Applying a market-based approach to Colorado River management could ensure more robust and reliable supplies for farmers, communities and the environment, a new study has found.
Without considerable cutbacks in basin-wide water consumption, fish populations could face dire consequences for at least one month of the irrigation season, scientists warned in the study, published Friday in Nature Sustainability.
But if action were taken to deploy strategic water transactions among the basin’s stakeholders, resultant reductions in usage could improve the situation of more than 380 miles of restorable segments, per the research.
“By strategically directing river water to the right places, even under drought conditions, fish can be saved with targeted restoration at nominal additional cost,” said senior author Steven Gorelick, a hydrologist at Stanford University, in a statement.
The 1,450-mile Colorado River provides drinking water and agricultural irrigation to about 40 million people across seven U.S. states, 30 tribal nations and two states in Mexico. On the domestic side, the region is divided into the Upper Basin — Colorado, Wyoming, Utah and New Mexico — and the Lower Basin — California, Nevada and Arizona.
As the West becomes increasingly arid and a growing population consumes more water, this critical transboundary artery is dwindling. Meanwhile, the U.S. basin states are currently negotiating an update to the river’s operational guidelines, which expire at the end of 2026.
Stakeholders across the region adhere to a century-old Colorado River Compact that allocated 7.5 million acre-feet annually to each of the two basins. The average suburban household consumes about half an acre-foot of water per year.
Also at play is a historic U.S. West “water rights” system, a “first in time, first in right” approach to water that stems from the mid-19th century homesteading and gold rush era. At the time, farmers and miners secured and diverted water according to their arrival, rather than their geographical position along the river — creating a prioritization structure that is still in effect today.
But the authors of Friday’s study stressed that climate change has since exacerbated the Colorado River’s shortages, noting that recent research has indicated that the artery’s flows are at their lowest in at least 2,000 years.
“Given the overallocation of the river water, we explored how the needs of people and the environment can both be served,” Gorelick said.
With the goal of compensating for potential cutbacks, water users in the Lower Basin states have created systems for voluntary water market transactions, the authors explained.
The Upper Basin states — which are responsible for fulfilling the Lower Basin’s allocations — have also explored the idea of designing a water market. Such a market, the researchers continued, would involve proactive reductions that ensure downstream deliveries.
Nonetheless, they stressed that existing programs generally do not prioritize water necessary to maintain critical fish habitats.
To quantify the cost of improving these environments, the researchers simulated potential transactions and ecological effects at the river’s headwaters in Colorado — the source of about a quarter of the artery’s natural annual flow into the Lake Powell reservoir.
Farmers, irrigation organizations, cities and other water sellers would lease senior water rights to both governments and nongovernmental organizations interested in protecting fish habitats, per the model.
Those senior water rights, the authors contended, are critical to environmental protection because they are always fulfilled prior to any junior water rights claims.
“One key characteristic of water law across the western U.S. is our ‘use it or lose it’ principle,” lead author Philip Womble, who conducted the research as a Stanford graduate student, said in a statement.
“That can be a disincentive to water conservation,” added Womble, who is now an assistant professor at the University of Washington.
Womble, Gorelick and their colleagues assessed six scenarios to understand possible outcomes amid future drought conditions. They compared the effects of a “protected” market — in which newer uses would be legally barred from diverting restored flows — to an unprotected market with no such limits.
Ultimately, they found that without decreases in water consumption, the consequences to fish would be devastating. But when strategic water transactions were in place, 380 miles of river segments stood to benefit, while hundreds more could enjoy at least partial improvements.
“Strategic environmental water transactions would simultaneously reduce water consumption and preserve fish habitat at the lowest cost to the buyer,” the authors wrote.
Moderate reductions in water usage could be achieved with an investment of about $29 million in a protected market, while aggressive cuts could occur at a cost of about $120 million, according to the study.
In an unprotected market, similar such decreases would require about 12 percent more money, per the research.
The researchers suggested that one source of the necessary funds could be the increasing number of corporations seeking to offset water use from their operations.
Even the lowest cost water-use reductions, as modeled in the study, would yield improvement over about a third of restorable river habitat, the authors found.
But an investment that was just 8 percent more than the least-cost plan could triple the amount of restored habitat in a protected water market with aggressive usage reductions, according to the study.
“Rivers worldwide have been overallocated by society,” the authors concluded. “While strategic approaches may cost marginally more, we show modest additional funding can have outsized ecological impacts.”