State Government and NonProfit Activities for Instream Flows:

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State Government and Non-Profit Activities for
Instream Flows Substitutes or Complements? Edn
a T. Loehman Water and Environmental
Economics Purdue University Sasha Charney Water
Planner Boulder County Parks
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Road Map

• Concepts
• Survey of state governments and NPOs
• Conclusions
• Conclusions

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Fundamental Concepts

• Instream flow is a public good - provides
  recreation and ecosystem benefits to all people
• State govt. and NPO activities are inputs for
  producing ISF
• Substitutes To increase ISF would/should state
  govt. activities decrease and NPO activities
  increase?
• Complements To increase ISF would/should both
  state govt. and NPO activities increase?
• Answer depends on relative costs and
  relative productiveness of activities!

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Economists are often negative about People and
Governments/Bureaucracies

• Free riding problems for voluntary provision of
  public goods implies a need for government
  finance
• Bureaucracy maximizes budget ? inefficiency.
• Government and NPOs are substitutes in terms of
  citizen contributions
• Government may crowd out actions by NPOs (also
  crowd in)

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Why market-based methods?

• 1. Provide positive incentives
• for conserving water
• 2. Reduce cost of providing ISF compared to
  regulation
• 3. Provide a measure of ISF water value
• Integrate willingness to accept with willingness
  to pay for ISF

Market-based methods for ISF purchase and lease
of water rights.
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New thinking (Institutional Economics) Not
bureaucracy versus markets!

• Market methods are tools to achieve social
  goals
• Government is needed to
• create markets
• For environmental goods,
• government sets limits
• that give incentives for
• trading
• Government can itself use
• market tools and participate in markets

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Survey Comparison of State Govt. NPO
Activities

• Activities can be performed by state and/or NPO
• Are there concentrations or comparative
  advantages in some of these activities?
• What are the levels of resources/funding sources
  devoted to ISF?
• How do state government and NPOs interact?

Activities
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Survey of Govt. and NPOs in six states
State Government Arizona Game and Fish
Department Colorado Water Conservation
Board Idaho Department of Water Resources Montana
Fish Wildlife and Parks Oregon Water Resources
Department Washington Department of Fish and
Wildlife Non-Profit Organizations The Nature
Conservancy, Arizona Friends of Arizona
Rivers Trout Unlimited, Idaho Water
Project Colorado Water Trust Montana Water
Trust Oregon Water Trust Washington Water Trust
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Survey Results

• Range of dedicated FTEs
• State governments 4 to 14 employees
• Water trusts 1 to 5 employees
• Both states and water trusts involved in
  identifying lease or purchase opportunities
• Most state govts. not directly involved in water
  rights purchase
• Most water trusts specialize in making
• water deals

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Survey Results cont.

• Both states and water trusts identify priority
  streams (mostly via models)
• More govts. than trusts involved in improving
  water efficiency (work with EQIP)
• No trusts involved in improving storage of water
• Trusts less involved than states in drought
  planning, education, research and data collection

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Important Funding Sources

• State govts. have dedicated line items ? steady
  funding
• Some state govts. fund ISF from leases, licenses,
  recreation funds, etc.
• Both govts. and trusts in Pacific Northwest
  receive federal grants and funding from
  electricity generation
• Trusts/NPOs are funded by federal grants, private
  foundations, donations

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Nature of State-NPO Interactions Need for more
coordination?

• Most interaction in the form of information
  exchange
• Only some states have regular meetings between
  government and trusts/NPOs
• Some interaction in identifying priority areas,
• monitoring stream conditions, and
  education
• Some interaction on project planning
• few cooperative projects

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Major Problems

• FUNDING! (All NPOs)
• Almost all NPOs list state policy changes as a
  major need
• Both state govts. and NPOs indicate lacks in
  legal foundations and citizen support
• Owners are reluctant to sell water rights

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Variety in state programs Social Experiments

• Arizona One of the first to recognize ISF as a
  beneficial use.
• Private holding of ISF rights
  allowed (eg. TNC).
• Colorado Representative Governing Board works
  with CWCB
• Idaho Water banking for ISF
• Montana MWT emphasizes leasing for ISF
• State reservation system for
  new appropriations
• Emergency Streamflows limit
  diversions to maintain 25 of AAF
• Oregon State sets minimum streamflows
• Conservation activities benefit ISF
• Washington Water rights tracking system and
  database
• MT, OR, WA split season leases to provide water
  at the right time
• CO, MT, OR, WA Collaborative process for ISF

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Conclusions State Govt. and NPO activities are
COMPLEMENTS

• Funding has a big effect on activities.
• State govts. and NPOs differ in funding
  sources/ reliability and funding levels.
• State govts. have comparative advantage in
  storage, monitoring, enforcement, research/data,
  drought planning. These require ongoing funding
  authority.
• Trusts/NPOs have advantage in negotiation and
  market activities.
• Building public support requires education.
• Why are NPOs not doing more education?

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QUESTIONS??