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

Each of these types offederal interest is affected by risk and uncertainty, to
the point that the distribution of risk, itself, constitutes a federal interest in
the resources. In the past, federal expenditures in the Basin have been
prompted by a desire to have federal agencies bear risk and rescue resource
users who located in flood plains, undertook overly ambitious water-
development schemes, and overappropriated a resource without the means
to allocate it in an orderly manner. More recently numerous ecological and
economic risks have emerged including species extinction, ecosystem change,
and global climate manipulation that arise when one aspect of a resource is
exploited, ignoring its interconnections to other species and the overall
ecosystem.

Debates over the federal interest in a resource, versus private and state
interests, often overlook the distribution of risk. Any effort to insulate one
party from risk necessarily increases the burden on others. If a private
property owner has the right to manipulate her land and water resources in
a manner that may contribute materially to environmental change that
imposes costs on the larger society, does the federal government have no
interest in preventing these costs and no recourse other than paying the
owner not to manipulate the resources? If so, the larger society, acting
through the federal government, bears all the risk. But, if the government
retains an interest in the property and can coerce the resource owner to take
action to prevent or mitigate environmental damage, then the owner bears
the risk.

We recommend that each agency prepare a statement of its interest in the
Basin's resources. This statement should be informed by the results of
adopting an ecosystem-management approach, completing the assessment of
the Basin's ecological and economic conditions, and setting priorities. The
statement should be revised, as needed, to reflect new information and
institutions. It should explicitly address each types of potential federal
interest, described above, including those associated with risk and
uncertainty. Where necessary, it should identify where the federal interest
remains ambiguous and explore mechanisms for resolving the ambiguity,
taking into account this observation by one of America's Nobel Laureate
economists:

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Biological activity is an interconnected web, a complex dynamic system, in
which attempts to exploit one resource may lead to effects in quite different
domains. Hence, the concept of systems resilience comes to the fore. It is

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