OVERVIEW OF UNITED STATES WATER LAW

Law	Key Feature	Problem
Riparian Common Law	-reasonable use	-what's reasonable?
Prior Appropriation (1st in time, 1st in right)	-first -divert	-no limits -diversion required\ -no in-stream use
Forfeiture Law (Use-it-or-Lose-it)	-no ownership without use -permanent loss	-no incentive to conserve
Salvaged Water Rule	-no right to saved water	-no incentive to conserve; -cannot transfer
Beneficial Use	-decisions about valuable uses made in political arena	-inconsistent
Public Interest	-transfer rights restricted -political modification of existing rights	-no incentive to conserve -inconsistent

Environmental Amenities

A local environmental group is concerned because in dry years the stream is so low that fish die by the thousands. They want both Connie and Anna to leave more water in the stream. Suppose that the state has eliminated its use-it-or-lose-it and salvaged water laws but defines "beneficial uses" as mining, commercial, irrigation, electricity generation, and household.

1. What is the likely relationship between Connie and Anna and the environmentalists?
2. How might that relationship change if the state adds "conservation and recreation" to its list of beneficial uses?

Ground Water

Connie's cousin David lives in a different part of the country. While most of his neighbors are farmers, he has no fond memories of his childhood on the farm, so he started a bottled water company, pumping water from a huge underground aquifer to his bottling plant. His neighbors irrigate from the aquifer, and the nearby town draws its water from the same source. Recent studies show that 5 percent more water is being taken from the aquifer each year than returns from rainwater and other natural sources. The city council has asked all users to cut back their water use by 10 percent, voluntarily.

1. If none of the rules on the chart is in effectin other words, no property rights to the water in the aquifer are definedwill David abide by the voluntary cut-backs? Explain.
2. Suppose the city council puts a limit on the amount of water that can be drawn from each well. What might David do?
3. Suppose a salesman offers to show David a way to reduce his use of water by purchasing some new equipment for his plant. Is David likely to buy? Explain.
4. Suppose the city council offers to sell David a portion of the aquifer. What other property rights rules would encourage David to buy the aquifer? What rules would discourage him from buying it?

Suppose David buys water rights to 15 percent of the aquifer. An inventor offers to sell him a technology that will reduce his water usage by 10 percent. What rules would encourage David to buy this water-saving technology? What rules would discourage him from buying