Trock, Warren L.

English

Research Papers in Economics

THE CASE  OF WATER  RESOURCES
Warren L. Trock
Colorado State University
Policy  conflicts may  arise regarding  development and use of water
in two regions of the U.S. - East and West. One significant difference
separates  the two - the East  is well watered,  while  the West  is rel-
atively dry. So the availability of water for development and use differs
in the two regions.  Problems past and present are unique to both.
History of Development
Early development  of water in the  East was  largely  a private  and
local  government  responsibility  and  was accomplished  for municipal
and industrial  needs and  uses.  As towns and  cities  grew, local  water
resources  were  tapped to serve  the residents.  Early  industry was  lo-
cated  on or near large rivers and bays and experienced  little difficulty
in securing adequate water.
The  federal  government  became  involved with  water development
in the East as the needs for power generation,  flood control, and water
transportation  grew.  Large projects  were conceived  and implemented
to control and manage the great rivers of the East. The power require-
ments  of the industrial  areas  throughout  the East were  well  served
by the numerous  dams  and  reservoirs  with  electrical  generating  fa-
cilities.  Transport on the Mississippi,  Ohio and other rivers were viewed
as vital to the  economic  development  of the Midwest.
Development  of water in the West, via impoundments  and elaborate
water transport systems, was an early requirement for settlement and
economic growth. The earliest towns and cities were located on or near
streams and rivers. Development didn't occur without adequate water
supplies.  Some very interesting examples  of water transport  systems
can be found at old mining sites. Others can be found still functioning
in some  irrigated agricultural  areas.
The  great  reclamation  projects  of the  West,  funded  largely  by the
federal government, provided power, flood control, and huge quantities
of irrigation  water.  As in  the East,  electrical  power contributed  im-
portantly  to  municipal  and industrial  development.  But the creation
of water  supplies for agriculture  were  vital to the  West.  Most  of the
large  irrigated  areas have  reclamation  projects  as their  base.  Many
urban centers  exist within and depend  upon these projects.
138Not to be overlooked in the development of the West is groundwater
- the water resources created over thousands of years via percolation
into the  soil  and parent  material  and held in  aquifers.  As the tools
and methods for extraction of this resource were improved,  significant
areas  of irrigated  agriculture  were  developed.  The High Plains area
is the outstanding  example  of the use of this water  resource  in agri-
culture  and rural communities.
Issues  and Policies
Policies  have  evolved  concerning  development,  distribution,  man-
agement,  and use  of water  in both  the East and the  West.  In  some
cases  they  have  provided  acceptable  solutions;  in  others  they  have
extended  and complicated  the issues or problems.
We  have  a  national  policy  on quality  degradation  related  to  use.
Surface  and  ground  waters  across  the  nation  have  been  affected  by
waste disposal, soil erosion,  acid rain, and other polluting phenomena.
Our national policy is directed  to restoration of quality in water sup-
plies, but controversy  exists with respect to desired or achievable  lev-
els of quality, tradeoffs with valuable commercial/industrial  uses, cost
sharing  between  the  polluters  and  the  public,  etc.  Though  progress
has been made, debatable  issues remain. Policies  are unsettled.
Water for transportation was  for a long time assumed to  be in the
public  interest.  As  a  contribution  to  economic  development,  it  was
unquestionably a worthy use. But in recent years questions  of use and
payments for use have  arisen.  Does lower-cost water transport, made
possible  by the public investment,  give  some business entities an un-
fair advantage? Are user charges sufficient for maintenance of systems
and  even  returns on the public investment?  Is there  too little  or too
much  regulation  of use?  Policies  for regulation  and  use of water for
transportation  are unsettled too.
Though the problems associated  with declining groundwater  are more
critical  in  the  West,  they  exist in  the East  also.  In most  instances,
uses  of groundwater  are  depleting  the  resource,  i.e.,  withdrawal  ex-
ceeds  recharge.  What is the public's interest in this matter? Diminu-
tion  of stocks  of groundwater  can  and probably  will  affect  economic
viability  of  communities,  areas,  or  regions.  Some  states,  concerned
about impacts  of withdrawal,  now regulate wells,  pumping rates, and
annual  uses.  How  much control  is justifiable?  What  is the extent  of
individual  rights?  Should  states  be  responsible  for regulation  or  is
federal  management needed?
In the West, allocation of scarce water supplies among the competing
uses  is  the  dominant issue.  Our long  developed  policy  gives  the  su-
perior  rights  of use  to the earliest  claimants  and users.  These  have
tended  to  be  mining  and agricultural  users.  But competing  uses  of
water - municipal,  industrial,  commercial,  and recreational  uses-
have  developed  over  time.  Should  a  reallocation  be  attempted?  By
139what  means  and  with what  criteria?  Should  the  courts  be  asked to
settle the disputes? Should legislative acts be undertaken? Should the
market  be  employed  giving  users  opportunities  to  bid  for water  or
rights to water? We would, for example, pay more for a gallon of water
to drink than to grow a bushel of corn.
And  of course,  further  development  of water supplies  is  an  issue.
Whose responsibility is it to continue the development of water in the
U.S. but specifically  in the West? Who benefits and who pays? If ben-
efits accrue largely to the region, e.g. the Southwest, should the nation
(taxpayers)  bear  the  costs  of development?  Does  regional  (western)
development  of water  supplies  give comparative  advantage  to  some
water  users  and cause  significant  shifts  of productive  activity?  The
last two administrations have reduced the level of federal involvement
in water resource development.  Has this been largely an issue of budget,
or have  philosophical differences  been most important?
These are only a few of the issues and problems which are and have
been  the  reasons  for  policy.  Others  are  important  and  occupy  the
thoughts  and influence  the actions  of many  individuals  and  groups.
What  is  the responsibility  of the  educator,  i.e.,  the  researcher  and
extension  agent, in the debate  over issues,  problems and policies? What
should be  our involvement,  our strategies,  our  approaches  to educa-
tion?
Educational Programs
After consideration of the above and other issues of policy, interested
participants  in the National  Public  Policy Education  Conference  rec-
ommended  educational  programs  as follows:
1.  Defining the dimensions of the problem. Debate of issues  of de-
velopment  and use of water  is often clouded  by a lack of information
about them.  Such questions  as, Who needs  (and is willing to pay for)
water? What rates or levels of use can be reasonably anticipated?  How
much water  is  available?  How and  at what  cost can  water be trans-
ported? What conservation measures can be employed?, must be asked
and answered. Educators can facilitate the debate by providing factual
information and a forum within which the debate  can take place.
2.  Understanding water and water systems.  Often  the arguments
about  development  and use  are  confused by a lack of understanding
of the hydrologic  system.  Where  and how  does the water  exist?  How
are  surface  and  groundwaters  related?  What  is  the  effect  of use  of
water on the system? Is recycling a possibility and how will it impact
quantity and quality  of water in the system? Our colleagues  in engi-
neering and natural  resources  can  give assistance  in programs  that
will  improve understanding of water issues.
3.  Economic and institutional  considerations in water development
and use. Persons concerned  with management and use of water must
140be  aware of institutions we have  employed  (policies) to cause  and fa-
cilitate water development,  allocation  and use, and economic  circum-
stances (costs, prices, use, values) which surround the use of water for
various  purposes.  Discussions  of further development,  alternative  uses,
comparative values,  etc. of water will take place within this economic/
institutional framework.  Only  frustration can  come  from a debate  of
issues that ignores water law, water policies, and water markets. The
policy educator can be especially helpful with programs which address
the economic and institutional considerations.
4.  The viability of water markets.  Competing  users  are  naturally
interested in the market as a developmental/distributional  mechanism
for water.  And the traditional rights holders and water users are nat-
urally suspicious of the mechanism.  An educational program that pro-
vides for examination of the market as an alternative to rights as an
allocative  device  for the  water  resource  requires  thorough  develop-
ment.  Impacts  must be well analyzed  and projected,  and the process
for  change  to a  market orientation  must be  well thought  out.  Such
questions  as:  What  kind  of market?  What  would  be  for  sale?  Who
would manage the supply? What kind of controls? will be in the minds
of interested parties. Some reasonable  estimates of supply, costs, uses,
values, and prices will be demanded.  This program will require  much
preparation by the policy educator.
5.  Uses and longevity ofgroundwater. Where groundwater is of prin-
cipal  (sole)  concern,  the  question  of withdrawal  and use  is critical.
What  physical  quantity  of water exists?  What  are  past and current
levels of use? What are the costs  of withdrawal  and use? What is the
economic  lifetime  of the aquifer?  Not  only  do  economic  enterprises,
like farms in the High Plains, depend on this water source, but rural/
urban communities  do  also. Studies  like that of the Ogallala  aquifer
are essential, and they must be followed by educational programs that
extend  the information,  stimulate  the debate,  and facilitate  the deci-
sions that will be so important to the use of groundwater.
Other programmatic possibilities surely exist and demand attention.
Policy  educators  must recognize  them and  give the issues/problems/
policies their attention.
141

THE CASE OF WATER RESOURCES

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