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<br />Comments to SWSI, November 3, 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. II (Smith at ai, 1996.) <br /> <br />January 2003~ news reports indicated unprecedented levers of leasing from agrjculture to <br />munjc;paUties, on a short~term basjs; at very high rates paid for the water (Rocky Mtn Newsf Jan <br />11, 2003; and see appended stories). Among the many bills in the legislature! HB03-1318 <br />extended water banking statewide; other bills aUowed easier (though stUt seriously limited) <br />agriculture-ta-municipal ~easing; and increased administrative authority for temporary substitute <br />water supply ptans~ These changes could dramatically increase the transfers of this type for the <br />coming years~ <br /> <br />What.s wanted? <br /> <br />The social goars include minimizing disruption of agriculture and the local economies that depend <br />on it, while meeting the needs of municipalities. Increased flexibility in water transfers is desired <br />to reduce local impacts on areas of origint and increase ability of agricultural users to retain title to <br />water rights while making occasional transfers of water (Governor.s Commission on Saving Open <br />Spaces, Farms and Ranches, 2000)~ Agriculture, howevert is an important source of state <br />income overaU, and often Jocally critical~ Also, agrjcufturallandscapes and land uses are a very <br />important amenity and source of environmental qualities highly valued in Colorado and elsewhere <br />(e.g. Walsh at al. 1994; Feather et at 1999; McGranahan1 1999; Fix et al. 2001 ; Heimlich and <br />Anderson 2001). White there has been serious impact on agricultural areas from transfers, water <br />availability and cost have not affected urban growth (Nichols et al. 2001), and are not expected to <br />constrain or channel growth. Ideally, changes would be promoted by economjc incentives to <br />achieve more yield from water use, through increased efficiency. <br /> <br />What's in the way of transfers? <br /> <br />There are two kinds of problems which normallY slow the flow of changes of water from one use <br />to another~ at present. First, in terms of the legal institutions, .'. ~ .Colorado law generalfy does not <br />provide an incentive for conservation. II (Nichols at al. 2001: 140)i Water not used is not the <br />property of ttle conserver. In fact, the farm's water rights may be the most valuable assetf so <br />there are strong incentives to avoid risking it by reducing water use. Under prior appropriation <br />law, the extent of a water right is the extent of beneficial use] which excludes waste and means <br />that excess is legally taken out of the right. There is no incentive for Usaving-- water; except where <br />the water in question is "foreignll water imported from another basin1 with the legal condition that <br />no water rights in return flows 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. This water is considerably more valuabre in the market (see Nicho's at <br />ar. 2001 for recent review; the 2000 prices they report were likely considerably exceeded in <br />2002). But in the case of "native-. water, water IIsavedlt is regally lost, hurting the irrigator as well <br />as failing to finance increased efficiency of application. EventuallYt efforts to change this will <br />probably be made faw; Colorado bills failed for reasons likely to be fixed, in 1992, 1993, and <br />2001 , 2002 and 2003 (see Nichors at aJ~ 2001: 140,,141). Senator Dyer seems to suggest the <br />change may be soon. Meanwhile, the trans-basin water held by to cities now is insufficient to <br />comfortably meet municipal demands, especia1ly in drought years, so there is stjll 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 a' 2003). <br /> <br />Second, in terms of the engineering and evidence needed for legal proceedings, there are <br />enormous transactions costs in making changes (Nichors at al. 2001 provide recent review; 143- <br />149)t including both the costs of legally securing changes, through the Water Court in Colorado, <br />and the costs of hydrologic evidence and argument supporting a claim of fact about the water <br />which ;s regaUy transferable. These claims will include argument about the historic consumptive <br />uset 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 trow is not legally owned by the diverter and is not <br />tran sferable. <br />