WSP01337

• File Number: 8051
• Description: Area of Origin
• Basin: Statewide
• Date: 10/1/1985
• Title: Addressing the Area of Origin Problem - A Research Report Prepared for the Colorado Water Resource Research Institute
• Water Supply Pro - Doc Type: Report/Study

DRAFT

one gets paid, and the reason is that no one has or can get title

to unappropriated water without putting it to a beneficial use.

Naturally, water remains unappropriated because there are no

currently profitable uses in the basin.

The main rationales for paying some form of compensation are

(1) equity to damaged parties and (2) to make sure that those

planning out-of-basin transfers take into account all of the

costs caused by the proposed transfer. Equity is the more

obvious motivation, for if parties are injured by acts intended

to benefit others that are beyond the injured parties' control

and in which they had no voice, popular opinion would agree that

the injured parties deserve compensation that will leave them no

worse off than before.

The second point is a bit more complex but at least as

important as equity. . Making choices so: that the excess of

.benefits received over costs paid is maximized is referred to as

economic efficiency (as opposed to phy~ical or engineering

efficiency.) When decisions are made from a state's point of

view, the sta te and its populace should be concerned tha t .the

benefits of a proposed action exceed the costs of that action.

Some types of decisions (including most out-of-basin transfers)

are left to private decision-makers or public units below the

state level, so it is desirable to create a legal environment in

which the decision-making entity must take into account all costs

imposed by their decisions. If out-of-basin transfers impose

costs on the area of origin that are currently unidentified

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