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— a project of the Texas Public Policy Foundation —

Water Markets

How Texas has historically chosen to manage water, be it surface water or groundwater, has hindered the ability of participants to arrive at a market valuation of the resource. Texas needs a well-functioning water market that allows participants to arrive at a true market value for water in order to meet Texas water needs as it responds to a growing population and economy, shifting patterns of use, and changing weather conditions.

“Texas needs water markets that allow market participants to value water based on voluntary exchange, accurately assess available information about state natural resources to more rigorously estimate current and future demand, and to determine optimal strategies to supply the water we need.”
— The Honorable Kathleen Hartnett White

Recommendations

  • Protect the seniority of water rights transferred between basins to keep Texans supplied with water.

Talking points for liberty fighters

  • The 2017 SWP estimates Texas will need an additional 8.9 million acre-feet of water a year until 2070 to meet demand under drought conditions.
  • Implementation of the water supply strategies in the 16 Regional Water Plans has an estimated capital cost of $62.6 billion.
  • Voluntary redistribution of existing water supply through water marketing is constrained by state and local district regulations.
  • Water management strategies could generate nearly 3.4 million acre-feet of additional supply per year by 2020, according to the SWP.
  • Surface water strategies in the SWP are estimated to produce 3.8 million acrefeet of additional supply per year, approximately 45% of the total recommended strategy supplies in 2070.
  • The 2017 SWP recommends construction of 26 new reservoirs, which would add 1.1 million acre-feet of new supply annually by 2070.

Research