9369 ‎(2)‎

• UCREFRP Catalog Number: 9369
• Author: Colorado Water Workshop.
• Title: 12th & 13th Annual Colorado Water Workshop.
• USFW Year: 1987.
• USFW - Doc Type: Western State College of Colorado.
• Copyright Material: NO

are wasteful and inefficient. On the other hand, using the same criterion,
individual irrigators, residential water customers, and commercial and
industrial users are very likely to be making appropriate water use decisions.
The apparent contradictions between system allocation decisions and individual
user behavior is the residual of a paradox of overvaluing (but sometimes
underpricing) water in certain applications while ignoring its value
completely in others.

Modest Suggestions Concerning Colorado's Water Policy

Colorado has an abundance of water, but other natural resources have had
a more profound influence on the region's development. Furthermore, if one
had to identify a single component of infrastructure investment that has
facilitated development, it would be transportation systems, not water supply.

Nonetheless, Colorado's use of its water resources in the future is
likely to become more important. Although individual users, whether in cities
or in rural areas, are probably making efficient use of the resource, at the
system level, the vast differences in the relative value of water and the
often ignored instream value suggest that inefficiencies abound. Perhaps
there is a place for the State in helping make better use of this important
resource.

The primary role of the State, when dealing with water or any other issue
involving a public good, is to ensure that the interests of all its citizens
are protect.ed, To the extent that. it facilitates and encourages the
development of its natural l'esources, it has the responsibility to see that
t.hey are used effici ent] y (:i. e., t.hat there are not alternat i ves with greater
benefits or lower costs) and to protect against inequi table l'edistributions of
citizens' wealth, income, and assets. The courts protect equity, but
sometimes the transaction costs are high. The State's remaining institutions
are either passive or reactive, The one other "institution" operating in the
State---the market for water rights---is influenced by considerations for
efficiency, but often costly externalities escape detection and, at the
moment, entry is t'estricted. These gaps and shortcomings suggest that there
may be a greater role for the State to play. To find its niche and define its
role, the State might take advantage of one of the characteristics of the
mature phase of its water economy--ouser interdependencies and system links.

Two examples come immediately to mind: a partnership between agricultural
and municipal interests; and contractual arrangements between the State of
Colorado and downstream water users within the Colorado River basin. Both
would make it possible for the State to use its water resources more
efficiently and, at the same time, positively affect the agricultural economy
and recognize the value of instream flows.

Given the existing physical links between municipal and agricultural
water supply systems, the potential for enhancing these links, and the
relative value of water in municipal and agricultural uses, some movement of
water from irrigation to households and industries is inevitable. The State
can oversee this transition in such a way as to foster the interests of all
its citizens. In addition, to the extent that transfers from agricultural to

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