The province should let people buy and sell shares of Alberta rivers, say three new reports, but only after it reserves part of them for ecological protection.
Alberta Environment released three reports last week on Alberta's water licence system. The reports, from the Alberta Water Council, the Minister's Advisory Group on Water Management and Allocation, and the Alberta Water Research Institute, recommend the province allow licence holders to buy and sell water allocations amongst themselves.
Water is essentially free in most of Alberta — people can divert as much water as they want so long as they pay a small fee for a new licence. But that's not the case in the South Saskatchewan river basin, which is closed to new licences due to water shortages; there, people who want more water have to buy it from someone who has spare supply.
The reports call on the province to permit such license trading throughout the province. They also recommend that it create explicit, legally binding "protected water" in each river that would be set aside for natural, recreation and navigational needs.
Is any price right?
The province needs to put a price on water if it wants people to conserve it, says Frank Vagi, St. Albert member and former president of the North Saskatchewan Watershed Alliance. "We don't reduce our trash until it starts costing us more. It's the same with water."
But it could also have the opposite effect, says Danielle Droitsch of Water Matters, a provincial watershed group.
"Right now Alberta's rivers depend heavily, especially in the south but also in the north, on unused water [licences]," she said. (The province has allocated 127 per cent of the St. Mary River's average flow, for example, so it would likely run dry if everyone took his or her full share.) Many licensees use just over half their licences, and would encourage more water use if they sold their excess.
That's a real problem that the province will have to address, says John Thompson, a former senior economist at Alberta Environment familiar with the three reports. The province could follow the Americans' lead and simply cancel any unused allotments — the use-it-or-lose-it approach — but that's tough to justify, as many groups (like irrigators) actually do use their whole licence during dry times.
Protected water reserves are an obvious, effective way of protecting river ecosystems, Thompson says. "In the best of worlds, you'd figure out what you need to allocate for the environment and [sell] the rest. Unfortunately, that's not always the case."
Alberta already has to reserve about half the flow in its rivers for Saskatchewan, he notes, which has helped it avoid many of the shortages seen in the U.S. "We need to be setting those limits now, because sooner or later we're going to have to turn off the taps."
The report suggests letting conservation groups buy water to enhance this protection — an idea Vagi was less keen on. "The biggest concern is where they'd get the funds for it." He'd prefer the province to sock that water away instead of making people buy it.
Many parties received their licences for free, Droitsch notes, so they could see huge windfalls if they're allowed to sell them.
Vagi wasn't wild about the idea either, but saw few alternatives. "We need some sort of a financial mechanism in there in order to encourage water conservation." So long as water is free, he says, there will be no incentive to conserve it besides goodwill.
The province will hold public consultations on water market reforms next summer. The reports are available at http://environment.gov.ab.ca/info/library/8239.pdf, albertawatercouncil.ca, and waterinstitute.ca.
