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Inefficient Efficiency: Crying Over Spilled Water

December 2016

Citation: ELR 11046

Author: Vanessa Casado Pérez

As the drought in western states worsens, the agricultural sector is being criticized for failing to adopt technical responses, such as shifting to less waterdemanding crops and state-of-the-art irrigation systems. However, these responses alone are insufficient to reduce water consumption if unaccompanied by changes in how the law defines and allocates water rights. This Article proposes a redefinition of water rights to ensure that changes in crops or irrigation techniques are socially efficient. It proposes “prior consumption” as an additional measure of water rights in prior appropriation regimes, one that more accurately reflects the true social cost of agricultural water use. This would prevent farmers from taking advantage of technical responses to increase their water use and would protect downstream users and the environment. In addition, water markets would benefit, since water rights would be better defined and the review process of water market transactions would be streamlined. The proposal is consistent with the underlying principles of prior appropriation, and would survive a potential takings challenge.

Vanessa Casado Pérez is an associate professor of law at Texas A&M School of Law and a research associate professor at Texas A&M Department of Agricultural Economics.

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