1UCOWRJournal of Contemporary Water researCh & eduCationUniversities CoUnCil on Water resoUrCes JoUrnal of Contemporary Water researCh & edUCationissUe 144, pages 1-4, marCh 2010Water Reallocation in the West: An “Inconvenient” Truth?Olen Paul MatthewsDepartment of Geography, University of New Mexico, Albuquerque, NM Water reallocation is one of the most important and most contentious issues facing the West. Reallocating water already in use may be simple and relatively uncontroversial if the water is being transferred locally to a similar use. For example, farmers in the same irrigation district may transfer water between themselves relatively easily. However, if water is to be transferred to another type of use or away from an area, negative reactions often result. The Klamath Basin reallocation from agricultural to endangered species illustrates the complexity of such confrontations. Similarly, the transfer of water from agricultural uses to urban uses can be difficult, controversial, and time consuming. Although unallocated waters exist in a few, generally rural locations, these waters must often be moved in order to be used, leading to local protests. Pick almost any city in the arid West (Las Vegas, Denver, Santa Fe), and the rural-urban conflict can be illustrated. The issue is relatively easy to state – demand for water is increasing in the urban and environmental sectors, but most available water is controlled by agricultural users or, if undeveloped, is found in rural areas. In spite of local preferences to maintain the status quo, reallocation will occur whether “convenient” or “inconvenient.” Although protestors are sometimes successful, increased demands for a limited resource favor the eventual reallocation of some portion of the current water supply. However, reallocation is a dirty word in some places and conflicts seem inevitable. Resolving conflicts is difficult because the methods for reallocation are limited and often lead to some interests winning and others losing. What choices are there? How do people react when faced with reallocation? How can the potential conflicts be reduced? The answers to these questions are more complex than can be fully addressed in this dedicated issue, but reallocation can be put in context and hopefully stimulate further discussion.With a limited number of choices for reallocation, how can policy makers reduce conflict and achieve goals that benefit society and the environment? Two choices dominate – markets and legislation – with courts playing a role when disputes occur. Water markets have long been accepted in the western, appropriation doctrine states. A water right is looked on as a property right which can be sold and transferred to another location, user, or use. Transfers are allowed as long as third parties and the public interest are not adversely impacted. High transaction costs may be associated with market transactions because determining adverse effects is unique to each transaction. This occurs because water rights are defined by a set of relationships that exist between the right holder and others that may have an interest or legal right in the same water as it passes through the hydrologic cycle. This set of relationships is spatially and contextually unique to each right. Because third parties and the public are protected from adverse effects, as defined by this set of relationships, market transactions do not always occur smoothly. The direct parties to a transaction may be in a win-win situation (buyer gets water and seller gets money), but others with an interest may not be. For example, the public’s interest in water may not be adequately represented in a market transaction. The “public” may wantwater for in-stream flows, but the transaction might not provide water for that purpose. The public’s interest in water has also changed. When most agricultural water rights were established, economic uses that diverted water from streams were the norm. Today other public values need to be considered. Markets could be developed that incorporate public values and changes have been made in the way states interpret “public interest” in approving transfers, but change has been slow and uneven. Market rules need to be redefined to better accommodate the public interest.Because markets are not designed to take all public values into account, legislation has been used to protect these values. At the federal level this can be seen in the Endangered Species Act, Wild and Scenic Rivers Act, and the Clean Water Act. States have similar legislation protecting the environment, granting the public recreation rights, or withdrawing water from appropriation. This legislation is imposed on a system of water rights created under state law and recognized as legitimate at the federal level. Although state and federal legislation can impose limits on the way water right holders use their water, these limitations have to occur within the constraints of state and federal constitutions. At some point, restrictions may so limit water use that an unconstitutional taking of property may occur. The line between unconstitutional takings and legitimate regulation of property is not a clear one. Conflicts are exacerbated because of the attitudes water right holders have toward their rights. Although land owners have generally accepted land use regulations, restrictions on how rights holders use water are almost invariably met with protest. Regardless of constitutionality, legislative or regulatory limitations on the traditional uses of water are unpopular. This opposition is similar to what occurs when someone wants to transfer a water right to a different area. This brings us to the next question.How do people react to proposed reallocations? The simple answer is – generally not well. Emotions range from vehement opposition to mild disapproval. This occurs whether transfers are involuntary as a result of legislation or whether they result from a market transaction between consenting parties.