By Dennis Polhill

Water Quantity Action Agenda

  • Convert state and federal water projects to private ownership.
  • The key to minimizing waste of water is to have the rights freely transferable between private owners in a free market. The owners of a water resource should bear the opportunity cost of wasting it. The approach is equally applicable to surface diversion, instream flows, and non-tributary ground water.
  • Allow private rights for instream flows. Change Colorado water law so that water simply left flowing in a stream for environmental reasons becomes a legally protected use.
  • Because markets are good at allocating resources, reliance on markets becomes more essential as a particular resource (water) becomes more essential.

Analysis
The availability of a reasonable quantity of good quality water is critical to the survival of human beings. The operative word is “reasonable.” Water law in the U.S. has followed two paths: riparian law and appropriation law. The 100th meridian bisects Kansas. Because of the climate of the continent (i.e. annual rainfall), states east of the 100th meridian are governed by riparian law. States west of the 100th meridian are arid in climate, have more limited water resources, and are governed by appropriation laws. The basic riparian philosophy is that there is more than enough water to go around, and everyone can have as much as they want, at any time, and for any purpose whatsoever. Appropriation law conversely treats water as a limited resource. Water is recognized as a property right. Definition of water rights is accomplished through a body of laws, a system of water courts, and a staff of state water engineers. Reasonably sophisticated free markets have evolved in appropriation states where water rights are regularly bought and sold.

The historical view that we as a culture have had of water tends to distort thinking about water. Essentially, the culture has been (even in appropriation states) to waste, to contaminate, and to throw away water. With growing population and diminishing reserves of naturally available clean water, society’s culture of free and wasteful water use will have change.

In Colorado, the old culture has stimulated much public debate and controversy-most
recently over the Two Forks Dam project. The arguments for the project are rooted in the old culture of ample cheap water-readily available to be contaminated and wasted. Sustaining the old culture is not in the best interest of society.

Colorado has ample water for domestic consumption through 2040. Market forces can be used to motivate wiser use of this valuable and limited resource. Two Forks Dam is probably unnecessary and likely will never be built. About 80% of Denver Metro peak water
consumption is used in lawn irrigation. With restricted supply and increased demand, prices will increase. Lawn irrigation systems will have the incentive to be more efficient and lawns will get smaller.

On a more global scale, about 90% of all water consumption is used in farm irrigation. Price increases will yield ample water for domestic consumption. A 10% efficiency improvement by farmers doubles the amount of water available for domestic consumption. It is estimated that a 10% increase in cost of water to farmers would be enough to motivate a consumption reduction of 1.0%.

As water becomes more valuable and more expensive, society will be less willing to throw it away. Wastewater effluents will continue to be cleaner and secondary usage of wastewater treatment plant effluents will increase, mostly for industrial and irrigation purposes.

Only 1 % of domestic water consumption is actually taken internally by human beings. Thus, if domestic water prices skyrocketed, duplicate systems with different quality standards would quickly evolve. Closed water recycling systems are not likely to become commonplace for at least 100 to 200 years because of economics, aesthetics, and abundance. Technology is not the limiting factor in the evolution of closed systems. People physically consume only 2 gallons of every 10,000 gallons that comes to the U.S.

The problems of domestic water supply are economic. As long as free markets are inhibited by government interference, availability problems and resultant environmental problems will tend to be exaggerated. A rational Colorado water public policy suggests that the State should foster, not inhibit, the evolution and operation of free market mechanisms.