Overview of Water Allocation Law

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"The life of the law has not been logic, it has been experience." Oliver Wendell Holmes, Jr. , The Common Law (1881).


Management of water--what is sometimes called water allocation--in the eastern United States is a complicated set of laws and relationships. Water allocation is no more or less than the rules under which the use of water by individuals and firms is regulated. Understanding this eastern U.S. management scheme starts with understanding riparian rights. But it doesn't end there; in the twenty-first century, water management is also deeply affected by federal laws, interstate arrangementsoperating rules for major impoundments and by state regulation that varies from state to state. These overlapping and sometimes conflicting rules, and the institutions that administer them, have created a large set of important legal and bureaucratic categories of water. Further, who has access to particular quantities of water treated to a level suitable for drinking, and who has the right to discharge waste into water, is governed not just by federal and state law, but also by rules of water utilities and private water companies. Here is a map of water allocation in North Carolina. Here are some of the key court decisions on water rights in North Carolina


By contrast, water allocation in the western United States follows a significantly different management scheme, that of prior appropriation of water rights. Water rights are actively traded in water markets.


Who owns the water? We are conditioned to think of property rights (who owns what) as synonymous with management responsibilities. But as the limited, finite, but renewable water supply on earth passes through its various stages, it is sometimes owned as a private good, sometimes widely available as a public good, and oftentimes in an in-between legal and economic status where it is owned by no one but it available for use by a limited number of people. So water defies many of our common expectations about law and policy, just as it has long defied easy understanding in a theory of value. Why does a diamond cost more than water? Economists have long used this Paradox of value to test and explain basic tenets of their discipline.


Turning back to Justice Holmes: he laid out a summary of the publicness of water in a 1908 U.S. Supreme Court case, Hudson County Water Co. v. McCarter, “

[F]ew public interests are more obvious, indisputable and independent of particular theory than the interest of the
public of a State to maintain rivers that are wholly within it substantially undiminished, except by such drafts upon them as the guardian of the public welfare may permit for the purpose of turning them to a more perfect use. This public interest is
omnipresent wherever there is a State, and grows more pressing as population grows. It is fundamental, and we are of the
opinion that the private property of riparian proprietors cannot be supposed to have deeper roots. … The private right to
appropriate is subject not only to the rights of lower owners but to the initial limitation that it may not substantially diminish one of the great foundations of public welfare and health.[1]

Notes

  1. 209 U.S. 349, 356 (1908), cited in Joseph Sax, Barton Thompson, Jr., John Leshy, Robert Abrams, Legal Control of Water Resources, 3rd ed., 539 (2000).

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