Abstract: Environmental water markets are a leading mechanism for restoring streamflows for dewatered ecosystems in the Colorado River basin and across the western United States. However, no regionwide analysis systematically evaluates why market activity (e.g., volume, number of transactions) varies across river basins or characterizes the types of transactions in this market. Through direct interviews with transaction professionals, we are compiling a comprehensive dataset of all environmental water market transactions across the western U.S. in recent years and comparing these with various legal, institutional, economic, hydrologic, and social factors to identify key reasons for variability in environmental water market activity.
To date, our data collection and analysis have focused on the Colorado River basin states of Arizona, Colorado, New Mexico, Utah, and Wyoming, where we have documented ~450 environmental water transactions from 2014-2020. Since 2000, the Colorado River basin has fallen into a megadrought, experiencing a multidecadal dry period nearly unrivaled in its 1,200-year paleo-record, and in 2021 the Bureau of Reclamation declared the river’s first-ever water shortage. Our transaction data show that in recent years, environmental water markets in these basin states have matured and that transactions have grown more heterogeneous, including system conservation projects that aim to boost reservoir levels but have ancillary environmental benefits, multi-objective transactions, dry-year options, split-season leases, and informal transactions that minimize transaction costs. Also, although existing research and advocacy have placed significant emphasis on developing state water laws that are favorable to environmental water marketing, our analysis reveals how legal factors outside of state water law (e.g., the Endangered Species Act) and non-legal factors have influenced variation in market-based environmental water recovery in these states. We are currently in the process of collecting and analyzing similar data from other western states, including Washington.
Our Speaker: Philip Womble is an attorney and a hydrologist specializing in water policy and water markets. He is a legal/postdoctoral fellow with the Woods Institute for the Environment at Stanford University. Philip received his Ph.D. in Environment and Resources from Stanford and his J.D. from Stanford Law School, where his research evaluated optimal environmental water rights marketing in the Upper Colorado River Basin, barriers to water marketing in the state of Colorado, and Native American groundwater claims across the western United States. His work has been published in journals such as Science, Water Resources Research, and the Harvard Environmental Law Review. During graduate school, Philip worked for the Special Master in the U.S. Supreme Court interstate water dispute Montana v. Wyoming, The Nature Conservancy's Colorado River Program, and a water law firm. Before graduate school, he worked for the Environmental Law Institute in Washington, DC, where he analyzed the most established market for freshwater ecosystem services in the United States – wetland and stream compensatory mitigation under the Clean Water Act. Philip grew up in North Carolina, where he received his B.S. in Environmental Sciences from UNC-Chapel Hill, and he now lives in Seattle.
