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<br />Water markets can mean an end to water shortages <br /> <br /> <br />Page 5 of27 <br /> <br />appropriation doctrine were not attached to any <br />particular parcel of land. They could be bought, sold <br />and transferred from one use to another so long as <br />other water users were not hanned. During the Gold <br />Rush, writes Barton Thompson (1996, 2) "miners <br />frequently engaged in water transfers; as a claim <br />played out or failed, the claim's owner would move <br />or sell his related water rights." California courts <br />confirmed such transfers, calling such rights <br />"substantive and valuable property" that could be <br />sold or "transferred like other property," and the <br />courts of other states agreed. <br /> <br />Regulation Begins <br /> <br />As government followed the pioneers, however, so <br />did regulation of western water rights. Elwood <br />Mead, Wyoming's state engineer in the 1890s, was <br />a leading proponent of state water regulation. Mead <br />considered water a public resource and feared that <br />private ownership and water markets would lead to <br />speculation and monopoly control. Mead drafted his <br />mistrust of markets into Wyoming's water code by <br />banning water transfers. Several states copied <br />Wyoming's code, and at one point ten states banned <br />water transfers (Thompson 1996,3).(2) <br /> <br />Other restrictions on water rights arose as <br />legislatures codified the prior appropriation <br />doctrine. State laws required that water rights could <br />only be established by diverting water from a <br />stream. Claims to water left in the stream were not <br />legitimate rights. Indeed, as recently as 1965, the <br />Colorado Supreme Court ruled that a water right <br />could not be claimed by leaving a flow of water in <br />its natural stream to protect fish.OJ Today, the <br />requirement to divert inhibits water transfers that <br />could enhance environmental quality. <br /> <br />Another rule, "use-it-or-lose-it," requires <br />appropriators to use their entire water right or risk <br />forfeiting it. This rule was intended to encourage <br />reasonable water use and discourage speculation. <br />Now, it encourages waste. <br /> <br />The "salvaged water rule" also discourages <br />conservation. Most western states do not allow <br />users to keep or sell water that becomes surplus <br />through conservation efforts such as installing more <br />efficient irrigation systems, lining ditches, or <br /> <br />http://www . perc.org/publications/policyseries/priming_ full.php ?s=2 <br /> <br />12/2006 <br />