SRDC Series #206

Interstate Water Allocation Economics & Incentive-Based Approaches to Environmental Regulatory
Reform, SRIEG-10-Abstract
June 1997

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Interstate water disputes are an increasingly common occurrence throughout the United States, as the demands on transboundary water resources continue to increase in magnitude and diversity. These disputes can involve a variety of water-related issues. In the arid and semi-arid West, the interstate allocation--or "apportionment"--is normally the central and often only concern. In the more humid East, issues such as water quality, environmental protection, and water development are also often featured; however, even in these disputes, allocation of the resource is often a major component of the underlying dispute. A current example can be found in the Apalachicola-Chattahoochee-Flint and the Alabama-Coosa-Tallapoosa River basins (ACF/ACT). A Corps of Engineers' plan to augment municipal water supplies in Atlanta through a reallocation of storage in Lake Lanier (in northern Georgia) is being challenged by downstream interests in Alabama and Florida, fearful that additional Upper Basin water consumption will reduce downstream flows and degrade water quality, to the detriment of agricultural, navigation, and environmental interests (Vest, 1993; Erhardt, 1992). Recreation interests and landowners near Lake Lanier also oppose the reallocation plan. By unanimous consent of the four involved parties (the three states and the Corps), judicial proceedings before the Supreme Court have been placed in an inactive docket while a negotiated solution is pursued. In this report, the major tools used to resolve and implement interstate water allocation disputes are summarized. This discussion covers three related topics: an examination of the legal mechanisms available for making interstate apportionments; an overview of some of the allocation formulas and philosophies that can be used to quantify the apportionment; and finally, an examination of the administrative arrangements that can be used to implement the interstate apportionment. While this discussion is equally applicable to all American River basins, the ACF/ACT controversy is periodically referenced to illustrate some salient issues involved in interstate water disputes.