A strategic environmental water rights market for Colorado River reallocation

Philip Womble (), Steven M. Gorelick, Barton H. Thompson and J. Sebastian Hernandez-Suarez
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Philip Womble: Stanford University
Steven M. Gorelick: Stanford University
Barton H. Thompson: Stanford University
J. Sebastian Hernandez-Suarez: Stanford University

Nature Sustainability, 2025, vol. 8, issue 8, 925-935

Abstract: Abstract The Colorado River system is among the world’s most overallocated basins, struggling to supply water to the southwestern United States and Mexico. Consequently, 90% of the basin’s native fish species are endangered, threatened or extinct. Driven by a 24-year megadrought, the United States allocated over US$4 billion for drought mitigation, including water market transactions that pay farms, cities and industries to divert less water across the US Southwest. We developed a model of how strategic water markets can restore imperilled fish habitat, integrating hydrology, ecology, economics and water rights within the river’s headwater state of Colorado. While least-cost water-use reductions improve over one-third of restorable river habitat, strategically spending 8% more nearly triples habitat improvement. Ten transactions attain 26% of that improvement for 1% of the cost. Water markets that do not legally protect conserved water are 29% less cost-effective than markets that do. Overall, strategic investing and legal reforms yield outsized ecological benefits.

Date: 2025
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DOI: 10.1038/s41893-025-01585-x

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