Colorado River

The Economics of Saving a River

Season Martin is the water projects and sustainable finance director for the Conservancy’s Colorado River Program. She’s working on market-based approaches to restoring healthy river flows in the Colorado River basin, where water supplies are shrinking due to drought and warming while demand continues to rise. Here, she explains how water markets and impact investment can help save the river.
"Environmental water transactions will allow us to adapt quickly to conditions without harming agriculture, cities, or nature."

How did you get interested in water issues?

Season Martin:

I grew up in Grand Junction, Colorado, and spent my childhood rafting rivers with my family and friends. I always felt a deep connection to nature, especially rivers. After college, I worked on watershed health issues in the forests of southern Utah, and I restored riparian areas through invasive species removal then went on to earn a Masters of Environmental Science and Management specializing in economics and politics of the environment from the University of California, Santa Barbara.

What kinds of things are you working on now?

Season Martin:

I’m working with the Conservancy’s Colorado River Program to ensure that science is informing water management decisions, to develop and implement innovative water management policy, and to promote long-term sustainable financing. One of the Conservancy’s strengths is that we have staff who live and work in the areas that depend most directly on the river, and we’ve developed some great relationships with the agricultural community. Gaining landowners’ trust is a slow process, but it’s something the Conservancy has been doing well for years. As an example of how that helps us, a rancher might ask us to put a conservation easement on some land, then a few years later that person or one of their neighbors approaches us about an environmental water transaction, and we’re in the right place at the right time to help.

So what is an environmental water transaction?

Season Martin:

It’s any agreement by which a water user commits to change their use and it results in additional water in the river. One party owns the right to use the water, but they can sell or lease it to someone else. We want to shape healthy water markets—that’s a system where buyers and sellers have an easy platform in which to transfer rights—to enable transactions that benefit rivers. Right now there aren’t many water markets with environmental participants in the Basin.

Say a river flows through a farmer’s land and he wants to leave some land fallow. He can lease his water rights instead of irrigating. But that’s a legal and administrative process that can be very complicated and time-intensive and that requires expertise to navigate. That’s a big barrier. In addition, in some areas, there’s a lot of fear about water being taken out of agriculture. People are afraid that if they relinquish their right one year, they’ll never get it back. We need to protect people’s water rights.

We’re working to create policies that would facilitate environmental water transactions. We’re also developing voluntary compensation programs to reduce water use, to make more water available for the environment. Currently, landowners who save water are not being compensated for it. Say your ditch system needs repair, it’s leaking, and water is being wasted. We can help fund the upgrades, and in return there’s less water being diverted out of the river. We also help set up split season leases, in which farmers irrigate for half the year, and we compensate them for letting the water stay in the river the rest of the year. That way it can benefit wildlife and fish and supply downstream users.

Why would farmers be interested in water transactions?

Season Martin:

Farmers are interested in sharing water rights because it allows them more flexibility in the operation of their farm. It creates an additional revenue stream that they can integrate into their business, and it gives them revenue during a year when they might decide to fallow some of their fields. It also provides an incentive to convert to less water-intensive crops or management, because they’ll be compensated for the water they save.

And what’s impact investing?

Season Martin:

It is an investment option that both generates a return and has an environmental or social benefit. More and more people in the business community are becoming interested in socially and environmentally responsible investing, and they’re looking for projects that benefit both the economy and the environment. They want to have those investment options available so that they can align their portfolios with the causes they care about. For example, a municipality might need a loan to fund an infrastructure project that could also generate environmental benefits, and impact investors could offer that loan at a special low interest rate if the municipality guarantees the environmental outcome. We’re working to develop financial mechanisms that support conservation in the Colorado River basin and that generate revenue for investors.

What’s the long-term hope for the river?

Season Martin:

We want to build a flexible system that can respond to climate conditions on a year-to-year basis. As time goes on, we’ll have wet years and dry years, but climate models are projecting longer and more severe dry periods. So long-term, we all have to use less water. Environmental water transactions will allow us to adapt quickly to conditions without harming agriculture, cities, or nature. We can support everyone’s needs. We just need to build the system to do it.


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