Water banking, conjunctive administration, and drought: The interaction of water markets and prior appropriation in southeastern Idaho

Abstract

Despite recognition of the potential economic benefits and increasing interest in developing marketing instruments, water markets have remained thin and slow to evolve due to high transactions costs, third party effects, and the persistence of historical institutions for water allocation. Water banks are a marketing instrument that can address these obstacles to trade, allowing irrigators within a region to exchange water in order to mitigate the short-term effects of drought. Water banks coexist with the institutions governing water allocation, which implies that rule changes, such as adoption of a system of conjunctive surface water-groundwater administration, carry implications for the economic impacts of banking. This paper assesses and compares the welfare and distributional outcomes for irrigators in the Eastern Snake River Plain of Idaho under a suite of water management and drought scenarios. We find that water banking can offset irrigators' profit losses during drought, but that its ability to do so depends on whether it facilitates trade across groundwater and surface water users. With conjunctive administration, a bank allowing trade by source realizes 22.23% of the maximum potential efficiency gains from trade during a severe drought, while a bank that allows trade across sources realizes 93.47% of the maximum potential gains. During drought, conjunctive administration redistributes welfare from groundwater to surface water producers, but banking across sources allows groundwater irrigators to recover 88.4% of the profits lost from drought at a cost of 2.2% of the profit earned by surface water irrigators.

Enhancing drought resilience with conjunctive use and managed aquifer recharge in California and Arizona

“…The term 'groundwater banking' is used throughout the western US and includes (1) MAR and (2) 'in lieu' recharge [13]. 'In lieu' recharge is CU with substitution of surface water for groundwater resulting in an equivalent volume of groundwater that is not pumped credited to the bank and no physical recharge structures are required [14][15][16]. Ideal regions for CU and MAR include alluvial plains with large rivers collocated with major aquifers [17].…”

Applying Place-Based Social-Ecological Research to Address Water Scarcity: Insights for Future Research

“…WaterSES is also addressing different institutional settings that govern water resources using cases in Idaho and Texas [46]. These case studies highlight concerns about jurisdictional and political constraints in water management, such as historic water rights [47], and how scientific knowledge has not been fully transmitted to practitioners and policy makers [48]. For example, novel research methods, such as participatory system dynamics, have been used to engage stakeholders and create a nexus of science, policy points, and social concerns as well as local knowledge to describe the issue of water scarcity with an emphasis on groundwater [48].…”

“…Finally, more effective tools and strategies for translating and communicating sustainability science are required, including the use of graphics, personal stories, social media, and videos [16]. Addressing this suite of needs would be immediately useful in achieving place-based governance solutions [47].…”

Identifying Irrigated Areas in the Snake River Plain, Idaho: Evaluating Performance across Composting Algorithms, Spectral Indices, and Sensors

“…We supplement this dataset with randomly generated points that lie within the geospatial boundaries of the place of use for prior appropriation water rights [34]. Farmers are restricted to applying water for irrigation within the place of use specified as part of a water right [35,36]. Using these supplementary data facilitate the process of identifying control points that are irrigated.…”