Water Transfers in the West Efficiency, Equity, and the Environment (1992) / Chapter Skim
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Pages 1-15
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From page 1... ...
And irrigated agriculture remained the engine of western development until the 1970s. For almost a century, western water management was guided by five assumptions: (1)
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With varying degrees of enthusiasm, many water users and influential segments of the environmental community have accepted the premise that water marketing the transfer of water rights from existing to new uses at market value should be a major component of future western water policy. This committee believes that voluntary water transfers are the most significant mechanisms available today for responding to the West's changing water needs but that broad "third party" participation is essential if transfers are to be both efficient and equitable.
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Reliance on water marketing, as opposed to government subsidy and regulation, reflects a general societal belief that markets are a more effective way to allocate scarce resources to meet the twin goals of efficiency and equity. For sound reasons, water transfers will remain a central component of water policy in the next century.
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In addition to providing this general analysis of third party effects, the committee has examined a number of areas in the western United States where water transfers are occurring, or may soon occur, in an attempt to identify characteristics common to water transfers and to obtain firsthand knowledge about when they are considered "positive" and when they are potentially harmful to third parties. A comprehensive assessment of benefits and costs of water transfers is premature, 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 and how third party effects should be weighted by decisionmakers.
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Techniques for measuring the impacts of water transfers are more precise for some types of impacts than others. It is difficult and unreliable, for instance, to apply economic measures to those impacts that are not usually measured in market terms, including most social, political, and environmental effects.
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Rather, the committee used the analyses to highlight broad lessons about the nature, scope, and impacts of water transfers in general and to develop suggestions for improving the processes used to evaluate and regulate water transfer activity. THE ROLE OF LAW IN THE TRANSFER PROCESS Because water is seasonally and geographically limited in the West, encouraging the 'productive use of water has always been a key policy objective, from the days of the Anasazi to the present.
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SUMMARY TABLE S.1 Factors to Consider When Assessing Potential Water Transfers 7 Type of Transfer Change in ownership Change in point of diversion Change in use Change in systems operation Out-of-basin diversion Primary Process for Transfer Voluntary Involuntary Primary Market Forces for Transfer Government Local State Executive Legislative Judicial Federal Executive Legislative Judicial Affected Parties Rural communities Support services Erosion of tax base Loss of natural resource base Agriculture Remaining water users Reallocation of rights Ethnic communities and Indian tribes Ethnic communities Indian communities Agricultural maintenance and expansion Other Environment Instream flows Recreation uses Fish and wildlife Hydroelectric power Water quality Damages to water users Human health Ecosystem effects Ecosystem protection Endangered species Wetlands Riparian habitat Estuaries Urban interests Intrastate transfer constraints Tax-exempt status changes Federal taxpayers National economic concerns Windfall profits Other water rights holders Junior rights Senior rights Loss of flexibility Nature of Effects Economic (national/regional) Lost revenue Lost opportunities New revenue Environmental Instream/fish and wildlife Recreation Water quality Wetlands Social Rural communities Municipalities Other
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From page 8... ...
State water quality protection goals can be furthered in the transfer process if statutes and procedures are clarified to specify' that purpose. Federal project water can be used in ways compatible with state instream flow laws, with transfers allowed only when these state laws are satisfied.
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All levels of government should recognize the potential usefulness of water transfers as a means of responding to changing demands for use of water resources and should facilitate voluntary water transfers as a component of policies for overall water allocation and management, subject to processes designed to protect well-defined third party interests. Third party protection should be seen not simply as a constraint but as a legitimate component of the transfer process.
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States and tribal governments should develop specific policies to guide water transfer approval processes regarding the community and the environmental consequences of transferring water from one basin to another because such transfers may have serious long-term consequences. Water transfer processes should formally recognize interests within basins of origin that are of statewide and regional importance, and these interests should be weighed when transbasin exports are being considered.
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The Public Interest Public interest considerations should be included among the third party issues and legal provisions for permitting, conditioning, and denying water transfers. To protect third parties in water rights transfers, the public interest language in western states' water laws should be reviewed, clarified, and, where appropriate, more vigorously applied.
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Transfers on Indian Reservations Tribal governments should consider special factors in approving and administering water transfers on their reservations. When Indian water rights are transferred or applied to off-reservation uses, tribal governments should establish procedures to evaluate third party effects.
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Given changing demands, the federal government should now have a specific transfer policy. Federal legislative and administrative policies should more clearly support federal water transfers while paying careful attention to third party effects and to the distribution of benefits from transfers involving federal project water.
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As transfers become common in western basins, the necessity of comprehensive planning and management will become clear. Water management institutions should develop the technical capability to assess the full range of impacts associated with potential water transfers and should weigh the merits and problems broadly along with other available management options and the effects of each.
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From page 15... ...
SUMMARY 15 difficult, almost inevitably imposing new burdens on both the transferring parties and the administrative agencies that review water transfers. The quest is for a balance point that allows broader participation in decisionmaking while not inhibiting desirable transfers.
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