When the seven states of the Colorado River Basin first divided water rights in the 1920s, they handed out more than the river could reliably deliver, especially during periods of drought. Today, the basin supplies drinking water to 40 million people and irrigates 5 million acres of farmland across the southwestern United States, 30 tribal nations, and parts of Mexico.����

Climate change has exacerbated shortages, with studies indicating that recent Colorado River flows are near their lowest in at least 2,000 years. That has had severe consequences for fish: Of the 49 fish species native to the Colorado River Basin, 44 are already threatened, endangered or extinct.����

Standing agreements governing Colorado River management among states and between the U.S. and Mexico are set to expire after 2026. New research led by 91̽�� water policy expert found that a market-based approach to managing water could provide more reliable supplies for farmers, communities and industry. The right market design and a little extra investment could also help threatened fish species.

The study, , details a new system for leasing rights to water from the basin while reallocating some water to imperiled habitats. Among the paper’s most substantial findings, researchers estimate that strategically spending 8% more than under the cheapest water conservation program could nearly triple the ecological benefits.����

“There’s already a lot of money spent on water conservation agreements. Spending a little bit more money, especially in headwaters, could have outsized ecological impact,” said Womble, who started this research as a graduate student and postdoctoral fellow at Stanford University and is now a 91̽��assistant professor in the Evans School of Public Policy & Governance.��

Rights to the river’s water have been divided by a complex and contentious set of agreements. Under the , states in the river’s Upper Basin (Colorado, New Mexico, Utah and Wyoming) agreed that they would not cause the river’s flow towards the Lower Basin (Arizona, California and Nevada) – just below the nation’s second-largest reservoir, Lake Powell – to be depleted below a 10-year rolling average of 7.5 million acre-feet per year.����

As the climate crisis intensifies and a historic megadrought has lowered the amount of water in the river, a legal debate has erupted over how much water the Upper Basin states can use and how much they must leave to the Lower Basin states. The possibility of litigation before the U.S. Supreme Court looms.����

In an effort to avoid the risk of sudden cutbacks, water users in the Lower Basin states have created systems for voluntary water market transactions. Some Upper Basin states, meanwhile, have explored a water market designed to reduce water consumption and keep water flowing to Lake Powell. But existing programs generally do not prioritize water for critical fish habitats.��

To quantify the cost of strategically improving fish habitat, researchers developed a model to simulate transactions and ecological impacts in Colorado’s headwaters, which contribute nearly a quarter of the river’s natural average annual flow into Lake Powell.��

In the proposed market model, water sellers — including farmers, irrigation organizations, and cities — would lease senior water rights to governments and non-governmental environmental organizations to protect threatened fish habitat. Those senior water rights are critical for environmental protection because they are fully allocated before newer, junior water rights receive any water.��

“One key characteristic of water law across the western U.S. is our ‘use it or lose it’ principle,” Womble said. “That can be a disincentive to water conservation.”��

The team evaluated six scenarios to understand potential outcomes in a future drought year. They compared a “protected” market — where newer water users are legally barred from diverting restored flows — to an unprotected market with no legal flow protections.��

Simulations showed that without reductions in water consumption, fish populations could face dire conditions for at least one month of the irrigation season along nearly the full length of the river. In contrast strategic transactions that reduce water use would benefit more than 380 miles of restorable river reaches. This includes hundreds of the most ecologically significant miles, which could see at least partial restoration of fish habitats.����

“Instead of only reducing water consumption, strategic environmental water transactions would simultaneously reduce water consumption and preserve fish habitat at the lowest cost to the buyer,” the authors write.��

Additional modeling results suggest that moderate cuts to water use could be achieved with $29 million spent in a protected market. Aggressive reductions might cost approximately $120 million. Comparable reductions would cost about 12% more in an unprotected market.��

The model indicates the most stringent market design — with aggressive water-use reductions and legal protections for conserved water — is 29% more cost effective than a less formal option.��

“By strategically directing river water to the right places, even under drought conditions, fish can be saved with targeted restoration at nominal additional cost,” said , a Stanford professor of Earth system science who is a senior author on the study.����

Other authors include , a Stanford professor of natural resources law and of environmental social sciences, and J. Sebastian Hernandez-Suarez, who participated as a postdoctoral scholar at Stanford.����

Gorelick and Thompson are also senior fellows in the Stanford Woods Institute for the Environment. Gorelick directs the Global Freshwater Initiative and Thompson is faculty director of the Water in the West program.��

This research was funded by the , Walton Family Foundation, the Stanford Doerr School of Sustainability’s Emmett Interdisciplinary Program in Environment and Resources (E-IPER), a Stanford Interdisciplinary Graduate Fellowship, Ishiyama Family Foundation, Babbitt Center for Land and Water Policy, Robert and Patricia Switzer Foundation, a Landreth Family Grant, and a McGee/Levorsen grant from the Stanford School of Earth, Energy & Environmental Sciences.��

Adapted from a .����

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In the past five years, scientific studies estimated declines of future flows ranging from 6 percent to 45 percent by 2050. A paper by 91̽�� researchers and co-authors at eight institutions across the West aims to explain this wide range, and provide policymakers and the public with a framework for comparison. The is published this week in the .

“The different estimates have led to a lot of frustration,” said lead author , who recently earned a 91̽��doctorate in civil and environmental engineering. “This paper puts all the studies in a single framework and identifies how they are connected.”

Besides analyzing the uncertainty, the authors establish what is known about the river’s future. Warmer temperatures will lead to more evaporation and thus less flow. Changes to precipitation are less certain, since the headwaters are at the northern edge of a band of projected drying, but climate change will likely decrease the rain and snow that drains into the Colorado basin.

It also turns out that the early 20^th century, which is the basis for water allocation in the basin, was a period of unusually high flow. The tree ring record suggests that the Colorado has experienced severe droughts in the past and will do so again, even without any human-caused climate change.

“The Colorado River is kind of ground zero for drying in the southwestern U.S.,” said co-author , a 91̽��professor of civil and environmental engineering. “We hope this paper sheds some light on how to interpret results from the new generation of climate models, and why there’s an expectation that there will be a range of values, even when analyzing output from the same models.”

The authors include leaders in Western water issues, ranging from specialists in atmospheric sciences to hydrology to paleoclimate. Other co-authors are at the University of Colorado in Boulder; , Tapash Das and Hugo Hidalgo at the University of California, San Diego; , Holly Hartmann and Kiyomi Morino at the University of Arizona in Tucson; Levi Brekke at the federal Bureau of Reclamation; at the U.S. Geological Survey in Denver; and Martin Hoerling at the National Oceanographic and Atmospheric Administration in Boulder; and Kevin Werner at the National Weather Service in Salt Lake City.

The authors compared the array of flow projections for the Colorado River and came up with four main reasons for the differences. In decreasing order of importance, predictions of future flows vary because of:

• Which climate models and future emissions scenarios were used to generate the estimates.
• The models’ spatial resolution, which is important for capturing topography and its effect on the distribution of snow in the Colorado River’s mountainous headwaters.
• Representation of land surface hydrology, which determines how precipitation and temperature changes will affect the land’s ability to absorb, evaporate or transport water.
• Methods used to downscale from the roughly 200-kilometer resolution used by global climate models to the 10- to 20-kilometer resolution used by regional hydrology models.

While the paper does not determine a new estimate for future flows, it provides context for evaluating the current numbers. The 6 percent reduction estimate, for example, did not include some of the fourth-generation climate model runs that tend to predict a dryer West. And the 45 percent decrease estimate relied on models with a coarse spatial resolution that could not capture the effects of topography in the headwater regions. The analysis thus supports more moderate estimates of changes in future flows.

“Drought and climate change are a one-two punch for our water supply,” said Overpeck, a professor of geosciences and of atmospheric sciences at the University of Arizona.

The new paper is intended to be used by scientists, policymakers and stakeholders to judge future estimates.

“I hope people will be able to look at this paper and say, ‘OK, here’s the context in which this new study is claiming these new results,'” Vano said.

The research was funded by NOAA through its and its National Integrated Drought Information System.

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For more information: Vano: 206-794-7946 or jvano@uw.edu; Lettenmaier: 206-543-2532 or dennisl@uw.edu; Overpeck: jto@email.arizona.edu; Udall: 303-492-1288 or bradley.udall@colorado.edu