Interjecting Economics into the Surface Water Dialogue

Abstract

This paper applies the conceptual lens of economic efficiency as a criterion by which to evaluate surface water in Texas. We identify two major problems. First, Texas has a water allocation problem limiting the ability to substitute groundwater for surface water to move water between river basins and to facilitate transfers within a river basin. Second, surface water is both underpriced and unresponsive to drought conditions preventing it from being used at its highest and best use. We propose a variety of partial solutions, which include facilitating greater reliance on water markets as well as a water tax that would vary across regions and over time to encourage conservation. Citation: Vaca M, Richards S, Davis A, Jackson K, Timur N, Manzoor F, Azam S, Feltman R, Griffin J. 2019. Interjecting economics into the surface water dialogue. Texas Water Journal. 10(1):112-127. Available from: https://doi.org/10.21423/twj.v10i1.7062.

Focused Flows to Maintain Natural Nursery Habitats

“…Also, focused flows could be secured through market-based approaches (i.e., purchasing permanent rights, spot market transactions, or options contracts) because smaller volumes of water are more likely to be available than larger volumes. It has been suggested that a water market in Texas could encourage water conservation (Vaca et al 2019). Focused flows from water transactions could also be created by mitigation or restoration actions, or a permanent water right.…”