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<br />Comments to SWSf, November 3t 2003, by John Wiener <br /> <br />21 <br /> <br />associated with inherent inefficiencies in current use and that minimal efforts toward <br />conservation could yield the water required for alternative uses" U (Smith et ai, 1996.) <br /> <br />January 2003, news reports indicated unprecedented levels of leasing from agriculture to <br />municipalities, on a short-term basis, at very hjgh rates paid for the water (Rockv Mtn News. Jan <br />11, 2003; and see appended stories). Among the many bills in the legislature, HB03-1318 <br />extended water banking statewide; other bUrs allowed easier (though stilf seriously limited) <br />agriculture-to..municipal 'easing, and increased administrative authority for temporary substitute <br />water supply plans4 These changes could dramatically increase the transfers of this type for the <br />coming years4 <br /> <br />What's wanted? <br /> <br />The social goals include minimizing disruption of agricuJture and the local economies that depend <br />on it, while meeting the needs of municipalities4 Increased ffexibiUty in water transfers is desired <br />to reduce tocal impacts on areas of origin, and increase ability of agriculturar users to retain tjtle to <br />water rights while making occasiona' transfers of water (Governor's Commission on Saving Open <br />Spaces, Farms and Ranches, 2000). Agriculture, however, is an important source of state <br />income overaU, and often locaUy critical. Also, agricultural randscapes and land uses are a very <br />important amenity and source of environmental qualities highly valued in Colorado and elsewhere <br />(949, Walsh at al. 1994; Feather at ar. 1999; McGranahan1 1999; Fix et al. 2001; Heimlich and <br />Anderson 2001)4 While there has been serious impact on agricultural areas from transfers. water <br />avaUability and cost have not affected urban growth (Nichols et al. 2001), and are not expected to <br />constrain or channel growth. IdeaUy, changes would be promoted by economic incentives to <br />achieve mora yield from water use. through increased efficiency. <br /> <br />What's in the way of transfers? <br /> <br />There are two kinds of probrems which normally sJow the flow of changes of water from one use <br />to an other. at present. Firstf in terms of the legal institutions, II.. . Colorado law general ry does not <br />provide an incentive for conservation. II (Nichols et al. 2001: 140). Water not used is not the <br />property of the conserver. In fact, the farmts water rights may be the most varuabfe asset, so <br />there are strong incentives to avoid risking it by reducing water use~ Under prior appropr;ation <br />law, the extent of a water right is the extent of beneficiaf use, which excludes waste and means <br />that excess is legally taken out of the right. There is no incentive for .'savinglt water, except where <br />the water in question ;s "foreignU water imported from another basin, with the legal condition that <br />no water rights in return trows from that water may be established. This allows trans-basin water. <br />such as Colorado-Big Thompson Project water, and Frying Pan..Arkansas Project water, to be <br />freely moved and traded~ Thjs water is considerably more valuable in the market (see Nichors et <br />at 2001 for recent review; the 2000 prices they report were likely considerably exceeded in <br />2002). But in the case of Unative" water. water "5avedl~ is legally lost, hurting the irrigator as well <br />as failing to finance increased efficiency of application. Eventually, efforts to change this wiU <br />probably be made law; Colorado bHls failed for reasons likely to be fixed, in 1992, 1993, and <br />2001 ~ 2002 and 2003 (see Nichols at al. 2001: 140-141).. Senator Dyer seems to suggest the <br />change may be soon4 Meanwhile, the trans-basin water hefd by to cities now is insufficient to <br />comfortably meet municipal demands, especially in drought years, $0 there is still strong pressure <br />to move water from irrigation to urban uses; this will almost surely increase with the growth rates <br />forecast to continue (Luecke at aI2003). <br /> <br />Second, in terms of the engineering and evjdence needed for legal proceedingsf there are <br />enormous transactions costs jn making changes (Nichofs et al4 2001 provide recent review; 143- <br />149). including both the costs of legally securing changes, through the Water Court in Colorado, <br />and the costs of hydroJogic evidence and argument supporting a claim of fact about the water <br />which is legally transferable. These clajms wilJ include argument about the historic consumptive <br />usat which is the transferable fraction of the water right. and the remainder of the water which is <br />diverted but returns to the stream. The return flow is not fegally owned by the diverter and is not <br />transferab'e. <br />