceable, and separate from land if markets are to operate effectively. Also, institutions are needed that effectively resolve conflicts over water rights, including third party impacts and water quality concerns.     

Evidence Supporting Cap and Trade as a Groundwater Policy Option for Reducing Irrigation Consumptive Use1

Thompson, Christopher L., Raymond J. Supalla, Derrel L. Martin, and Brian P. McMullen, 2009. Evidence Supporting Cap and Trade as a Groundwater Policy Option for Reducing Irrigation Consumptive Use. Journal of the American Water Resources Association (JAWRA) 45(6):1508‐1518. Abstract: In the American West water is becoming an increasingly scarce resource. Obligations to bordering states, endangered species protection, and long‐term resource sustainability objectives have created a need for most western states to reduce the consumption of irrigation water. In Nebraska specifically, the Nebraska Department of Natural Resources (NDNR) and local Natural Resource Districts (NRDs) are meeting a large part of this need by using a regulatory approach, commonly called groundwater allocation. The cost of allocation, which occurs in the form of reduced economic returns to irrigation, could be greatly reduced by using an integrated cap and trade approach. Much like environmental cap and trade programs which are used to reduce the cost of limiting environmental pollution, the trading of capped groundwater allocations can reduce the cost of limiting water use. In an analysis of a typical case in the Nebraska Republican Basin, we found that the impact of a water market to trade groundwater allocations depended on the size of the allocation and on the characteristics of the land and irrigation systems involved in the trade. Potential economic benefits from trade ranged from US$0 to US$120 per 1,000 cubic meters traded, from US$25 to US$250 per 1,000 cubic meters of reduction in consumptive use, and from US$16 to US$50 per hectare of irrigated land in the region. The highest benefits occurred at relatively high allocations, which capped withdrawals at 65‐75% of the expected unrestricted pumping level. These gains from trade would be split between buyers and sellers based on the negotiated selling price.     

RAPID WATER TABLE RISE1

ABSTRACT: There are unpublished reports of rapid and large rises in the water table which are out of proportion to the infiltrated volumes of water. The phenomenon seems to result from the conversion of a tension saturated zone to phreatic water by one of several mechanisms. The effect could be triggered when the tension saturated zone intersects: the ground surface, a saturated soil horizon, or a coarse zone. The phenomenon could prove to be a common link in explaining several seemingly diverse phenomena which characterize non-Hortonian runoff in a humid environment. Under certain conditions storm peaks are dominated by flow from small, restricted, “variable source” areas that contributed runoff when saturated from below by rising water tables; for other streams, ground water input forms the major part of the flood peak. The explanation for these observations could lie in an understanding of the rapid water table rise phenomenon. Such a mechanism. if widespread, would provide the means for producing saturation at or near the surface shortly after rainfall commences. The phenomenon should be documented and closely analyzed from a number of perspectives to define its true role in the hydrology of humid environments.     

Transboundary Groundwater Policy: Developing Approaches in the Western and Southwestern United States1

Hathaway, Deborah L., 2011. Transboundary Groundwater Policy: Developing Approaches in the Western and Southwestern United States. Journal of the American Water Resources Association (JAWRA) 47(1):103‐113. DOI: 10.1111/j.1752‐1688.2010.00494.x Abstract: The western and southwestern United States include dozens of groundwater basins that cross political boundaries. Common among these shared groundwater basins is an overlay of differing legal structures and water development priorities, typically, with insufficient water supply for competing human uses, and often, a degraded ecosystem. Resolution of conflicts over ambiguously regulated groundwater has clarified transboundary groundwater policy in some interstate basins, while transboundary groundwater policy in international basins is less evolved. This paper identifies and contrasts approaches to transboundary groundwater policy, drawing from recent conflicts and cooperative efforts, including those associated with the interstate compacts on the Arkansas and Pecos Rivers; the Hueco and Lower Rio Grande Basins shared by New Mexico, Texas, and Mexico; and the Mexicali Basin in California and Mexico. Some efforts seek to fit groundwater policy into existing surface water allocation procedures; some strive for a better fit – incorporating scientific understanding of key differences between groundwater and surface water into policy frameworks. In some cases, neither policy nor precedent exists. The collective experience of these and other cases sets the stage for improved management of transboundary groundwater; as such, challenges and successes of these approaches, and those contemplated in several hypothetical model agreements, are examined.     

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.     

STATE FINANCING OF WATER PROJECTS: THE UTAH EXPERIENCE1

ABSTRACT: Dramatic changes in Utah's economy caused by urbanization, large scale energy developments, and other influences will significantly reorient water use patterns. Thus, state water management policies and programs which have evolved over many years should be reevaluated. Several factors have influenced Utah water project financing policy. Among these have been: 1) the prominence of agriculture in the settlement of Utah and the century following, 2) dry cycles and periodic severe droughts, 3) recurring periods of economic depression, and 4) allocation of Colorado River water among the basin states and Mexico, Three revolving funds have been established. The Revolving Construction Fund, created in 1947, provides money for irrigation projects; the Cities Water Loan Fund, created in 1975, provides money to communities for developing culinary systems and improving quality to meet the demands of exploding population growth; and the Water Resources Conservation and Development Fund, created in 1978, provides money for large scale multipurpose water projects costing $1 million or more. The justification for these financing programs seems to be a mixture of rectifying market imperfections and income redistribution. However, trends in the agricultural sector and the multipurpose nature of large scale projects now being funded suggest that earlier justifications may no longer be valid. Rigorous project evaluation procedures, lacking in the past, should be adopted.     

Managing Drought Through Water Markets: Farmer Preferences in the Rio Grande Basin1

Abstract: Managing drought in agriculture has taken on growing importance as population growth and environmental concerns place increasing pressures on agricultural water use. One alternative for agricultural water resource management in areas of recurrent drought is allocation through market mechanisms. While past research has aimed to explain why farmers are reluctant to participate in already established water markets, this research seeks to identify the appropriate market mechanism given farmers’ preexisting attitudes toward water markets. Statistical analysis of survey data from 166 farmer interviews in the Rio Grande Basin indicate that farmers are significantly more likely to participate in short‐term water mechanisms, such as spot water markets and water banks than in permanent transfer mechanisms, particularly those that fully separate water rights from land. In sharp contrast to expectations, the choice of market mechanism did not differ significantly between farmers based on their a priori intention to buy, sell or both buy and sell in these markets. Choice of market mechanism also did not differ among farmer types although small, lifestyle or hobby farmers clearly preferred spot water markets to other types of short‐term mechanisms. Evaluating these attitudes a priori may help to design more suitable water market mechanisms for the basin.     

Enhanced water resource base for sustainable integrated water resource management

The article states the case for greatly enhanced reliance on desalination in the provision of freshwater. It argues that the concept of integrated water resource management (IWRM), should be expanded to routinely include desalination, and that sea water and brackish water should be listed among available sources of freshwater. In recent years, the price per m3 of freshwater obtained from desalination has steadily declined, and is now within competitive range of conventional sources, especially as extracting water from surface sources (rivers, lakes) is becoming increasingly expensive as well as ecologically harmful, and groundwater in many locations is saline or depleted. With the expectation that by 2020, five billion people will reside in megacities, today's conventional water resources are likely to become insufficient. As many of these megacities are located near ocean coasts, sea water seems a logical solution.     

INTEGRATED WATER RESOURCES MANAGEMENT WHO SHOULD LEAD,WHO SHOULD PAY?1

ABSTRACT: Improving water management to meet future global needs will certainly require technical advances, but the main challenge is to integrate the viewpoints of diverse societal interests into decisions about allocation of water resources. The integration cannot be done solely by the market because it requires a balancing among interests which do not respond well to market forces, nor by the state alone because of institutional problems. The concept of “integrated water resources management” has been developed to provide the framework for the required balancing of interests, and, like similar concepts in industries other than water, it has a dual purpose - to link stakeholders and apply best practices to management actions. To clarify the process of integrated water management, the paper focuses on two questions: who should lead integrated water resources management and who should pay for it? Several examples are given to illustrate a range of situations. The paper concludes with a call to improve paradigms of integrated water management, a proposition that water organizations should accept and budget for their external responsibilities as well as their direct missions, affirmation of the need for state and federal agencies to be involved with local interests, a call for better scientific and public information, and identification of the need for continued work to improve the process of integrated water management.     

THE POTENTIAL IMPACT OF WATER REALLOCATIONS ON AGRICULTURE IN IDAHO1

ABSTRACT: Economics is concerned with the allocation of resources between alternative uses. Traditionally, in the western United States, water resources have been committed to agriculture and irrigation. Other competitive uses such as power, industry, and recreation are challenging this allocation. What are the impacts of shifting water out of agriculture into other uses, is a question that needs to be given consideration. Ilia paper attempts to evaluate the tradeoff between using farm land for either irrigated or dryland production and the resulting impacts on gross farm income and the average price of land. Baaed on historical data, reducing irrigated acreage and increasing dryland acreage could greatly reduce both farm income and the equity in farming. The model presented in this paper should be useful for evaluating the tradeoffs between dryland and irrigated land use, especially when there are gat differences in productivity such as those that exist in the inter-mountain region of the Western United States.     

ANALYSIS OF WASTE LOAD ALLOCATION PROCEDURES1

A study was made to analyze and modify procedures used for stream assimilation capacity and point source wasteload allocation calculations. This paper describes the sources and types of information collected and the analysis of alternative computation methods developed during the study. The calculation of stream assimilation capacity or Total Maximum Daily Load (TMDL), will depend upon assumed stream flows, quality standards, reaction rates, and modeling procedures. The “critical conditions” selected for TMDL calculations usually are low flows and warm temperatures. The complexity of water quality models used for TMDL and allocation calculations can range from simple, complete mixing to calibrated and verified mathematical models. A list of 20 wasteload allocation (WLA) methods was developed. Five of these WLA's were applied to an example stream to permit comparisons based on cost, equity, efficient use of stream assimilation capacity, and sensitivity to fundamental stream quality data. Based on insensitivity to data errors and current use by several states, the WLA method of “equal percent treatment” was preferable in the example stream.     

WATER-ENERGY LINKAGES IN NEBRASKA1

ABSTRACT Nebraska is well endowed with water, particularly groundwater, but has few fossil fuel reserves. However, it is located adjacent to states which have almost no water but have enormous quantities of coal and oil shale. Recent court cases facilitate the movement of water from water-rich states such as Nebraska to water-short states, such as Colorado and Wyoming. The possibility of an energy-water partnership exists and raise numerous policy questions. Within Nebraska, energy consumption patterns are similar to those of the nation's, with consumption of electricity in the agricultural sector growing fastest. Water consumption in the state is dominated by agriculture, and future development of groundwater for irrigation is expected to be intense. Although water and energy are both factors of economic production, an equivalent amount of water consumption provides more jobs in the energy industries than in agriculture. Water and energy are also interdependent. Each is required to produce the other and conservation of one will cause conservation of the other. If both agriculture and electricity are involved, such as in irrigation, the conservation effects are synergistic. Current water policy in Nebraska is biased toward agriculture relative to the energy industries and provides little incentive for water conservation. Given recent court cases and economic conditions, the advantages and disadvantages of the sale of water for export or the use of water with Wyoming coal for energy development need to be compared systematically with those of using water only for agriculture.