Background and objectives of the study
Climate change is leading to enhanced uncertainty, increased variability and intensive shortage of water resources. Thus new challenges are arising for water resources management regarding water institutions and management mechanisms, even in such areas that traditionally have not been afflicted with water scarcity and related stresses. Water institutions are composed of water law, policy, and administration. Institutional changes within the water sector occur due to the influence of both endogenous and exogenous factors.
Our fundamental investigation involves the way in which adequate and optimal policies might facilitate designing and development of water institutions under climate change. As discussed below, we focus on the different roles of actors involved, past and current institutions, and property right regimes. We look at climate change and induced variability of water resources as a source of agricultural production and welfare variability, which can further result in variability of incentives to managing and applying water resources to better adapt to climate change.
Three major water doctrines in U.S. and comparison in five representative states
There are three major water allocation doctrines existing in U.S. Roughly separated by Kansas City, riparian doctrine dominated most of eastern states, including Illinois and Missouri. Riparian rights are obtained based on ownership of riparian land, bordering or underlying watercourses or covering groundwater aquifer. In contrast, prior appropriation doctrine prevails 18 western states, for instance, Nebraska and Kansas, and establishes the principle of “first in time, first in right”, that is, the first user has a senior right to water resources. In past 60 year, 17 eastern states, e.g., Iowa, have adopted regulated riparianism to manage allocation of water resources and permits need to be obtained to practice the reasonable use of water resources.
Institution designing for water management and policy implications
Institution designing for multilayer water management should be focusing on three aspects. 1) Political intervention needs to emphasize lower transaction costs policy options, transferable and flexible property right, spatial and temporal adaptation strategies. 2) Economic incentives (water market) can facilitate improvement of irrigation techniques, investment in adaptation actions. 3) Public participation should incorporate farmer level planning and management, and provide more information to improve the social learning process.
Our analysis demonstrates that, with regard to water management and climate change, the primary focal point for management policy and institution devising should be on the facilitation of 1) interaction of multilayer institutions, 2) coordination of stakeholders, 3) effectiveness of property right regimes, and 4) learning from the past and other places with low transaction costs.