Improving Water Quality with Market Incentives

  • Nature, Animals & Parks
  • 1983

In 1983, a group of flyfishers calling themselves Oregon Trout started working for new water laws that would allow fishermen to buy a right to water and then keep it in a stream. Traditional water law was premised on the idea that if flowing water reaches your property first, you get first rights, but that to keep your rights you must use the water or the next guy can step up. This, of course, destroys incentives for conservation. In 1987 the group got Oregon law amended. Then in 1993, funding from the Northwest Area Foundation allowed creation of the Oregon Water Trust to apply various additional market mechanisms to water conservation. The trust buys water rights to maintain stream flows, or offers other users economic incentives to improve the efficiency of their usage or leave water in streams rather than consume it. This benefits fish and other downstream users who would otherwise come up short.

By 2002, the trust was operating in six major watersheds and completing 80 projects a year in 60 different streams. In 2009, it merged with Oregon Trout to become the Freshwater Trust. In 2012 the trust started a multiyear experiment in water-quality trading, signing a contract with the city of Medford to help it meet expensive water-quality requirements by undertaking cost-effective streambank restorations. The successes of this group in Oregon have spawned similar organizations in other states across the country.

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