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<br />Water markets can mean an end to water shortages <br /> <br />Jage 19 of27 <br /> <br />states have benefited from Arizona's underuse of the <br />Colorado for years, because unused water left in the <br />river is free for the taking by the two downstream <br />states. Recognizing that this source will become less <br />secure as Arizona's use increases, California and <br />Nevada are on the lookout for secure water supplies <br />to meet growing demands. <br /> <br />CAP's fiscal losses plus water scarcity in California <br />and Nevada are moving these states toward <br />interstate water marketing. Prices in California and <br />Nevada currently range between $150 per acre-foot <br />for water from irrigation districts and $1,600 per <br />acre-foot for desalination (Fuller 1996, 114). If <br />CAP received $140 per acre-foot for its water, its <br />losses would be covered. These vast differences in <br />prices suggest substantial potential gains from <br />interstate water trading. <br /> <br />Regional water trading in Australia is already taking <br />place. The first temporary intervalley water transfer <br />occurred in 1992. It involved a five-year lease of <br />7,982 acre-feet from a property on the <br />Murrumbidgee River in New South Wales to a <br />cotton farm on the Lower Darling River in South <br />Australia. Although local farmers feared that a <br />permanent transfer would damage the local <br />economy, a lease was acceptable because it would <br />increase the flow on the Murray River and because <br />it could increase net wealth by as much as $2 <br />million. "Since then, temporary interbasin transfers <br />have expanded considerably," writes Gary Sturgess <br />(1996, 135). From July 1, 1994, to June 30, 1995, a <br />net 87,000 acre-feet of water was traded out of the <br />Murrumbidgee. The Murray-Darling Basin <br />Commission, which was originally formed in 1917 <br />to build and maintain physical infrastructure on the <br />Murray River, today is managing water trades and <br />serving as a regional federation (Sturgess 1996). <br /> <br />James Huffman has proposed a similar "North <br />American water marketing federation" to deal with <br />water issues between the United States and Canada, <br />and the United States and Mexico. As Huffman <br />(1994, 158) describes it, such a federation would <br />enforce water rights "free from the distorting <br />influence of nationalism, provincialism and political <br />competition." It could soften the present resistance <br />to cross-border transfers between Canada and the <br />United States. <br /> <br />http://www . perc.orglpublications/policyseries/priming_ full. php ?s=2 <br /> <br />~/1212006 <br />