Managing a Common Pool Resource

I attended this past week the Governor's Conference on the Future of Water in Kansas that was held in Manhattan, Kansas.  This event, billed as the Governor's first Conference on Water, was actually combined with the former Kansas State University Water and the Future of Kansas Conference which has been conducted every year for the past 28 years.  This event was renamed and reformatted a bit.  Nevertheless, just a tad over 500 other people attended as well.

The Governor's comments were heartening although daunting.  He said he wants to reduce water use in Kansas from the Ogallala Aquifer so as to extend its economic life, while also maintaining or even increasing the economic productivity of the lesser water used.  Much of the conference the first day was aimed at how should we be trying to get this done.

One of the talks was by Dr. Bill Blomquist from Indiana University on managing a common pool resource.  He said there are 8 more-or-less common, or universal elements to any successful, long-lived approach to managing common pool resources - be they fisheries, forests, fields or WATER. They are:

1.  Clearly defined boundaries.  Boundaries can be simple, or multi-layered and sophisticated, but they must be clear;

2.  Shared information.  All the participants must be able to understand, transfer and communicate data, goals, interests, current use levels and all the other parameters needed for understanding the situation.

3.  Leadership.  A consistent level of stakeholder group direction that is knowledgeable and has a commensurate level of expertise - both social and technical - is necessary.  This leadership must allow the group to realize the problem, dedicate to its solution, find and secure necessary resources and then address it.

4.   Development and articulation of rules.  Who can participate; Who sits at the table and who doesn't; how do decisions get made; all have to be defined and understood.

5.  Monitoring and enforcement processes.  Everyone must know the rules and know the consequences.

6.  Graduated penalties.  Arrangements must be made for conflict resolution and opportunities must be provided to complain, communicate and vent.  The penalties need to be fair, and graduated such that initial errors are not akin to taking one's firstborn.

7.  Nested institutions and creating an enabling work environment.  Local, regional and state entities should have a role and play a part in the solutions, but the locals need to play the most significant part as they are the affected ones.

8.  How do we know if it works?  Any effort should plan on getting evaluated and should retain sufficient flexibility.  Creating a process that can accept new data and knowledge and adjust, is important.

For those of us having gone through the SD-6 Enhanced Management Process (a mini common pool groundwater resource) it was like a very bright light bulb getting turned on in the night.  This was exactly how we approached the SD-6 effort.  Kind of makes one feel like we now have a chance at a successful, long-lived process.  We'll have to wait and see.

Probably the best informed readers will recognize this as primarily the work of Elinor Ostrom, the 2009 Nobel prize winning economist (shared with Oliver Williamson) most recently at Indiana University (Dr. Blomquist so credited his remarks).  As it turns out, Mrs. Ostrom was originally contacted  by the Kansas Water Office to make this presentation, but had to decline due to a conflict in the dates.  Sadly, Elinor Ostrom passed away soon thereafter, on June 12, 2012.

Groundwater Management

One of the problems of effective groundwater management (assuming you consider groundwater as a more or less common pool resource) is the tendency of individual users to maximize their use in the near-term lest their neighbor(s) beat them to the gains - most often referred to as "the race to the well".  The prior appropriation system of water rights was supposed to address this condition (and many others) by preventing new appropriations whenever they were likely to impair those that already existed.  Thus protected, there is no pressing need to maximize one's gains immediately - at least not because you're afraid your neighbor will get to your expected benefits first. 

However, in an overappropriated prior appropriation system, the race to the well mentality is rekindled - and becomes stronger the more the overappropriation level is.  Of course the question is:  What are the ways this problem can be addressed?  One way is to administer the system by eliminating junior water rights until you're back to sustainable withdrawal levels.  Another way is to recognize the finite timeframe of the current use and convert all existing water rights (from annual authorized quantities) to absolute quantities based on their share of the pool and how long you want the pool to last.  In actuality this resembles an appropriation correlative rights system.

Administering the system will achieve groundwater sustainability, and relieve the need to maximize individual profits before your neighbor does, but it will also never allow the water remaining in storage to be utilized at all.  The only water available is the long-term annual recharge.  Converting all water rights to absolute quantities can allow the system to achieve stabilization at any pre-chosen level - thus allowing the use of as much or as little of the storage as the governing body chooses. 

In cases where the junior water users are the most efficient, the administration approach leaves only the least efficient users left in the system.  The other approach allows everyone to continue pumping to some extent. Moreover, converting all water rights to an absolute total appropriation allows one to save his or her remaining water right for whatever reasons; makes any potential water market more vibrant, allows users to adopt as aggressive of a conservation strategy they choose, and can even incorporate the senior/junior priority system by the relative weighting of all conversions based on priority.  The proposal can also be staged in to encourage and reward early conservation by individual uses or groups of users.  With all these features, it virtually eliminates any need to use your water early (while it doesn't prevent it), and can actually create advantages for saving your water for later use or marketing.  Maybe we'll discuss this more in a later post.