Water Allocation in Rivers under Pressure

Water Allocation in Rivers under Pressure

Water Trading, Transaction Costs and Transboundary Governance in the Western US and Australia

Dustin Evan Garrick

Water trading and river basin governance have been upheld as institutional blueprints for allocating water for people, agriculture and ecosystems in a changing climate. Progress has been uneven, however, despite multiple decades of institutional reforms in river basins under pressure from demand, development and droughts. This timely book examines the evolution and performance of water allocation reforms in the Colorado, Columbia and Murray–Darling Rivers. It draws on concepts and evidence about property rights, transaction costs and institutional change to generate lessons about the factors contributing to more adaptive and sustainable water allocation.

Chapter 3: Unlocking the past: path dependency and intertemporal costs

Dustin Evan Garrick

Subjects: economics and finance, environmental economics, environment, environmental economics, environmental governance and regulation, water

Extract

[H]ere is the mighty river and its tributaries, as yet largely undeveloped, affording possibilities of extensive use for water power in its many canyons and for irrigation in its desert valleys, which need only the life-giving water to make them productive and valuable . . . These rivers make possible not only the construction of large irrigation systems and the growth of towns, cities, and prosperous agricultural communities but also the generation of hydroelectric power for lighting, heating, industrial uses, and the transportation of freight and passengers. (Grover, in La Rue, 1916: 9–10). For nearly a century, the water of the Colorado has been at the center of an intense political, legal, and economic tug-of-war between agricultural, municipal, industrial, tribal, environmental, state, and federal interests . . . every drop of the Colorado River is carefully planned and controlled, taking on new obligations and owners at each of its thousands of headgates, dams, and diversions. By the time it crosses the border, the mighty Colorado is exhausted to little more than a large stream – a stream that in most years disappears long before it reaches its terminus, diverted for irrigation in Mexico. [Shortly after long-range supply and demand intersected for the first time in the Colorado River]. (Culp, 2001: 1)

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