Water Trading, Transaction Costs and Transboundary Governance in the Western US and Australia
Chapter 3: Unlocking the past: path dependency and intertemporal costs
[H]ere is the mighty river and its tributaries, as yet largely undeveloped, affording possibilities of extensive use for water power in its many canyons and for irrigation in its desert valleys, which need only the life-giving water to make them productive and valuable . . . These rivers make possible not only the construction of large irrigation systems and the growth of towns, cities, and prosperous agricultural communities but also the generation of hydroelectric power for lighting, heating, industrial uses, and the transportation of freight and passengers. (Grover, in La Rue, 1916: 9–10). For nearly a century, the water of the Colorado has been at the center of an intense political, legal, and economic tug-of-war between agricultural, municipal, industrial, tribal, environmental, state, and federal interests . . . every drop of the Colorado River is carefully planned and controlled, taking on new obligations and owners at each of its thousands of headgates, dams, and diversions. By the time it crosses the border, the mighty Colorado is exhausted to little more than a large stream – a stream that in most years disappears long before it reaches its terminus, diverted for irrigation in Mexico. [Shortly after long-range supply and demand intersected for the first time in the Colorado River]. (Culp, 2001: 1)
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