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Monday, March 24, 2008

Water Rights- Use it or lose it?

Colorado House Bill 1280 proposes to change the way water rights are administered in Colorado.

Under the current system, if the holder of the rights does not use the water, they risk having their water rights revoked. This is a form of Adverse Possession, which has also been in the Colorado news when landowners used adverse posession to sieze ownership of property that they had trespassed on for several years.

http://www.abajournal.com/news/landowners_lose_lawyers_win_in_adverse_possession_fight/

From a Liberty and Efficiency perspective, it makes sense to remove the provision. Under the current system, water users would need to ensure that they used water in line with their past draws, whether they needed it or not. Thus, there is an incentive to waste, as conservation will lower or eliminate the amount of water the entity is allowed to draw. This benefits efficiency as it removes a discouragement to conservation. Changing the law benefits Liberty arguments as it give the owner greater control to dispose of the water (or not) as they see fit.

However, there is a significant equity hurdle to this change. In this sense, water is a perishable good- once it flows downstream, it is gone. A person holding water rights that doesn't draw the water is not just wasting it for them , they are preventing others from utilizing it (in their area) as well.

In 2004, the State of New Mexico (which has a 'use it or lose it' policy) condemned water rights that had been held by a mining company. The mine in question had closed in 1939, but continued to hold rights for 2200 acre feet of water a year, even though it had not been used for 65 years.

http://www.waterbank.org/Newsletters/nws45.html

This change in water rights may keep more water in the river, but it may be at the expense of drinking water if abandoned rights cannot be challenged.

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