Water in the West:
Current Use and Future Challenges
Christopher Goemans, Ph.D.
Agricultural and Resource Economics
13th Annual Farmers Cooperatives Conference
Cooperatives, Agriculture & Water Resource Policies
Broomfield, CO
Overview
•
•
•
•
How is water currently “used”?
How is water currently allocated?
Future challenges
Options for dealing with future challenges
A story of change…
2
Total Withdrawals
Figure 2, “Estimated Use of Water in the United States in 2005”, Circular 1344, USGS
3
Total Irrigation Withdrawals
Figure 2, “Estimated Use of Water in the United States in 2005”, Circular 1344, USGS
4
Colorado: Percent of Total Diversions by Activity
SS Industrial, 1%
Other, 3%
Public Supply,
6%
Irrigation, 90%
Calculated based on 2005 USGS Water Use Estimates, water.usgs.gov/watuse/data/2005/
5
Water Allocation Law in the U.S.
• Three “layers” of laws…
– Laws governing the allocation/use of water
within states
– Laws governing the allocation/use of water
across states
– Federal laws
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Within State Water Allocation
Two primary systems:
1. Riparian Law
2. Doctrine of Prior Appropriation
– Primarily in the Western U.S.
– Priority system of water rights based on: “first in
time, first in right”
– Water Rights transferable as long as other water
rights holders not “injured”
• Designed to protect existing uses/users
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Projected M&I and Self-supplied Industrial
Gross Demand, 2000 - 2030
2,000,000
1,800,000
M&I Demand AF/Yr
1,600,000
1,400,000
1,200,000
West Slope
1,000,000
East Slope
800,000
600,000
400,000
200,000
0
2000
2010
Year
2020
2030
Approximate Projected Increase in Demand:
•West Slope: >100,000 AF/Yr
•East Slope: >650,000 AF/Yr
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9
South Platte River Basin: Projected
Population Growth by Region
Population Growth by Region
7000000
6000000
5000000
Northern Region
4000000
Central Region
3000000
Southern Region
2000000
1000000
0
U
%
1980 1990 2000 2010 2020 2030 2040 2050
U
%
U
%
U
%
#
Boulde r
U
%%
U
U
%
U
%
%
U
U%
#
Denve r
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The Basic Problem…
Supplyt

Demandt
•In simple terms: Water managers goal is to make sure
that there is enough supply to meet demand
•Questions: How much supply and where? How much
demand will there be? Can we increase supply? Can we
decrease demand?...
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Options for achieving this goal…
•
•
•
•
Development of additional storage?
Reuse?
Conservation?
Reallocating water???
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A “Slice” of the Hydrologic Cycle
Consumptive Use: that part of water withdrawn that is evaporated,
transpired by plants, incorporated into products or crops, consumed
by humans or livestock, or otherwise removed from the immediate
environment. (USGS)
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The Importance of Return Flows
The South Platte River Basin
• Annual total “native” flows: 1,400,000
acre feet
• Annual “trans-basin” inflows: 400,000
acre feet
• Annual surface water diversions:
4,000,000 acre feet
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Alternatives for Reallocating Water
Institutional Alternatives for Reallocating Water:
• Water Rights Markets
Alternatives for freeing up the water:
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Why Water Transfers?
“It is commonly argued that reallocating just 10
percent of agricultural water to municipal uses
could boost municipal supplies by 50 percent
West-wide.”
Water and Growth in Colorado- Nichols et al. (2001)
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Why Water Transfers?
• “It is thus of increasing importance that existing water
supplies be allocated more efficiently than in the past. It is
ludicrous that Southern California should incur a cost in
excess of $450 per acre-foot for additional water while
irrigators in the Central Valley continue to irrigate
thousands of acres of crops which are in surplus
nationally.” (Howe et al. 1986)
• “…the economic value of water is often several times
that of agricultural use. For example, native irrigation
water is worth $500 to $1,000 per acre-foot in the Northern
District, while the asking price for municipal water from
Windy Gap is 10 to 24 times more…” (Nichols et al. 2001)
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Alternatives for Reallocating Water
Institutional Alternatives for Reallocating Water:
• Water Rights Markets
– “Buy and Dry”
Alternatives for freeing up the water:
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Potential Changes in Irrigated Acres
No change
39,000 acres
or
2,600 acres
133,000 to 226,000 acres
7,900 to 16,000 acres
2,500 to
10,000 acres
23,000 to 72,000 acres
2,400 acres
or
1,300 acres
60,000 to
100,000
acres
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Alternatives for Reallocating Water
Institutional Alternatives for Reallocating Water:
• Water Rights Markets
– “Buy and Dry”
• Water Markets
– Water Banks
– Multi-year Leasing Agreements
– Interruptible Water Supply Agreements
Alternatives for freeing up the water:
• Rotational Fallowing
• Limited Irrigation
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Questions? Comments?
Christopher Goemans
Department of Agricultural and Resource Economics
cgoemans@colostate.edu
Using Experimental Markets to Evaluate and
Design Institutions
Example: Experiment Overview
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