Drought throughout the Colorado River basin is shrinking Lake Mead and threatening the long-term water supply of the Las Vegas Valley and other users. The solution to future shortages is simple: the creation of a free market where users buy shares and the natural forces of supply and demand are guaranteed to put the resource to its most productive use. (Hint: It’s not agriculture.)
Unfortunately, such a market-based approach to providing Western cities and farms with water isn’t allowed. Shares of Colorado River water were settled nearly a century ago through a compact that is poised to outlive the river system itself. Under the agreement with six other states, Nevada gets the smallest share of river water, 300,000 acre feet per year, which provides about 90 percent of the Las Vegas Valley’s water supply. Delivering that water requires expensive infrastructure, but the water itself is free, which has long given users little financial incentive to conserve. Indeed, the river is overdrawn right now.
Today, users have plenty of incentive to conserve. If Lake Mead’s surface level continues to drop — and there’s no reason to think it won’t — the federal government will declare a shortage that triggers reduced deliveries to users. Suddenly, if states fail to use less water, they’ll be forced to.
Appropriately, this urgency has led to a market-based approach to interstate conservation. As reported Saturday by the Review-Journal’s Henry Brean, the Southern Nevada Water Authority has joined the U.S. Bureau of Reclamation and municipal water agencies from Denver, Southern California and Arizona to create a fund that will pay other users to draw less water. Each urban agency will contribute $2 million, and Washington will contribute $3 million. The money will pay for efficiency improvements and conservation measures to help farmers and industrial operations waste less water. That will leave more water in Lake Mead and the rest of the river.
The money doesn’t directly buy water for the cities, nor does it transfer saved water to them. However, by ensuring less water is drawn, it might buy the water agencies time by delaying a shortage declaration and a share reduction. Thus, the expenditure helps protect municipal supplies.
That’s especially important in Southern Nevada. Ultimately, Lake Mead’s decline will force the shutdown of the intake pipes that supply the valley’s homes and businesses with water. The water authority is racing to complete a new intake at the bottom of the lake to guarantee water deliveries if the drought continues.
Regional water agencies are working together because they have to. They have a powerful mutual interest in a healthy Colorado River system: the preservation of their economies. Creative solutions such as this one are a start toward much harder, much more expensive decisions. About 75 percent of the river’s water irrigates desert crops, produce that never would have been grown if the water weren’t free, produce that easily could be acquired via trade with other countries.
Inevitably, there will come a tipping point where the water used by southwest farmers to irrigate their crops will be more valuable than the crops and the land the plants grow on. We might be there today. When that happens, funds that pay farmers to not farm will be money well-spent — just like the efficiency fund being created today.