Water banking in Colorado: an experiment in trouble?

Abstract

This presentation reports on the progress and problems of the Arkansas River Basin Water Bank Pilot Program in Colorado. The term "water banking" has been used to describe a variety of ways of trading use of water; the legislature's choice in Colorado was a non-profit brokerage mechanism trading only stored surface water. This experiment in modifying traditional prior appropriation law reduces transactions costs and delays in transfers of water. to increase flexibility for the benefit of the holders of agricultural water. Such flexibility is expected to become increasingly desirable in conditions of scarcity and shifts from structural to non-structural approaches to supply. The Colorado experiment is described. to try to explain how a great theory with substantial appeal in principle has been so far socially unacceptable (as of the time of paper submission). The goal is to alert irrigation people to another case of social management being critical to success. regardless of technical charms.