Robert Glennon

Reforming Western Water Law and Policy

We cannot resolve the water crisis in the American West by simply relying on the traditional approaches to water scarcity: diverting more water from rivers, constructing more dams and reservoirs, or pumping more groundwater. We can provide incentives for urban households to use less water (for example, by setting water prices so that moderate quantities of water have a lower price per unit while higher quantities of water have a higher price per unit). We can find ways to reuse municipal effluent. We can, within reason, develop some new supplies—for example, through desalination. In addition, however, we need to create institutions that would make water allocations more flexible and more resilient so that cities, farms, industries, and environmental interests can thrive even in the face of substantial disruption of water supplies. Water markets represent an important tool for achieving this flexibility.

The Western Water Crisis: Long Time Brewing, Now on the Boil

There’s an old saying in the West: “Whiskey is for drinking and water is for fighting.” And another: “In the West, water flows uphill—toward money.” More than a century of water conflict, and growing cooperation—between new users and old, upstream and downstream users, and among municipal, agricultural, and environmental interests— has produced a complex legal environment for allocating water rights in the West. This wide array of interests has also created an equally complex system of dams and canals for collectively storing, pumping, and diverting water.

Questions and Concerns

Farmers are savvy businesspeople who understand the opportunities markets provide. If a housing developer approaches a farmer with an offer to purchase water rights, the farmer has four options. First, the farmer might decline the offer, whether because the offered price is too low or for any other reason. Second, the farmer might look around and notice that the forty acres behind the barn have mostly clay soil, with a low crop yield in bushels per acre. The farmer might decide to fallow this land and sell the conserved water to the developer for profit. Third, the farmer might sell the conserved water and use the proceeds to modernize the farms irrigation infrastructure. In the case of one rancher in Oregon,

Water follies : groundwater pumping and the fate of America's fresh waters

700,000 offered by the Oregon Water Trust allowed a ranching family to install a center-pivot irrigation system. The new system enabled that family to grow just as much alfalfa with less water—a win-win solution (Glennon 2009).