Advantages of a Market-based Approach to Conjunctive Management in the Humboldt River Basin, Nevada, USA

In basins with a hydrologic connection between groundwater pumping and stream flow, it can be valuable to jointly, or conjunctively, manage groundwater and surface water. Nevada, like many other states, is currently revising its water management approaches and policies to support the implementation of conjunctive management. Nevada’s efforts are focused on the Humboldt River, where groundwater-pumping-induced losses in surface flows have resulted in legal action and where the State is currently leading a stakeholder-involved process to develop a strategy for conjunctive management. This article advocates for a market-based approach to conjunctive management in the Humboldt River Basin. The proposed market-based approach would require groundwater extractors to obtain “offsets” that introduce a volume of water into the river during the irrigation season equivalent to the amount their pumping is estimated to capture. Groundwater pumpers holding offsets could pump their full duty each year without imposing an external cost on downstream surface water right holders through reduced streamflow. We argue that this approach (i) aligns with Nevada water law, including prior appropriations and the Humboldt Decree, (ii) protects the rights of senior surface water users, and (iii) minimizes the negative economic consequences of restricting groundwater extraction in the basin. This article is a commentary paper focused on the potential advantages of a market-based approach and issues related to its implementation in the Humboldt River Basin; further quantitative analysis is necessary to determine the merits of this approach relative to other viable alternatives.