What is Demand Management?
An incentive-based framework for Upper Basin conservation was proposed in 2019- is it enough to address the longest running drought in US history?
Just south of Crested Butte, Colorado, a homemade sign reads "please conserve water!"
The Colorado River spans nearly 1,450 miles from its headwaters in the Rocky Mountains, with a drainage basin of approximately 246,000 square miles through seven US states and Mexico. The river irrigates 5.5 million acres of agricultural land, and provides water for nearly 40 million people. The management of this resource is complicated by the tug-and-pull of agricultural and municipal stakeholders, climate change, and prior legislation that has failed to adequately account for the widespread growth of the American Southwest.
The broad legislative landscape of Colorado River resource management is known as the Law of the River, and includes “numerous compacts, federal laws, court decisions and decrees, contracts, and regulatory guidelines” dating back to its cornerstone document, the 1922 Colorado River Compact. This compact defined the two major territories of the Colorado River Basin; the Upper Basin states (Colorado, Utah, Wyoming, New Mexico), and the Lower Basin states (California, Arizona, and Nevada). Once defined, these divisions were responsible for managing the distribution of water resources to their respective states and other downriver stakeholders. This would be the first step in defining an ideal, equitable distribution of water resources along the Colorado River, and paved the way for the mass irrigation of the region.
Over the century that followed the 1922 compact, the growth of the region has increased demand on the already-stressed supply of the Colorado River. Above-average temperature increases, soil aridification, and “climate change-driven megadrought” compound the squeeze. Agricultural stakeholders, municipal developers, supply chain inputs, and individual stakeholders are all affected by, and compete for this increasingly scarce resource.
In 2019, the interstate Drought Contingency Plan was drafted to address drought conditions and increased scarcity along the Colorado River Basin. The plan aims to maintain critical reservoir elevations on which agricultural and municipal users depend, and ultimately seeks to avoid the mandatory curtailment of Upper Basin water resources by ensuring compliance with the 1922 Colorado River Compact.
View of Glen Canyon Dam facing north towards Lake Powell near Page, AZ.
The plan outlines a number of potential approaches to mitigate this worsening crisis, including demand management, a framework that would incentivize upstream water users to pause or reduce their consumptive water use. Users in the Upper Basin of the Colorado River (such as landowners, municipalities, and agricultural users) may choose to temporarily pause their water use, and be financially compensated for it. Outlined in the Demand Management Storage Agreement, the purpose is not to provide surplus water to Lower Basin States directly, but rather, to help Upper Basin states meet their obligations to the 1922 Colorado River Compact. As it pertains to the supply of the Colorado River, demand management is just one of many tools currently being considered to mitigate drought along the Colorado River Basin.
To date, there are no official plans to use this framework, and if considered, all Upper Basin States must sign off on the program’s key elements. The Upper Colorado River Commission and the Secretary of the Interior must also approve of the measure, and the approval of Lower Basin states is also a factor. If put into practice, the true impact of demand management on the supply of the Colorado River depends on how effectively the framework encourages eligible water users to be paid to pause their consumption. If upstream users don’t see the benefit to voluntarily reducing their water use, the plan may prove to be less effective than other, more broad regulatory action.
This framework has the potential to affect stakeholders in a number of interdependent sectors, from agriculture to municipal development. Are the water savings generated by demand management enough to have a meaningful impact on the water supply of the Colorado river? If other broad, comprehensive restrictions on consumptive water use are executed, are these incentive-based, individualized approaches even necessary?
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