Bonnie G. Colby

Cap-and-Trade Policy Challenges: A Tale of Three Markets

Cap-and-trade policy instruments have been applied to a number of environmental problems, with varying success. This article examines cap-and-trade programs for SO2 allowances, fishery quotas, and water rights. Design and implementation of cap-and-trade mechanisms involves challenging policy tradeoffs: accommodating equity concerns, balancing use levels with resource conditions, facilitating transactions, accounting for externalities, assuring adequate monitoring, and documenting welfare gains. Efficient trading mechanisms are more readily implemented when there is a strong political or legal mandate to cap resource use and trades are perceived as a means to ease adjustment to use limits.

Anderson, Terry L., and Randy T. Simmons, editors. The Political Economy of Customs and Culture: Informal Solutions to the Commons Problem. Lanham, MD: Rowman and Littlefield Publishers, Inc., 1993, viii + 189 pp.,

Chapter 1 Faciliting Cross Disciplinary Understanding of the Commons Chapter 2 Property-Rights Regimes and Natural Resources: A Conceptual Analysis Chapter 3 The Tragicomedy of the Commons Chapter 4 Contracting into the Commons Chapter 5 Capturing the Commons: Legal and Illegal Strategies Chapter 6 The Political Economy of Changing Property Rights: Dismantling a Kenyan Commons Chapter 7 Analyzing Institutional Successes and Failure: A Millennium of Common Mountain Pastures in Iceland Chapter 8 Covenants With and Without a Sword: Self-Enforcement is Possible Chapter 9 Economic Principle in the Emergence of Humankind

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Arizona has burgeoning urban areas, large agricultural regions, water-dependent habitats for endangered fish and wildlife, and a growing demand for water-based recreation. As one of the seven states in the Colorado River Basin, Arizona must cooperate, and sometimes compete, with other state, tribal, and federal governments in securing its water needs—a process that is complicated by a multi-year drought and climate-related variability in water supply. Arizona Water Policy addresses these issues from academic and policy perspectives that include economics, climatology, law, and hydrology. The book explores Arizona’s water management and extracts lessons that are important worldwide.

Arizona water policy : management innovations in an urbanizing, arid region

Disputes prompted by competition for scarce water supplies have proliferated worldwide, generating enormous costs and uncertainties for affected parties. Economists have extolled the virtues of markets and voluntary transactions for well over a century as a means to achieve efficient resource allocation. This chapter examines voluntary water transfers from a somewhat different perspective than that of allocative efficiency. It explores negotiated transactions as a tool for resolving water disputes through analysis of conflicts in the American West. The study of mechanisms to successfully resolve water disputes is a field of inquiry in its own right, one in which economics is just beginning to play a role (xcDinar and Loehman, 1995). Interesting challenges arise in applying economic paradigms to evaluate dispute resolution processes. Conflicts over water often are difficult to evaluate using economic efficiency constructs because the baseline entitlements from which costs and benefits should be measured are themselves the subject of contention. While allocative efficiency is problematic in such situations, other economic criteria can be used to compare the strengths and weaknesses of different approaches to resolving water disputes.

Negotiated Transactions as Conflict Resolution Mechanisms: Water Bargaining in the U.S. West

Because of large upstream diversions for agriculture and an absence of policies to protect in-stream flows, flows in the Rio Grande near Taos, New Mexico, routinely are low by midsummer. The reach is a popular Whitewater run in the southwestern United States when flows are adequate for river running. This article estimates the regional economic impacts attributable to summer streamflow depletions. Economic analysis indicates that while lower water levels affect the number of people coming to the region to raft on one river reach, low water levels had no effect on another nearby rafting area. Total expenditures and economic impacts were simulated for streamflows maintained at levels adequate for Whitewater recreation throughout the summer season. These simulations indicate a 24% (

Measuring regional economic impacts of streamflow depletions.

0.74 million) increase in rafting-linked expenditures and a 25% (

Weather, Climate, and Environmental Water Transactions

0.94 million) increase in value added from rafting, compared to actual 1992 expenditures and value added.

Drought, Climate Variability and Implications for Water Supply and Management

Abstract Obtaining water for environmental purposes, such as habitat restoration or water quality improvements, has become an important objective in many parts of the world. Such water acquisitions are likely to become more challenging as regional water demand and supply patterns are altered by climate change. In regions where water supplies are already fully claimed, voluntary negotiated transactions have become a key means to obtain water for the environment. The cost of acquiring water in such transactions is hypothesized to vary with regional weather and climate conditions due to both the actual effects of temperature and precipitation on water supply and demand and the perceptions water users may hold about these effects. This article develops econometric models to examine the effect of temperature and precipitation on water lease prices in four U.S. states located in the desert southwest. Water leases for environmental and nonenvironmental purposes are contrasted to understand the differing nature o...

Adaptation and resilience: The economics of climate, water, and energy challenges in the American Southwest

Arizona has burgeoning urban areas, large agricultural regions, water-dependent habitats for endangered fish and wildlife, and a growing demand for water-based recreation. As one of the seven states in the Colorado River Basin, Arizona must cooperate, and sometimes compete, with other state, tribal, and federal governments in securing its water needs—a process that is complicated by a multi-year drought and climate-related variability in water supply. Arizona Water Policy addresses these issues from academic and policy perspectives that include economics, climatology, law, and hydrology. The book explores Arizona’s water management and extracts lessons that are important worldwide.

Valuing amenity resources under uncertainty: Does the existence of fair contingent claims markets matter?

Foreword 1. The Climate-Water-Energy Nexus in the Arid Southwest PART I: VOLUNTARY WATER TRANSFERS AS ADAPTATION MECHANISMS 2. Negotiated Water Transactions and Climate Change Adaptation 3. Applying Bargaining Theory to Western Water Transfers 4.Economic Tools For Climate Adaptation: Water Transaction Price Negotiations PART II: SECTOR IMPACTS OF CLIMATE CHANGE 5. Water Shortages in the Southern Mountain States: Economic Impacts on Agriculture 6. Climate, Water Availability, Energy Costs and National Park Visitation 7. Climate, Changing Snowpack and the Future of Winter Recreation PART III: INFORMATION, TECHNOLOGY AND ADAPTATION 8. Irrigator Demand for Information, Management Practices, and Water Conservation Program Participation: The Role of Farm Size 9. Irrigation Technology Choice: The Role of Climate, Farm Size, Energy Costs, and Soils 10. Using Climate Information to Improve Electric Utility Load Forecasting 11. Use of Weather Information in Agricultural Decision-Making CONCLUSION 12. Modes of Adaptation and Regional Resilience to Climate Change