Alternative Water Transfer Methods: Review of Colorado Experiences

Varzi, Manijeh Mahmoudzadeh; Grigg, Neil S.

doi:10.1061/(asce)ir.1943-4774.0001401

Cited by 5 publications

(2 citation statements)

References 12 publications

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“…Standard prior appropriation rules apply to C‐BT water diversions and storage within the UCRB, but once the water enters into the C‐BT system along the Front Range, it can be bought and sold by C‐BT shareholders (e.g., municipal water suppliers, ditch companies) with little to no regulatory oversight (Mahmoudzadeh‐Varzi & Grigg, 2019; Womble & Hanemann, 2020b). Water in the C‐BT is allocated based on the ownership of homogenous “units” that entitle users to a portion of the annual project yield.…”

Section: Methodsmentioning

confidence: 99%

Using Financial Contracts to Facilitate Informal Leases Within a Western United States Water Market Based on Prior Appropriation

Zeff,

Hadjimichael,

Reed

et al. 2024

Earth's Future

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The ability to reallocate water to higher‐value uses during drought is an increasingly important “soft‐path” tool for managing water resources in an uncertain future. In most of the Western United States, state‐level water market institutions that enable reallocation also impose substantial transaction costs on market participants related to regulatory approval and litigation. These transaction costs can be prohibitive for many participants in terms of both costs and lengthy approval periods, limiting transfers and reducing allocation efficiency, particularly during drought crises periods. This manuscript describes a mechanism to reduce transaction costs by adapting an existing form of informal leases to facilitate quicker and less expensive transfers among market participants. Instead of navigating the formal approval process to lease a water right, informal leases are financial contracts for conservation that enable more junior holders of existing rights to divert water during drought, thereby allowing the formal transfer approval process to be bypassed. The informal leasing approach is tested in the Upper Colorado River Basin, where drought and institutional barriers to transfers lead to frequent shortages for urban rights holders along Colorado's Front Range. Informal leases are facilitated via option contracts that include adaptive triggers and that define volumes of additional, compensatory, releases designed to mitigate impacts to instream flows and third parties. Results suggest that more rapid reallocation of water via informal leases could have resulted in up to $222 million in additional benefits for urban rights holders during the historical period 1950–2013.

show abstract

Section: Methodsmentioning

confidence: 99%

Using Financial Contracts to Facilitate Informal Leases Within a Western United States Water Market Based on Prior Appropriation

Zeff,

Hadjimichael,

Reed

et al. 2024

Earth's Future

View full text Add to dashboard Cite

show abstract

“…Standard prior appropriation rules apply to C-BT water diversions and storage within the UCRB, but once the water enters into the C-BT system along the Front Range, it can be bought and sold by C-BT shareholders (e.g., municipal water suppliers, ditch companies) with little to no regulatory oversight (Mahmoudzadeh-Varzi and Grigg, 2019;Womble and Hanemann 2020b).…”

Section: Study Regionmentioning

confidence: 99%

Using financial contracts to facilitate informal leases within a Western United States water market based on prior appropriation

Zeff

Hadjimichael

Reed

et al. 2023

Preprint

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The ability to reallocate water to higher-value uses during drought is an increasingly important ‘soft-path’ tool for managing water resources in an uncertain future. In most of the Western United States, state-level water market institutions that enable reallocation also impose substantial transaction costs on market participants related to regulatory approval and litigation. These transaction costs can be prohibitive for many participants in terms of both costs and lengthy approval periods, limiting transfers and reducing allocation efficiency, particularly during drought crises periods. This manuscript describes a mechanism to reduce transaction costs by adapting an existing form of informal leases to facilitate quicker and less expensive transfers among market participants. Instead of navigating the formal approval process to lease a water right, informal leases are financial contracts for conservation that enable more junior holders of existing rights to divert water during drought, thereby allowing the formal transfer approval process to be bypassed. The informal leasing approach is tested in the Upper Colorado River Basin (UCRB), where drought and institutional barriers to transfers lead to frequent shortages for urban rights holders along Colorado’s Front Range. Informal leases are facilitated via option contracts that include adaptive triggers and that define volumes of additional, compensatory, releases designed to mitigate impacts to instream flows and third parties. Results suggest that more rapid reallocation of water via informal leases could have resulted in up to $222 million in additional benefits for urban rights holders during the historical period 1950 – 2013.

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Water use indicators and economic analysis for on-farm irrigation decision: A case study of a super high density olive tree orchard

Fernández

Alcón

Díaz-Espejo

et al. 2020

Agricultural Water Management

274

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Alternative Water Transfer Methods: Review of Colorado Experiences

Cited by 5 publications

References 12 publications

Using Financial Contracts to Facilitate Informal Leases Within a Western United States Water Market Based on Prior Appropriation

Using Financial Contracts to Facilitate Informal Leases Within a Western United States Water Market Based on Prior Appropriation

Using financial contracts to facilitate informal leases within a Western United States water market based on prior appropriation

Water use indicators and economic analysis for on-farm irrigation decision: A case study of a super high density olive tree orchard

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