Saturday, January 29, 2011

Allocating Water for the Environment

View of the Santa Cruz River near downtown Tucson from 1904.
Copyright Information: 1904 - Arizona Historical Society. Photo ID: 26691

Back in 2009, when I participated in a study of regional water resources with the objective of finding policies that would encourage sustainable water use in Tucson and Pima County (the City/County Water study - see multiple previous posts), one of the key findings of that study was that future water planning in the region needs to incorporate environmental water needs as well as water for people and our economy.  While acknowledging that fact was an important step in this community, the real challenge is determining how to actually incorporate the environment in water allocation decision-making.

The Phase II report produced from that study identified 5 broad goals and 13 recommendations related to "Respect for the Environment" that talked about identifying opportunities and water supplies for environmental restoration and preserving the few existing riparian environments remaining in this area.  But in terms of actually identifying those opportunities it talked about things like seeking to incorporate multiple benefits into future infrastructure projects and maintaining the "effluent dependent" riparian habitat that has been created in the Santa Cruz River as a historical accident of our need to dispose of treated wastewater.  Not exactly earth-shaking stuff.  As for identifying water supplies for the environment the main recommendation was to finalize a 2000 inter-governmental agreement (fairly large pdf) between the city and county allocating up to 10,000 acre-feet per year of the effluent coming from county-owned treatment plants for future environmental restoration projects.  Don't get me wrong - it was very important for that to be completed - but it hardly constitutes a long-term strategy to "put the environment at the table where water is distributed," as stated in the report.  That's putting the environment at the kids table, where the grown-ups tell it what it can have and when.

And this water is not entirely safe until they start actually allocating it.  The local development community has been trying to derail the plan to implement the Conservation Effluent Pool (CEP), as the 10,000 acre feet is known locally.  But that is the subject of a separate post.

So how does the environment get a seat at the grown-up table in future water allocation decisions?  One idea is to have the environment as a full economic participant in water allocation.  That means obtaining water rights for the environment by outright purchase (of water or land with water rights attached), various types of lease agreements, or conservation easements.  Some of these ideas are described in a recent article (links to pdf) in the Arizona Journal of Environmental Law and Policy, by Aaron Citron (a fellow Arizona law grad).  But there are a lot of limitations to this type of solution because of various quirks of water law and land use law in Arizona. 

Those limitations are described very well in a forthcoming report from Ecosystem Economics that I hope to be able to share when it's finalized.  Their report resulted from workshops they conducted with a variety of Arizona water policy experts last summer (I was honored to be included in the second workshop) and will hopefully culminate in a number of policy recommendations the state could implement to foster greater market activity in water rights in the state that could benefit the environment if water from low-valued uses could be shifted to environmental uses via market transactions.  The biggest challenges (in my opinion, but also echoed in the report) are the failure of Arizona water law to fully recognize the connection between surface water and groundwater and the highly uncertain nature of many water rights in the state.

The first challenge means that even if surface water rights can be secured for environmental purposes they cannot always be protected from depletion resulting from groundwater pumping (i.e. San Pedro River).  The second, results from the lack of adjudication (another pdf) of most surface water rights in the state, which means that determining the value, the quantity, and the seniority of many of those rights is challenging - leading to high transaction costs that hinder the creation of robust markets.

What this all means, is that until the right conditions can be created for markets to reallocate water in the state, the best way to allocate water for environmental purposes may be by government edict (or enforcement of federal environmental laws - this could be another series of posts in its own right).  It's not entirely hopeless, the particular circumstances in some parts of the state do lend themselves to economic solutions to environmental problems with water allocation.  But those solutions most often require outright purchase or partial purchase of land with associated water rights - not the most efficient solution.  In the meantime, we can enjoy those rivers in the state where downstream senior rights holders (very politically powerful senior rights holders) will ensure that the rivers supplying those rights continue to flow.  But in other areas we have to rely on people flushing their toilets to provide the water necessary for rivers to flow.  How's that for imagery.

No comments: