Phoenix admirably uses less water than it did decades ago, even as its population has grown hugely. The city wants to store its unused Colorado River allocation in Lake Mead for future use, but due to archaic, convoluted water laws, is not allowed to do so. This is the Tragedy of the Anticommons, where poor management leads to sub-optimal use of resources. As Butters once said on South Park, “Ouch, that makes my brain hurt.”
Inkstain unravels the tangled skein that allows such absurdities to happen. It should be noted that Phoenix storing water in Lake Mead would help southern Nevada, as it would mean less chance of water levels dropping below crucial Las Vegas intake pipes.
Prior to 2007, water use on the Lower Colorado River among Nevada, California, and Arizona was pretty much use-it-or-lose-it. The 2007 shortage sharing guidelines, an agreement among the states and the federal government, created a new management widget that changed that, called “Intentionally Created Surplus.” Lower Basin water users holding contracts with the Bureau of Reclamation could conserve water, jump through some bureaucratic hoops, and leave the water in Lake Mead for later. By the end of 2013, there was 1.1 million acre feet of ICS water in Lake Mead. In other words, this new institutional widget encouraged Lower Basin water users to conserve enough water to raise Mead’s elevation by something like 10 feet.
But Phoenix can’t use the ICS mechanism, because it is not a direct contractor. It gets its water instead through the Central Arizona Project, which as holder of the contract is the only one eligible for ICS. So CAP can store water in Mead, but Phoenix can’t.