Can Negotiated Agreements Facilitate Market Transfers of Water?

Lessons from New Mexico

Discussion Draft for Workshop
“Water Markets: Why Not More?”

Property and Environment Research Center
Bozeman, Montana
September 2009


By Elizabeth H. Richards
Energy, Resources, and Systems Analysis Center
Sandia National Laboratories
Albuquerque, New Mexico

Recently four large and complex water rights settlement agreements were negotiated in New Mexico. Although targeted primarily to resolving entrenched conflicts associated with the adjudication of water rights and addressing pressing over-allocation problems, the agreements contain a number of provisions to facilitate market transfers of water, especially leasing. In addition to clarifying property rights, the settlements provide mechanisms for expediting short-term leases and allow Indian water to be leased off Indian land. The agreements also address some of the concerns associated with opposition to water marketing by providing protections to certain groups of stakeholders and allowing them to participate in the rule-making process. The settlements demonstrate that negotiated agreements among local parties can make adjustments to existing governance institutions in order to facilitate market transfers of water.

Acknowledgements This paper contains material from the author’s Ph.D. dissertation. The author acknowledges the contributions of her advising committee: Len Ortolano, Jim Sweeney, Buzz Thompson, and Suki Hoagland, all of Stanford University.

Author Contact Information:
Elizabeth H. Richards, Ph.D.
Sandia National Laboratories
P.O. Box 5800
Albuquerque, NM 87185-1137
Elizabeth Richards