The West Needs a Water Market to Fight Drought

Outdated laws are wasting the region’s scarcest resource. Water should be tradable so it finds its most urgent uses.

From WSJ, 10-24. By Robert Glennon and Gary Libecap. Excerpts:

"A reduction of just 4% in agricultural consumption would increase the water available for residential, commercial and industrial uses by roughly 50%"

"Traditional solutions—diverting more water from rivers, building new reservoirs or drilling additional groundwater wells—are no longer ways to substantially increase the water supply."

"we, along with co-author Peter W. Culp, propose that states use market tools to promote water trading. That is, farmers or other users who reduce their consumption should be allowed to lease or sell the conserved water."

"Western growers of alfalfa—a low-value and high-water-use crop—are on pace this year to export two million tons of alfalfa to China, South Korea and Japan—produced with enough water to supply several million U.S. families for a year or to irrigate hundreds of thousands of acres of high-value almond trees. If there were ways to trade water, some farmers could cut back on the production of more water-intensive, lower-value crops and lease or sell the conserved water to desperate fruit and nut growers or thirsty cities."

"Most farmers don’t have that option."

"Western water law generally inhibits trade in the water used to grow the commodities."

"A market in water would encourage efficiency by stimulating innovation, promoting specialization and allowing water to move from lower-value to higher-value uses. Farmers who have an opportunity to trade a portion of their water have an incentive to take measures, such as installing more efficient irrigation systems, to free up water for trade."

Mr. Glennon, a law professor at the University of Arizona, is the author, most recently, of “Unquenchable: America’s Water Crisis and What to Do about It” (Island Press, 2009). Mr. Libecap, a professor at the University of California at Santa Barbara’s Bren School of Environmental Science and Management, is co-author of “Environmental Markets: A Property Rights Approach” (Cambridge University Press, 2014).