WSP09398

• File Number: 8507
• Description: Rio Grande Project
• State: CO
• Basin: Rio Grande
• Date: 7/1/1997
• Title: Water Management Study: Upper Rio Grande Basin part 3
• Water Supply Pro - Doc Type: Report/Study

Water Management Study: Upper Rio Grande Basin

efforts can do is to provide a better forum within which to deal with the
conflicts that are inherent in the Basin. At their heart, disputes over
resources are nothing more or less than the forces of economic competition at
work. Efforts to facilitate transactions can never be a substitute for
competition, but they can help competitive forces work more efficiently.

2. Curtail Externalities

We recommend that the federal resource-management agencies work
cooperatively to curtail the externalities of federal resource-management
activities. In particular, they should continue to work in multi-agency
groups to address the concerns of each agency, as they have done in the
Middle Rio Grande Valley with respect to the Rio Grande silvery minnow
during last year's drought. Prior to this, each of the agencies tended to focus
on its own concerns independent of the others'. In other words, each agency
considered the impacts of its actions on other agenci~ to be an external
concern. More recently, representatives of the agencies have recognized that
the concerns of all the agencies must be dealt with jointly-they have worked
to internalize the externalities. We encourage agency heads to support
further efforts of this kind.

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As part of the effort to reduce externalities, federal resource-management
agencies, acting individually or jointly, periodically should prepare a
summary of how their activities affect the value of resource-related goods
and services and their impact on jobs, incomes, and other indicators of
standard ofliving. These summaries should show, for example, the extent to
which the different competing demands for water and related resources
depend on, or are constrained by, the operation offederal facilities and the
expenditure of federal funds; as well as the extent to which the value of
irrigated farmland, residential lots in the floodplain, and other properties are
enhanced or diminished by federal activities.

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We also recommend that the BuRec, CoE, and other resource-management
agencies, working with Congress, broaden the scope of activities authorized
for federal dams and other facilities. At one time, statutory authorization
directing an agency to operate a facility to meet the demands of one subset of
resource competitors may have covered the facility's primary interaction with
the economy. Now, however, each facility can significantly affect a much
broader range of competitors. Management agencies have worked within the
statutory constraints to accommodate this shift. We recommend that the

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