Emily Halvorsen


There is a looming problem facing the Colorado River Basin: an increasing likelihood of a compact call on the Upper Basin due to projected climate change and population growth stresses on the Colorado River. To address this problem, water resource managers and natural resource management organizations throughout the Upper Basin have proposed a leading approach of an interstate water bank program. There are three main shortfalls to this though, which do not make the program a viable approach in addressing the problem: (1) legal uncertainty regarding individual water rights; (2) concerns regarding speculation; and (3) lack of incentives for state participation. Recognizing compact compliance as a beneficial use addresses these three shortfalls and strengthens the viability of the water bank program in alleviating the problem facing the Colorado River Basin. Compact compliance as a beneficial use provides legal certainty regarding individual water rights, which in turn encourages participation of depositors in the water bank program. More depositors equate to more water available in the bank for the Upper Basin to meet its compact obligations and reduce the risk of shortage. Compact compliance as a beneficial use also quashes any fear that the bank is merely speculation on behalf of the Upper Basin states. This encourages state participation because it removes the possibility of a barrier to participating in such a program. Finally, compact compliance as a beneficial use incentivizes states to negotiate and contract to an interstate water bank agreement because it decreases the transaction costs associated with such a program.