I include an extended excerpt here because I am fascinated by the authors' attempts to justify taking water from farmers for use in the environment. Pay particular attention to the words I put in bold:
The issue here is familiar to water lawyers. For decades, water users have tried to turn their inherently insecure rights to use water into secure, exclusive property rights like those of landowners. Courts and academics have long reminded them that water is different. Ownership simply doesn't fit the reality of water use. To control access and use, the western states "own" the water in trust for the public. Individuals such as the Klamath water users can obtain the right to use water, but never classic ownership of it.Although I agree that lawsuits are the most-costly way to reconcile competing interests (ag vs. environment), I think that environmentalists are far too quick to claim that "changed societal goals" and "legitimate regulatory initiatives" are good enough reasons to "displace the status quo" -- usually without fair (or market) compensation.
This latest litigation twist illustrates just how complex, time-consuming, and expensive it can be to resolve these sorts of property claims, and how such claims can stand in the way of ecosystem restoration efforts. There are good reasons for guaranteeing compensation to those deprived unexpectedly of their property rights by government action. Stable property rights encourage investment, both economic and emotional, in the development of land and water resources. But at the same time, too much deference to property rights enhances the tyranny of the status quo, inhibiting the necessary evolution of rules in response to changed circumstances and changed societal goals. Ultimately, most takings plaintiffs lose on their claims that they must be compensated for the costs imposed on them by new environmental regulations, but they can often force the government into protracted, expensive litigation. The mere threat of takings litigation can chill legitimate regulatory initiatives, especially in a time of ever-shrinking government budgets.
In the end, the Oregon court's decision will not help the irrigators. Whatever word is used to describe their entitlements, the takings issue boils down to whether they were treated so unfairly as to trigger an obligation to compensate. The insistence of Klamath project irrigators that they must be paid for any change to the status quo seems particularly unjustified. Millions of dollars have been poured into the Basin since 2001, much of it going to farmers. Some water has been reallocated to environmental purposes, but only through water banks that have paid farmers for giving up their water. A recent negotiated deal on hydropower dam re-licensing on the Klamath River manages to be highly favorable to the irrigators while still calling for environmental improvement through dam removal. None of that seems to be enough, however. The irrigators continue to pursue what they see as their "rights" to their full limit. That choice is good only for lawyers, not for the environment, not for the Basin's Indian tribes, who have long been denied their much longer established rights, and not for the public fisc [sic].
In the end, it won't even be much help to the irrigators themselves. They are unlikely to ultimately win their case. Even if they do, the courts cannot save them from the real threats to farming in the area, global economic and climatic change.
By definition, ecosystem restoration must displace the status quo to some extent. Sometimes, the losers may deserve some help in dealing with transitions. But takings litigation is too crude a tool for calibrating that help. It tells us little about the extent of the pain caused by change, the extent to which that pain is properly charged to the government or (as is clearly the case in the Klamath) has other causes, or about the appropriate way to distribute its costs.
That's why I advocate strong property rights and markets as the "cheapest" [lowest social cost] way to change water allocations. In fact, I designed all-in-auctions as a means of encouraging reallocation without resorting to taking water from those who own it. (I am working with farmers and enviros to implement AiA in Scott Valley, but I want to try them elsewhere. If you're interested, email me.)
BTW, I want to remind readers that those in favor of "restoring" Hetch Hetchy are guilty of wanting to use OPM (other people's money) to fulfill the wishes of the few.
Bottom Line: Environmentalists who wave their hands about "real threats" are failing to take responsibility for their own interests and goals. If they want to change the reallocation of water ("for the greater good"), then they should go get funding from the beneficiaries of this greater good (the taxpayers) and buy the water [rights] from those who own them. After all, "Stable property rights encourage investment, both economic and emotional, in the development of land and water resources."