Water Allocations in the South Saskatchewan

River Basin

SSRB area

Source: “Some SSRB info and Approved SSRB Water Management Plan Implementation Project,” Alberta Environment

SSRB River Basins

Source: “Some SSRB info and Approved SSRB Water Management Plan Implementation Project,” Alberta Environment

Current Allocation method

Source: “Some SSRB info and Approved SSRB Water Management Plan Implementation Project,” Alberta Environment

“FITFIR”

“First in time, first in right”

Oldest water licenses get priority over newest

Oldest licenses are the largest

Municipalities often have the oldest licenses

Licenses rarely sequential geographically

Problems

Source: “Some SSRB info and Approved SSRB Water Management Plan Implementation Project,” Alberta Environment

All four river basins are oversubscribed.

Two river basins have experienced degraded environmental conditions by not meeting Instream Flow Needs (IFN).

Large amounts of water have to be moved between river basins to meet demand and agreements with Saskatchewan.

Economists believe FITFIR is not “economically” efficient.

Goods

High Subtractability

Low Subtractability

LowExcludability

HighExcludability

PrivateGoods

Common PoolResources

PublicGoods

TollGoods

limited access CPR

Source: Adapted from Ostrom, Elinor (2005). Understanding Institutional Diversity. Princeton University Press. Princeton, NJ, U.S.A.

Proposed solutions1) Free market approach based on Murray-Darling River Basin in Australia (new Water Act)

2) Leave existing Water Act intact, but increase Water Conservation Objectives (WCOs) and clawbacks on transfers

3) Community-based management/localized decision-making (minor changes to Water Act)

IssuesMarket-based approaches ignore water is a common pool resource, not a private good.

Murray-Darling River Basin had severe environmental degradation during droughts.

Economists’ reports are overly optimistic?

Not a lot of political support for community-based management, but a lot of political support for market-based approaches.

Proposed ModelingNeed to compare predicted outcomes against each other on the same playing field.

Use Institutional Analysis and Development framework to develop the rules based on the proposed solutions.

Test if conditions such as IFN are met.

Test economic outcomes.

Proposed ModelingLikely choice would be agent based modeling, using the rules developing through IAD examination of the proposed solutions.

Model has to be able to handle both sequential and simultaneous deterministic and stochastic events and outcomes.

Localized failures can affect downstream agents.

ParametersVolume of water licenses

Geographic location of water licenses

Priority numbers of water licenses

Inter-provincial and international water agreements

Inter-river basin transfers

Naturalized flow and natural recharges

VariablesRainfall

Price of oil

Price of selling water license

Price of short term transfer of water license

Population growth

IFN/WCO levels