E-IPER Dissertation Defense : Philip Womble "Water rights markets in the 21st century"
- Thursday, Jul 23, 2020 2:00 PM
- Zoom Webinar
- Faculty/Staff, Students, Alumni/Friends
- Emmett Interdisciplinary Program in Environment & Resources
"Water rights markets in the 21st century: Transaction costs and optimal environmental water portfolios in Colorado, USA"
In arid regions across the world, water markets are implemented to efficiently manage water scarcity and restore streamflows for dewatered ecosystems. The western United States hosts prominent water markets, with >$500 million traded annually and environmental transactions comprising about a third of the volume traded from 2008-2018. However, these markets are commonly described as failing to achieve efficient water management because of substantial legal barriers to trade. Also, environmental water marketing remains immature, with mostly opportunistic transactions. This dissertation examines potential solutions to these shortcomings in the state of Colorado, which has some of the most developed water markets and water law in the U.S. First, I examine barriers to trade – non-water transaction costs incurred for legal approval of water transfers – using quantitative and qualitative survey data from 100 water professionals. My statistical models depict physical and legal drivers of transaction costs and show that legal changes that clarify the definition of water rights couple some of the greatest transaction cost reductions with relatively low negative externalities. Second, I develop an integrated ecohydrologic-economic-legal simulation-optimization model that maximizes ecological outcomes from environmental water marketing in the Upper Colorado River Basin. The Colorado River is the world’s most overallocated river. Results show that optimal environmental water rights portfolios consist heavily of informal water transactions that evade legal barriers but provide no legal protection for restored streamflows; include large reservoir leases that offer temporal flexibility and achieve scale economies; and select transactions in especially dewatered river reaches. Taken together, the results illustrate how 19th century water rights law constrains 21st century water markets.