Have We Got a Deal for You: Can the East Borrow from the Western Water Marketing Experience

by Janet C. Neuman

Jan 1, 2004
Markets of one sort or another have played a role in western water allocation for many decades, and this role is on the rise for a variety of reasons. In contrast, water markets have not played a significant part in water allocation east of the Great Plains states. Eastern markets have not developed for two main reasons. As long as there was plenty of water to go around, there was little pressure to move water from one use to another -- something that markets can help to accomplish. Also, because laws poorly defined riparian rights for so long and usually limited riparian water to use on riparian lands, Eastern water law did not readily define an interest subject to market transfers. However, now that statutory changes have begun to firm up the parameters of some water rights, while also loosening restrictions on the places of use, there is more room for eastern markets to develop. As the East looks to the West for help in managing an increasingly scarce resource, markets are one device attracting interest. This article offers one tool for consideration -- using water markets to preserve instream flows. The article briefly describes the use of markets in the West, particularly streamflow markets, and addresses some of the pros and cons of water marketing. The article then considers the similarities and differences between eastern states and the western states where these markets are flourishing, and offers some thoughts on what a streamflow market might offer to an eastern state.

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