The role of economics in transboundary restoration water management in the Colorado River Delta

Bark, Rosalind H., Frisvold, George and Flessa, Karl W. (2014) The role of economics in transboundary restoration water management in the Colorado River Delta. Water Resources and Economics, 8. pp. 43-56. ISSN 2212-4284

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Abstract

In fully allocated rivers, providing restoration flows requires water transfers from incumbent users. Such transfers are often contested and are complicated within federal rivers and international rivers. In this paper, we investigate ecological restoration flows in the Colorado River Basin, a basin that spans seven U.S. states, two Mexican states, and contains significant estuarine and wetland ecosystems. Our investigation of a one-time pulse flow for the Delta illustrates the potential of fundamental economic concepts (opportunity cost, marginal analysis, and Pareto-improving compensation) in developing restoration options. Specifically, through the quantification of trade-offs from water transfers, provision of guidance on how to affect such water transfers at least-cost to society, and the identification of "win-win" opportunities. For instance, we find that whole-basin scale management not only enables transboundary financial and water transfers but also supports creative options for water resources management such as the utilization of transboundary storage. We discuss new opportunities within the U.S.-Mexico Treaty framework that support transboundary restoration and the tension between this readiness to cooperate and competition for low cost water transfers.

Item Type: Article
Additional Information: Funding Information: We noted at the outset that if the benefits from transferred water are higher than the cost of the transferred water then there is a potential Pareto improvement. However, in order to implement the water reallocation in contentious situations it may also be necessary to demonstrate that there are mechanisms to compensate losers, i.e., an actual Pareto improvement. Economists often stop when a potentially Pareto improving exchange is found and sidestep the difficulties of compensating losers. The voluntary nature of water transfers envisaged for ongoing ecosystem restoration in the Delta would take the form of Coasian bargaining (at least between the parties negotiating the exchange). However, to secure environmental water in the longer-term, more comprehensive, regional agreements with more parties may also need to address a key political impediment to water transfers resulting from third party adverse economic costs (i.e., from fallowing) [32] . There is opportunity to learn from the design of long-term fallowing agreements in the basin. For example, the 35-year agreement between the U.S. Imperial Irrigation District and Metropolitan Water District of Southern California (IID-MWDSC) stipulates the formation of a special body of economists, the Local Entity, which is charged with evaluating third party impacts and devising programs to mitigate these impacts. Input-output studies were used to estimate the scale of third party impacts. Mitigation programs include the Competitive Grant Program, which in 2013 dispensed US$3 million in grant funding to Imperial Valley residents, non-profits and non-agricultural business owners. Publisher Copyright: © 2014 Elsevier B.V.
Uncontrolled Keywords: geography, planning and development,water science and technology ,/dk/atira/pure/subjectarea/asjc/3300/3305
Faculty \ School: Faculty of Science > School of Environmental Sciences
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Depositing User: LivePure Connector
Date Deposited: 18 Nov 2021 01:57
Last Modified: 18 Nov 2021 01:57
URI: https://ueaeprints.uea.ac.uk/id/eprint/82172
DOI: 10.1016/j.wre.2014.10.006

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