Document Type



Natural Resources Journal




The prior appropriation doctrine that dominates the water laws of the Western United States was perhaps the inevitable consequence of the need to manage water resources in a region where the demand for water often exceeds the supply. This doctrine has proved surprisingly clumsy at accommodating changing water needs during times of shortage. Economists have long viewed water markets as an attractive solution for reallocating water to meet the demands of an evolving community of water users. But most western states have been skeptical--sometimes even hostile--to proposed changes in historic water use patterns. This reluctance to encourage the transfer of existing water rights to serve critical new water needs too often leads to the development of new and expensive water projects with serious adverse environmental consequences. Still, many water transfers have gone forward and many involve moving water from agricultural to urban use. This is not surprising since most of the water used in the West goes to irrigated agriculture and most of the new demand is coming from the West's burgeoning urban centers. But for a variety of reasons, transfer activity has proved inadequate to accommodate these growing needs. Climate change now threatens to exacerbate this problem, by diminishing water supplies in some of the most arid regions of the West. New ways of thinking about reallocating water could go a long way to solving this problem. This article offers concrete recommendations for promoting robust water markets that can address water shortages that are otherwise likely to confront the West. The article concludes with a series of practical and creative ways for reforming western water law to help ensure that water gets to where it is needed most efficiently.