The fantasy of market-based economics for water continues to intrude on the Colorado River, the most litigated river on the planet. The Colorado provides crucial water to seven states and Mexico. But the area is in a major drought and there isn’t enough water to go around.
Some want to create a water market as is being successfully done in the Murray-Darling Basin in Australia. But that area has a central authority. The Colorado does not. There are multiple entities governing the Colorado, plus a bewildering assortment of senior and junior water rights and the endless battle between Upper and Lower Basin states. The original agreement, the Colorado River Compact, reaches back to 1922 and while it is archaic, no one wants to change it for fear of losing water they get now.
A market based water system would inevitably mean that big cities and Big Ag would outbid everyone else. Smaller municipalities would be the major losers, as their cost of water would be much higher and maybe not even available at all. Phoenix and Las Vegas currently get tiny portions of Colorado River water. Given the chance to bid, they would drive the price up substantially, as would that 800 pound gorilla called Los Angeles.
Change will come to the Colorado River Compact. It will either be forced by drought or just maybe, smart people will change it before catastrophe hits.
At some point, maybe in the next few years, maybe in the next few decades, a water-shortage crisis will hit the Colorado River Basin and the communities it supports. Whether change happens before then or in the midst of a chaotic and painful drought, I suppose it is at least comforting that smart people are thinking about ways the transition to this water-poor future can work. In the meantime, I’m just feeling lucky I live in an Upper Basin state. (neener neener)