RESOURCES

FOR THE FUTURE

National Water Supply Issues

Testimony for presentation to the Subcommittee on Fisheries, Wildlife, and Water,

Environment and Public Works Committee

U.S. Senate, November 14, 2001

by Kenneth D. Frederick, Senior Fellow, Resources for the Future*

Thank you Chairman Graham, Ranking Member Crapo, and members of the subcommittee for the opportunity to testify on the nation's water supply issues. I am Kenneth Frederick, Senior Follow at Resources for the Future, a nonprofit, nonadvocacy research and educational organization specializing in problems of natural resources and the environment since 1952. The views I express today are my own, not those of RFF.

The United States is relatively well endowed with water, with an average annual precipitation of nearly 30 inches throughout the conterminous 48 states and large quantities of water stored in surface and groundwater reservoirs. Despite water's apparent abundance and renewability, water adequacy has emerged as one of the nation's primary resource issues. Freshwater is a scarce and often threatened resource throughout much of the United States, but particularly in the and West. Supplies are being depleted or degraded by unsustainable rates of groundwater use, contamination, and damage to aquatic ecosystems.

Concerns about the availability of freshwater to meet the demands of a growing and increasingly affluent population while sustaining a healthy natural environment are based on several factors: ( 1) the importance of reliable supplies of high‑quality water for human and environmental health and economic development; (2) uncertainties as to the availability of supplies stemming from the vicissitudes of the hydrologic cycle and the threat that greenhouse warming might alter the cycle; (3) the high costs of developing additional supplies; (4) the Vulnerability of the resource to contamination; and (5) the shortcomings of our institutions for allocating scare supplies in response to changing supply and demand conditions.

My remarks will focus on the implications of greenhouse warming and the institutional shortcomings, I will leave the committee with several papers that provide a more extensive discussion of these and other factors affecting the nation's water supplies.

Hydrologic implications of greenhouse warming

Greenhouse warming could affect the quantity, quality, timing, location, and reliability of water supplies, The effects on water supplies and water management systems are expected to be among the most important impacts of global warming. But understanding the linkages between emissions of greenhouse gases and sulfur dioxide (which has a cooling effect) and the climate, and then determining how climate change would affect water resources at geographic scales relevant for water planning and management arc daunting tasks. Contrasting projections of runoff (that is, our renewable supplies) based on the two principal general circulation models used in the recent national assessment of the impacts of climate variability and change on the United States illustrate the uncertainties. Estimates based on the Hadley climate model indicate flooding could increase in much of the country, while those based on the Canadian model indicate increased water scarcity would pervade much of the country.

While the wide range of projections from the different climate models makes it difficult to draw Conclusions at the river basin and watershed levels, some general conclusions about the likely impacts of greenhouse warming on water supplies do emerge.

0 Precipitation is likely to increase in higher latitudes, particularly in winter.

0 Higher evapotranspiration rates may lead to decreases in runoff, even in areas with increased precipitation.

* More intense precipitation days are likely in some regions, which could contribute to all increase in flood frequency.

0 The frequency and severity of droughts could increase in some areas as a result of a decrease in total rainfall, more frequent dry spells, and greater evapotranspiration.

0 Higher temperatures would shift the relative amounts of snow and rain along with the timing of runoff in mountainous areas. This shift could increase the likelihood of flooding early in the year and reduce the availability of water during periods of high demand.

• Higher temperatures and reduced flow could increase water quality problems in some basins.

• The quality and quantity of freshwater in coastal areas might be adversely affected by higher sea levels and increased storm surges that push saltwater further inland in rivers, deltas, and coastal aquifers.

Water institutions

There is cause for concern over the adequacy of our water supplies. We have limited control over the resource, most opportunities for increasing supplies are financially and environmentally costly, current uses are depleting or contaminating some valued supplies, and the prospect of climate change introduces new uncertainties. Meanwhile, demands for freshwater are growing with population and incomes. And many of the institutions that provide the opportunities and incentives to use, conserve, or protect the resource continue to be rooted in an era when the resource was not considered to be scarce.

On the other hand, there is reason for optimism as to the long‑terrn adequacy of water supplies. The institutions that influence how supplies are managed and allocated among competing users and the effectiveness and costs of efforts to protect aquatic environments and drinking water quality will determine the magnitude and nature of future water costs.

State institutions are primarily responsible for allocating waters within their borders. But water flows do not conform to state boundaries. As the competition for water increases, all users within a hydrologic unit become increasingly interdependent. Consequently, federal input is needed to promote water use efficiency and protect the interests of downstream states. The federal government currently manages much of the West's SUIT,= waters, Supplies water to about one quarter of irrigated lands there, and is the source and enforcer of environmental legislation affecting water use, the trustee for Indian water rights, and the holder of unquantified rights for water use on federal lands. Carrying out these responsibilities to better meet the nation's future water needs will be a major challenge. Some recommendations follow.

Water marketing, the voluntary transfer of water rights to new uses and users, has great potential to increase water‑use efficiency, The federal government has taken a few steps to facilitate water marketing. The Department of Interior adopted a policy of facilitating transfers involving federal facilities and established a framework for approving and administering interstate agreements for water transfers among the three Lower Colorado Basin states. The Central Valley Project Improvement Act of 1992 authorized the transfer of federally supplied water outside the project service area. However, these measures have had little or no impact on water use to date. A broader, more active federal role is needed.

Uncertainties surrounding unquantified Indian and federally reserved water rights hinder the assignment of transferable water rights. Providing the tribes with rights that could be sold off the reservations would foster water marketing as well as tribal welfare. Temporary and permanent transfers of federally supplied water could be promoted to facilitate transfers from low‑value, inefficient agricultural uses to domestic and industrial uses. Providing irrigators an opportunity to sell unused supplies would promote transfers from low‑ to high‑value uses and would provide irrigators incentives to conserve. With the introduction of transferable water rights, users would value water in terms of its opportunity cost ‑ the value they could get by selling water ‑ rather than the subsidized price they pay for it.

The prospect of global climate change provides added reason for promoting water transfers and making the operation of federal dams and reservoirs more responsive to changing conditions. The magnitude, timing, and even the direction of climate‑induced changes in a region's water supplies are uncertain. The costs of building dams, reservoirs, and other infrastructure in anticipation of these uncertain changes are high. But reexamining operating rules, relaxing constraints on water use, and developing institutions to encourage voluntary exchanges of water through markets would make the system more efficient and better able to adapt to whatever the future might bring.

The United States has made impressive gains over the last two decades in restoring and protecting its water resources. But resistance is growing to the enormous investments that continue to be made in treating industrial and municipal wastes because of high costs and diminishing returns. More cost‑effective approaches to water‑quality goals are needed. These might include effluent fees that provide incentives to develop and adopt least‑cost technologies, and tradable pen‑nits to pollute that establish an allowable quantity of pollution in a watershed and provide incentives to achieve this level at the lowest cost. Nonpoint Source pollutants ‑ such as runoff from farms, urban areas, and construction sites, and seepage from landfills and septic systems ‑ are now the principal sources of pollutants reaching the nation's waters. Since these pollutants lack specific points of discharge where they can be collected and treated, watershed management with particular emphasis on the use of riparian or riverside lands must be employed to achieve significant Further improvements in the quality of the nation's waters.

The interdependencies among water users and the interchangeability of ground and Surface Supplies are all too often ignored in management decisions because natural hydrologic regions are split into multiple political and administrative units. Integrated management of existing supplies and infrastructure, ideally at the river basin level but also within smaller watersheds, could be a cost‑effective means of increasing reliable water supplies and resolving water conflicts in many regions. Perhaps the most important measure that Congress could take to meet the nation's long‑term water needs would be to restore the Water Resources Council or a similar institution. Such an institution is needed to evaluate water investment and management decisions objectively from the perspective of their impacts on larger watersheds, to assess the third‑party impacts of interstate water transfers, to counter the often conflicting objectives of differing federal agencies, and to reduce (or at least expose) the inefficiencies that result from political logrolling and agency aggrandizement.

Thank you for your attention. I would be pleased to address any questions the committee might have.