A new study led by researchers at the University of North Carolina at Chapel Hill offers a solution to water scarcity during droughts amid the tug of economic development, population growth and climate uncertainty for water users in Western U.S. states.
A new study led by researchers at the University of North Carolina at Chapel Hill offers a solution to water scarcity during droughts amid the tug of economic development, population growth and climate uncertainty for water users in Western U.S. states. The proposed two-way leasing contracts would coordinate agricultural-to-urban leasing during periods of drought and urban-to-agricultural leasing during wet periods, benefiting both urban and agricultural water users.
“Water markets are an important tool for allocating water in the Western U.S., and other water-scarce regions around the world, but they are often slow to respond to drought, preventing re-allocation that can substantially reduce financial impacts,” says Greg Characklis, W.R. Kenan Distinguished Professor of environmental sciences and engineering at the UNC Gillings School of Global Public Health and director of UNC’s newly established Institute for Risk Management and Insurance Innovation (IRMII).
The study, recently published in Earth’s Future, considers the hydrologic, engineered and institutional systems that govern water along the fast-growing Front Range communities in Colorado, testing a two-way option contract for water users that can quickly respond to wet or dry conditions. These contracts are signed in advance of a drought and can provide both cost savings and high water supply reliability for cities, which can use them to quickly acquire water from irrigators during dry periods. This arrangement allows cities to forego developing large and expensive supplies that are rarely used. Agricultural users benefit from annual option payments from urban users, and higher fees in dry years when the water is transferred. In normal and wet years, these two-way option contracts result in excess urban supplies being transferred to irrigators who then benefit from higher levels of agricultural productivity in these years.
Read more at: The University of North Carolina at Chapel Hill
