The West Is Trading Water for Cash. The Water Is Running Out

...But in the Southwest, it’s the increasing lack of water that’s threatening the agricultural economy, as well as the welfare of 40 million Americans and part of the food supply for the entire nation. The 1,450-mile-long Colorado River serves as a source of water for seven states, but climate change and overuse have caused its levels to drop precipitously. From 2000 to 2014, flows declined 19% from the 20th century average, according to American Geophysical Union Water Resources research. By 2100, the river flow could fall as much as 55%. With big western cities clamoring for a share of the river’s diminishing supply, desert farmers with valuable claims are making multimillion dollar deals in a bid to delay the inevitable. It’s an echo of the historic manipulation that long ago subdued this waterway, the carver of the Grand Canyon and icon of the American West. But if the river’s water keeps falling, more radical measures will be needed to protect what remains. Since the 19th century, the biggest users of Colorado River water have been farmers, turning millions of acres of unforgiving landscape in California and Arizona into a patchwork of green and brown visible from space. For almost 100 years, their water supply has been governed by agreements among the states along the river basin. But the water itself is doled out by state administrators in part under a “first in time, first in right” mechanism that’s even older, dating back to the decades following the American Civil War. But in 2026, a more severe reckoning looms when a long-term deal must be struck. The Colorado River provides drinking water for 1 in 10 Americans, many in cities such as Las Vegas, Los Angeles and Phoenix. It also waters almost 90% of the nation’s winter vegetables, according to American Rivers, an advocacy group. When the broader compromise is due, it may remake how an entire region grows food and uses water...MORE

To learn how markets can address these issues, see:

Water Markets as a Response to Climate Change

The Solution to California’s Drought: A Free Market in Water

Market Magic: Water Woes (video)

and more at PERC