WWRC 94-33
Administrative, Institutional, and Structural Characteristics of a Functioning Water Market
Abstract
Voluntary water transfers through markets have been
advocated by many diverse groups as a means to reallocate scarce
water supplies in the semi-arid western U.S. Although transfers of
water rights have occurred almost since the creation of prior appropriation
laws over a century ago, functioning water markets have
been very slow to develop and are few in number. The structure,
composition, administration and transactions of one of the most
well established water markets, shares in the Bureau of Reclamation,
Colorado-Big Thompson project, are examined to better understand
the institutional and transfer conditions that sustain an
active water market. Results from a detailed study of C-BT project
records reveal that between 1970 and 1993 there were 2,698 transactions
through which over one-third of the project water changed
ownership or type of use. Further analysis shows that the transactions
involved many individual sellers and categories of buyers
with different uses, including agricultural buyers. The transfer
activity and efficiency of the C-BT market has lead some to suggest
that it be used as a model for other markets. However, because this
market has fewer institutional restrictions, a well developed infrastructure
and unique market conditions, it will be difficult to transfer
this model to other areas without accompanying modifications
in water right administration and institutions.
(KEY TERMS: water transfers; water markets; water rights; institutions.
reallocation; administration.)
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