Good morning. I finally figured out the full chain of my objection to enviro support for water markets this morning. (Thanks to Faith Kearns for giving me the final piece I needed.) I should write this up fully, but want to preview my chain of reasoning with you. The outline gives a pretty decent look at my belief chain. This and my three questions of water markets are among my better thought on the topic. Here we go:
Based on the myth that ag water use is inefficient, therefore conserve and market.
- It isn’t globally inefficient (basin efficiencies, there are other good reasons for good ag water management)
- Ag doesn’t sell conserved water, it conserves and irrigates more land.
- Buyers may not want the small intermittent increment from conserved water.
- Buyers want constant predictable large volumes.
- Growers sell their water or water rights when they are retiring land.
- “Debt, death, and divorce” has become a sort of motto, Deane said, because those circumstances drive people to sell.
Water markets that aren’t carefully and intentionally designed to accomplish a purpose instead become siphons of water out of the environment or farm retirement programs.
However, water markets are a crappy way to retire land.
- They leave a patchwork of stranded infrastructure behind, based on the arbitrary distribution of wealth at the beginning, not on what else the land could do nor the quality of the water delivery infrastructure.
- don’t necessarily retire lands in a way that can lead to other good outcomes.
- No less coercive than government planning and zoning, for the would-be holdouts.
- In water market, only potential reimbursement for water sale (which = retired land) is money (which is nicely flexible). But people might be more satisfied with other things, like the ability to stay on the land without farming, or keeping their community together, or taking care of their laborers.
If enviros really want to retire land, they should own that. Should intentionally choose among a range of tools to retire land, of which water markets might be one, but so might zoning decisions, state-level decisions about water use, or large scale voluntary agreements.
- It is cleaner and more honorable to be forthright about land retirement.
- Farmers know that water markets retire lands anyway.
- It allows for negotiations that are larger than money. Water users who will not get irrigation water in the future can think about what retirement terms would work for them. Doesn’t preclude buying people out.
- It signals to growers to start the emotional work of grieving. Without doing that, they’ll never be full participants in any transition. Pretending that markets might not mean land retirement fudges that truth, allow both sides to pretend that grieving isn’t necessary.
On the public record 
Water markets make the opportunity cost of water visible, especially if rights are defined to exclude extractions from the commons (others’ water or the environment). The move to markets, therefore, pushes water users (of all types but especially farmers) to reconsider their technologies and techniques for using water, and their options for selling water. One outcome is surely fallowing (or rainfed growth), but that’s only one outcome. If your goal is to improve “value” of water in use, then use markets; if you want to retire land, then ban land use. But don’t assume a 1:1 water trade to land retirement ratio.
(Also note that water markets reduce the cost of reductions in water use/deliveries, by allowing water to flow to higher valued uses. And, as usual, note that I think that environmental water flows should be separated from commodity water BEFORE rights are allocated or traded, as there’s no “market” for the environment.)