SOME PERSPECTIVES ON THE ECONOMICS OF SURFACE- AND GROUND-WATER ADJUDICATION

摘要

After many years and at great expense, western states, such as New Mexico, are undertaking the lengthy process of formally defining water rights. Adjudicating water rights is the first step towards an efficient and equitable system of water transfers, which is the key coping mechanism when fixed water supplies must serve a growing population and development, increasing environmental requirements, and continuing needs of the local agricultural economy. The widespread absence of such well-defined rights with respect to both surface- and ground-water sources has, however, contributed to inefficient patterns of water use, and is a growing source of legal and economic uncertainty confronting landowners, water managers, and regulators. In this paper, the authors focus attention on a few key concepts, that are unresolved as of yet in the Lower Rio Grande adjudication, and explore some of the economic implications of possible alternative resolutions that may give insight into more efficient design of the adjudication process. The paper briefly summarizes the adjudication process and how it alters the opportunities, incentives, and choices of existing water right holders - who are largely landowners and agricultural irrigators. It then addresses issues in the marketability of adjudicated water rights, their possible effects on existing land use patterns, and possible system-wide impacts. The paper concludes by highlighting the strengths and weaknesses of the current lower Rio Grande adjudication process, identifying opportunities to reduce adjudication costs and improve the efficiency of the process.