{"title":"Texas water markets: Understanding their trends, drivers, and future potential","authors":"Charles Wight , Kyle Garmany , Eugenio Arima , Dustin Garrick","doi":"10.1016/j.ecolecon.2024.108259","DOIUrl":null,"url":null,"abstract":"<div><p>Water scarcity and competition between water users in Texas have been driven by shifting demands and variable supplies for decades. Despite water scarcity in many parts of the state, the academic literature focuses primarily on the Rio Grande and Edwards Aquifer markets. With urban water demand projected to outpace agriculture for the first time by 2060, this article examines surface water market activity across Texas to better understand where transactions have occurred, the scale of transactions, and the factors driving transactions. We construct an original transactions database of over 2350 individual surface water transactions between 1987 and 2022, spanning 13 major basins and reallocating over 4 million acre-feet (AF) (4.9 billion m3) of water at a total price of $1.3 billion USD. We test the statistical relationships between different types of variables, such as biophysical factors (e.g., drought, precipitation) economic and social factors (e.g., commodity prices, population growth), with water market activity. Results demonstrate that transactional activity has increased over the past decade, and it has also spread across diverse contexts. We illustrate how different basins have different “signatures” of transactions, namely different mixes of drivers and patterns of trade, which have implications for policy. We find that groundwater levels, temperature, and commodity prices for rice and cotton are significant predictors of water transactions. By examining the diverse water market activity in Texas, this study shows how past investments in water market institutions have enabled the establishment of markets tailored to basin characteristics, while also emphasizing the need for institutions and governance arrangements that fit well with local conditions.</p></div>","PeriodicalId":51021,"journal":{"name":"Ecological Economics","volume":null,"pages":null},"PeriodicalIF":6.6000,"publicationDate":"2024-06-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Ecological Economics","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S0921800924001563","RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"ECOLOGY","Score":null,"Total":0}
引用次数: 0
Abstract
Water scarcity and competition between water users in Texas have been driven by shifting demands and variable supplies for decades. Despite water scarcity in many parts of the state, the academic literature focuses primarily on the Rio Grande and Edwards Aquifer markets. With urban water demand projected to outpace agriculture for the first time by 2060, this article examines surface water market activity across Texas to better understand where transactions have occurred, the scale of transactions, and the factors driving transactions. We construct an original transactions database of over 2350 individual surface water transactions between 1987 and 2022, spanning 13 major basins and reallocating over 4 million acre-feet (AF) (4.9 billion m3) of water at a total price of $1.3 billion USD. We test the statistical relationships between different types of variables, such as biophysical factors (e.g., drought, precipitation) economic and social factors (e.g., commodity prices, population growth), with water market activity. Results demonstrate that transactional activity has increased over the past decade, and it has also spread across diverse contexts. We illustrate how different basins have different “signatures” of transactions, namely different mixes of drivers and patterns of trade, which have implications for policy. We find that groundwater levels, temperature, and commodity prices for rice and cotton are significant predictors of water transactions. By examining the diverse water market activity in Texas, this study shows how past investments in water market institutions have enabled the establishment of markets tailored to basin characteristics, while also emphasizing the need for institutions and governance arrangements that fit well with local conditions.
期刊介绍:
Ecological Economics is concerned with extending and integrating the understanding of the interfaces and interplay between "nature''s household" (ecosystems) and "humanity''s household" (the economy). Ecological economics is an interdisciplinary field defined by a set of concrete problems or challenges related to governing economic activity in a way that promotes human well-being, sustainability, and justice. The journal thus emphasizes critical work that draws on and integrates elements of ecological science, economics, and the analysis of values, behaviors, cultural practices, institutional structures, and societal dynamics. The journal is transdisciplinary in spirit and methodologically open, drawing on the insights offered by a variety of intellectual traditions, and appealing to a diverse readership.
Specific research areas covered include: valuation of natural resources, sustainable agriculture and development, ecologically integrated technology, integrated ecologic-economic modelling at scales from local to regional to global, implications of thermodynamics for economics and ecology, renewable resource management and conservation, critical assessments of the basic assumptions underlying current economic and ecological paradigms and the implications of alternative assumptions, economic and ecological consequences of genetically engineered organisms, and gene pool inventory and management, alternative principles for valuing natural wealth, integrating natural resources and environmental services into national income and wealth accounts, methods of implementing efficient environmental policies, case studies of economic-ecologic conflict or harmony, etc. New issues in this area are rapidly emerging and will find a ready forum in Ecological Economics.