Saving Our Streams:

Harnessing Water Markets

August 2007

By Brandon Scarborough and Hertha Lund

Bound copies of the report are available at
PERC for $10 - email [email protected].

A Summary

Declining stream flows throughout the West are threatening critical fish and other wildlife populations, recreational opportunities, and the health and aesthetic beauty of riparian ecosystems. As populations continue to grow, so too does the need to remove water from streams to meet urban needs. The dilemma is how to protect instream flows and still meet growing demand for out-of-stream uses that are helping to enrich local economies.

The solution: water markets. Federal and state agencies and conservation groups dedicated to restoring stream flows are increasingly turning to markets to connect willing buyers and sellers of water rights. Throughout much of the West, water rights are tradable and can be bought, leased, or donated for environmental purposes.

This handbook is a guide for policymakers, environmentalists, farmers and ranchers, agency officials, and others who are passionate about restoring instream flows through voluntary markets. Between 1998 and 2005, markets have grown significantly in many western states; while in others, political, legal and even social barriers have inhibited their development. This booklet details the following:


 • A comprehensive look at the state of water markets
• The legal foundation of water rights and laws that influence markets
• State–by–state survey of legislation and market activity
• Advice for willing buyers and sellers
• Market participants and fair market values for instream flows



Brandon Scarborough is a research fellow at PERC in Bozeman, Montana, with a background in biology and markets for environmental quality.

Hertha L. Lund practices law at the Wittich Law Firm in Bozeman, Montana, where she represents landowners and water rights holders in transactions and litigation. Lund has been involved in numerous water policy and litigation issues in the state of Washington and in other western states.


As a research fellow at PERC, Brandon Scarborough focused on the use of water markets in the West to restore stream flows for wildlife, fish, and other environmental amenities. He also researched carbon sequestration and the efficacy of using forest management to address climate change. His other interests include the interactions between natural...
Read More > More Articles by Brandon Scarborough >