Wednesday, July 22, 2009

Property Rights and the Ogallala Acquifer

The Chronicle reports that the Ogallala aquifer, which supplies water to Kansas, Colorado, Nebraska, New Mexico, Oklahoma, South Dakota, Texas and Wyoming, could be in jeopardy. According to a report issued by the U.S. Geological Survey:

Future water supplies from the High Plains aquifer could be in jeopardy if large amounts of water are pumped out of it and if farmers continue using chemicals on land above the vast underground reservoir...

Interestingly, the report found no evidence that the aquifer is actually being contaminated by agricultural chemicals. Of the 370 wells tested, about 6 percent contained levels of nitrates that exceeded federal clean water standards. Nitrates are a byproduct of fertilizers, but they also occur naturally.

The implication of the report is that more government controls will be necessary to protect the sustainability of the aquifer. Indeed, the report states:

The rigorous scientific approach of the USGS NAWQA Program and the resulting
improved understanding of groundwater quality in the High Plains aquifer will be
invaluable for local and statewide management toward sustainable groundwater
resources of this important aquifer system.

The most likely form of those controls will be restrictions on fertilizers, pesticides, and pumping of water from the aquifer. Controls and regulations in any of these areas could have significant, and destructive, consequences. For example, controls on the application and use of fertilizers and pesticides would likely result in decreased food production. Limits on pumping for irrigation would have similar consequences.

Concerns regarding the long-term sustainability of the aquifer are a direct result of "public ownership". The inevitable result of such "ownership" is the "tragedy of the commons". When a resource is not owned by anyone in particular, it is overused and ill-maintained. The lack of ownership provides each user with an incentive to focus on the short-term and maximize his immediate benefits. And because he does not own the resource, he cannot take the actions necessary to protect and improve its long-term value.

The solution is not more government controls, regulations, and restrictions. The solution is to identify and protect property rights in the aquifer. One of the primary functions of government is the protection of property rights, and its continued default on this responsibility threatens the welfare of every American. Certainly, identifying and protecting property rights in a resource as vast as the Ogallala aquifer would be a complex undertaking. But the complexity of the task is not justification for continued "public ownership" of that resource. Indeed, there are existing laws in regard to water rights that provide an indication of how property rights can be identified.

In the American west, where water is relatively scarce, a doctrine known as "prior appropriation water rights" was developed. According to Wikipedia:
The legal details vary from state to state; however, the general principle is that water rights are unconnected to land ownership, and can be sold or mortgaged like other property. The first person to use a quantity of water from a water source for a beneficial use has the right to continue to use that quantity of water for that purpose. Subsequent users can use the remaining water for their own beneficial purposes provided that they do not impinge on the rights of previous users.

"Prior appropriation water rights" essentially means "first come, first served". Those who first make use of a resource or give it value are the rightful owners, and subsequent users cannot take any action that threatens the ability of the first owner to use his property.

In practice, "prior appropriation water rights" give the owner the right to a certain quantity of water and the first user has the first claim to his water. He cannot use more than his "share", as this could interfere with the rights of subsequent owners to their "share".

Protecting property rights gives the owners a powerful incentive to protect their asset. If they damage it--through excessive use or pollution--they damage the value of their asset. And, if they damage the property owned by others they are subject to litigation.

Certainly, pollution is a long-term issue, as it can take decades for contaminated surface water to reach the aquifer. Further, because of the manner in which water travels from the surface to the aquifer, it can be difficult to identify polluters. Again, such complexities are not justification for government to continue to violate the rights of individuals, nor does it justify further restrictions and controls.

The government has demonstrated that it is incompetent when it comes to managing virtually any resource. It has certainly demonstrated that in regard to water it cannot prevent pollution. In 2004 the Environmental Protection Agency released a report that found one-third of America's public lakes and nearly one-fourth of its rivers were polluted and unsafe for drinking, fishing, or recreation. Despite spending billions of dollars and enacting reams of regulations, the government has done little to keep our water clean and safe. The Ogallala aquifer will not be an exception.

No comments: