Water Markets Can Help Semi-Arid Prairies: Environmentalists short-circuiting debate

Commentary, Water, Joseph Quesnel


The question of water in the Prairies is too important to be left to alarmism, unscientific claims, and half-truths.
The southwestern Canadian prairies are semi-arid and prone to frequent and severe droughts. Areas around Regina and east of Calgary are quite dry and precipitation quickly dissipates.
Water scarcity and environmental conservation are pressing matters, but it is no reason for one side to dominate the debate about the future of our water supply.
Alberta where water scarcity is a significant concern, particularly in the south.
Easily aroused fear in this semi-arid region that supports 60 per cent of the country’s irrigation, yet has two per cent of its freshwater supply, can quickly turn to hysteria. The problem is aggravated by the reality that most of the province’s water is in the north but demand is largest in the south.
Population growth raises legitimate questions about strains on the limited water supply. Historically, Alberta relied upon a "first-in-time, first-in-right" system of water allotment where senior licence holders receive full entitlement before junior licencees receive a share.
A reduced water market emerged in 2006 when the province, fearing over-allocation, closed off southern Alberta river basins to new licences, but growing municipalities required water and had to make arrangements with irrigators and senior licencees for allocations. So, Alberta created a system of tradable permits.
It is recognized, however, that the licence transfer system needs reform.
The Alberta government took on a daunting challenge when it announced a few years ago that it was open to the introduction of a full-fledged water market. The province has been gathering public input ever since.
Environmentalist organizations with anti-market biases (regardless of proven outcomes) have monopolized the debate. Although environmentalists are important to the debate, alarmist and unscientific attitudes help in nothing.
In the southern Alberta city of Lethbridge, for instance, the Southern Alberta Council on Public Affairs (SACPA), a weekly forum to discuss topical issues, invited Kevin Force, a spokesperson for the Sierra Club and Public Interest Alberta to speak at their weekly meeting. Force argued the government’s proposed water market system would inevitably become dominated by wealthy private interests and would run counter to water conservation goals.
SACPA invited two speakers to discredit the water market system. Last year, water campaigner Sheila Muxlow argued against water markets for Alberta.Both speakers are political activists. They are not water conservation experts or water management economists. They have degrees in political science and globalization studies. Their passion and research does not make up for the absence of proper credentials.
Dave McGee, a Lethbridge-based water policy expert with Alberta Environment, attended the Sierra Club talk in January 2010. He described it as riddled with inaccuracies and said so at a public forum.
Environmentalist organizations continually claim that water use needs to be hierarchical, placing commercial uses at the bottom. This naïve line of argument ignores that commercial uses of water and ‘human consumption’ are intertwined: businesses denied water results in the deprivation and the unemployment of humans.
Prairie residents knowthere is plenty of credible evidence that the goals of human consumption and environmental conservation are not incompatible. Henning Bjornlund is Research Chair in Water Policy and Management at the University of Lethbridge. Prof. Bjornlund wrote an excellent policy commentary for the C.D. Howe Institute defending water markets for southern Alberta and demonstrated how they can meet both conservation and consumption goals.
If we only hear from the Sierra Club, we’ll ignore potential solutions and we would miss examples from Australia and the Western United States, where water markets have helped address water shortage. Danielle Droitsch of environmental NGO Water Matters suggests that some water be open to the market while some be exempt from the marketplace. 
We would also miss the pioneering work of Elizabeth Brubaker with Environment Probe, a think tank researching market- based solutions to environmental challenges. Brubaker argued water without prices leaves little incentive for conservation. Water markets, she would say, should come with water pricing reform.
Research concludes that limited water markets in Southern Alberta aid conservation.
Lorraine Nicol, a research associate in economics at the University of Lethbridge, completed her 2005 master’s thesis on Irrigation Water Markets in Southern Alberta.  She found that “Markets permit water to move to higher-value uses, thus increasing the resource’s productivity and enhancing economic growth. Conservation efforts can also be enhanced, since users, able to sell any excess water, are provided an incentive to conserve. For unprofitable producers, selling their water rights provides needed cash and may help to facilitate an exit from the industry.”
Water issues are vital in the semi-arid Prairies. We may be depriving ourselves of key solutions if we only accept one voice and stiffle debate.