Coping with Competition: Reservoir Water and Related Resources

In most times and places, reservoir-related ecosystems cannot satisfy all the demands for goods and services, which results in competition for the resources. An appropriately structured description of the competition provides a useful framework for understanding an economic tradeoffs associated with different water allocations. Useful insights into how the competition for reservoir-related goods and services is evolving can be gained by comparing commercial demands (irrigation, hydropower, etc.) with Consumers' demands for goods and services that directly enhance their well-being. Commercial demands have dominated the competition because they could generate high market values,jobs, and incomes. This advantage is diminishing though as some consumer-related goods and services increasingly exhibit higher values and show a greater ability to generate jobs and incomes. Especially important are demands for recreation and other amenities that affect household-location decisions and demands for services that affect the cost of living. Failure to manage reservoirs to match the evolving competing demands for different goods and services negatively impacts local and regional economies, costing them jobs and prosperity. Reservoir-management policies and associated economic-development activities that significantly compromise the environment will likely do more economic harm than good. Reservoir managers can best promote long-run economic prosperity by encouraging efficient transitions away from