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The term efficiency is used in this paper to refer to practices that generally provide the same or better water-related services using fewer resources. This might include getting a better shower, the same or bet- ter crop yield or better yet, farm profit, with technolo- gies and techniques that use less water. The term conservation is avoided here since it means so many different things to different people - it may include rationing and brown lawns or fields under the same umbrella as improved yields from advanced irrigation monitoring and scheduling schemes. Efficiency relates water use to end uses and the quality of the services that water provides. When possible, it includes resources other than water used in providing those ser- vices - for example, the energy savings from heating less water for an efficient shower or pumping less water in a more efficient irrigation system. Broader definitions of efficiency that look at maximiz- ing, across all water use sectors, the benefit from a given quantity of water are enticing, but must be used with great caution. In the author's opinion, the nar- rower definition given above works well within water use sectors, while the value judgements regarding the appropriateness of water use - especially between dif- ferent sectors - are best left to stakeholders, informed but not led by engineers and economists. In this sense it is important to view efficiency and allocation of water use as two distinct but intrinsically related con- cepts. Thus, the efficient and appropriate use of water is the two-pronged focus of this paper. This paper will look at why efficiency has become an issue, what the opportunities and impediments are now and will be into the future, and the broader con- text in which many think efficiency should be viewed. The fundamental goal is sustainability in water man- agement - economically, environmentally, and socially 84 ~ sound ways of managing our water resources. Efficiency has an important role in such a system. THE RISE OF EFFICIENCY AS AN ISSUE Technology To The Rescue? It can be argued that the path that has led to efficiency becoming an issue in the Colorado River Basin can be traced back to the water development projects in the West over the last century. Many of these develop- ments were quite dependent on subsidies. Governmental support of irrigation, municipal supply, and hydropower development as well as general farm subsidies were key to initiating many of these projects. These subsidies tended to hide the real cost of water, and further a perception of abundance. The related development of the "beneficial use" approach to water rights was a commonsense method of avoiding waste of the resource. With this historical background, several more recent events further set the stage. Increasing demands within the traditional water use sectors of agriculture, munici- pal supply, and hydropower and the increasing promi- nence of environmental concerns, Native American rights, and recreation interests has led to divisive com- petition. The intensity of this competition made the development of new efficiency techniques quite wel- come, with most attention being given to the technolo- gies at the expense of better management and behavioral changes. The lack of cooperation between sectors, the continuing perception of abundance, subsi- dies, and the "use it or lose it" concept all appear to have contributed to the present application of efficien- cy options in a rather piecemeal, short-sighted fashion, failing to take full advantage of efficiency's potential contribution to alleviating water scarcity and allocation problems.