WSP05845

• File Number: 8507
• Description: Rio Grande Project
• State: CO
• Basin: Rio Grande
• Date: 7/1/1997
• Title: Water Management Study: Upper Rio Grande Basin part 2
• Water Supply Pro - Doc Type: Report/Study

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An Overview of the Basin's Resource-Management Problems

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the nonconsumptive aspects, which roughly correspond to public goods. They
concluded that the consumptive and nonconsumptive values were about
equal. These findings probably are transferable, more or less, to the Upper
Rio Grande Basin. They certainly support the conclusion that, insofar as
decisions regarding the use of water in the Basin are based solely on the
private-good aspects of the resource, the value of the bundle of goods and
services derived from the water probably is substantially less than what
would exist if the decisions were based on both the private- and the
public-good aspects of the resource.

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The third study reinforces this conclusion further by showing directly that
New Mexicans place considerable value on the public-goods associated with
instream flows (Berrens et al. 1995). In response to survey questions
regarding a hypothetical policy to protect instream flows beneficial to the Rio
Grande silvery minnow (RGSM), New Mexicans indicated that, on average,
they are willing to pay $30 per year for five years to support the policy."
They also indicated a willingness to pay $79 to provide instream flows in all
of the state's major rivers. The amount specific to the Middle Rio Grande
area, where the last populations ofRGSM survive, multiplied by the state's
580,000 households, indicates the total willingness to pay for instream flows
is about $17.4 million per year and $87 million over five years. These results
do not apply solely to the RGSM, however, because, although the survey
informed respondents that, in addition to benefiting the RGSM, instream
flows also would support other fish and wildlife, vegetation, and habitat, as
well as recreational and viewing opportunities. Higher instream flows also
might yield additional economic benefits, including improved water quality,
filtration of sediments, and a reduction in the likelihood that other species
using the river's habitat will become threatened or endangered

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c. Resource-Management Institutions Generally Show a Strong Bias Favoring
Commodity Uses.-sMost ofthe laws and institutions governing the
management and use of the Basin's water and related resources have their

5 Residents living outside the state are also likely to place a value on instream flows
beneficial to the RGSM, although the magnitude of this value has not been estimated.
, Some individuals object to the term, bias, believing that it connotes disreputable
intentions. We strongly disavow such connotations and use the term in its strict economic
sense, expressing a tendency that has meaningful implications for the value ofthe goods and
services derived from the Basin's water and related resources, the impacts on the standards of
living and components oflocal economies in the Basin, and on the distribution of costs and
benefits among different groups. Insofar as there is a tendency toward suboptimal outcomes
with respect to one or more of these evaluative criteria, the resource-management institutions
yielding these outcomes are said to be biased,

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