27 May 2011

Public trust vs markets

I agree with California's Republicans (holy cow!) on this:
In 1989, Professor Sax declared, "The new era is one of reallocation. The direction is changing from agricultural to urban uses and in-stream flows for water quality, recreation, and ecosystem protection... No private property claims are going to halt this transformation." Contrary to that claim, water rights do not necessarily stand in the way of redistributing water resources, and in fact can facilitate it. A strong water rights system encourages those with rights to sell or transfer them to more valuable uses, as determined by a negotiated price.

On the other hand, an expanded public trust doctrine promises a different sort of water future for California, where allocations are centralized under the control of government planners. Private rights that can be subsumed by so-called public rights, which themselves are subject to constant redefinition, are effectively non-existent. Without certainty in their water rights, users have little or no incentive to invest in infrastructure or seek exchanges to maximize the value of their rights. No recipient will agree to a water transfer if the right to transferred water is subject to government takeover.
Gentlemen, I am available for consultation (first hour free!) on water markets and all-in-auctions.

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