The role of economics in transboundary restoration water management in the Colorado River Delta

In fully allocated rivers, providing restoration flows requires water transfers from incumbent users. Such transfers are often contested and are complicated within federal rivers and international rivers. In this paper, we investigate ecological restoration flows in the Colorado River Basin, a basin that spans seven U.S. states, two Mexican states, and contains significant estuarine and wetland ecosystems. Our investigation of a one-time pulse flow for the Delta illustrates the potential of fundamental economic concepts (opportunity cost, marginal analysis, and Pareto-improving compensation) in developing restoration options. Specifically, through the quantification of trade-offs from water transfers, provision of guidance on how to affect such water transfers at least-cost to society, and the identification of “win–win” opportunities. For instance, we find that whole-basin scale management not only enables transboundary financial and water transfers but also supports creative options for water resources management such as the utilization of transboundary storage. We discuss new opportunities within the U.S.–Mexico Treaty framework that support transboundary restoration and the tension between this readiness to cooperate and competition for low cost water transfers.