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Graphic and User Interface Designer,

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The talk seems to be a proponent of regulation of the market, rather than a proponent of the market itself.

From my perspective, what Mr. Harmon is describing is actually a spectacular example of market forces not working. As in, well, the market did not actually work :) Only when regulating the conditions of the market did the problem start to become resolved. Perhaps I am biased, but rather than a positive story, this ended up being a horror story about how bad legalese and arcane market laws can ruin a system.

Of course, you could turn this bias around and also see it as an example of the market being corrected by capable people, but to be honest, given the incredible time span, I tend to not do that.

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    Mar 28 2011: Mojens,

    Well, my experience tells me that it is not a matter of:
    1) Markets good, regulation bad, or
    2) Regulation good, markets bad.

    There are markets that work and markets that don't work and there are regulations that work and regulations that don't work. Water rights (which operate as a regulated market) were put in place 100+ years ago when the world was very different than it is today.

    In my view, it is essential that we bring creativity to bear on the world as it is to help it (and help us) "evolve" to meet our current conditions. I don't want to get trapped in despair. One of the most inspiring things about TED is its active demonstration of the power of creativity to create solutions. So, as sad as the past 100 years have been for these streams, at least we have found a path to bring stakeholders together and begin a real conversation, perhaps next to a flowing river or stream.
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      Mar 28 2011: Rob-

      I have to admit to being a bit confused at the system developed around these streams. If some streams have senior water rights for 50-100 times the volume they carry doesn't that mean that by securing 1-2% of the right's holders in the way you mentioned that you'd be securing the entire volume of the river?

      As someone who works extensively with energy credits here in NJ and is very comfortable with the abstract nature of that market I'm disappointed with myself that this seems so obtuse.

      Thanks
      Brian
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        Mar 28 2011: Hi Brian,

        Think about western water rights like a fully implemented cap and trade system. The senior water rights holders have claim to (usually) large amounts of whatever water is in the stream. They also have the first claim. So, if there is a lot of water one year, the junior folks might get some water after the senior folks have gotten all they have rights to. In a dry year, there may not be enough for anyone other than the senior folks. In a really dry year, the senior folks may not get everything the could because the water simply isn't there.

        What the program in the video does is take some portion of the senior water and protect it in the stream, period the end. How much water is protected in the stream is determined by combining a biological assessment of what the river needs when, with the reality of which senior water rights holders want to participate.

        To be sure I answer your question, you wrote, "If some streams have senior water rights for 50-100 times the volume they carry doesn't that mean that by securing 1-2% of the right's holders in the way you mentioned that you'd be securing the entire volume of the river?"

        It is important to understand that the water is not divided up evenly between each water right holder. The senior folks might own 80% of the water available in an average year.

        Did I answer your question?

        Best,
        Rob
  • Mar 28 2011: Mr. Harmon,

    Thanks for your reply

    I agree, as with most things, the truth lies somewhere in between, I would say - and I do applaud what you've achieved, which is exactly what you said: creative thinking to meet a current condition.

    Kanzaki-san,

    I think you're right that the problem here has actually been one of mis-applied regulation in the first place. I don't think the solution is to go 'all market' and exclude regulation entirely (that would be absurd, akin to scrapping all laws simply because somebody mis-used one of them) - the solution must be a more organic approach to it all, so we can avoid 100-year-old out-dated laws dictating how things work now.
  • Mar 27 2011: I would disagree, for a free market to function properly strong property rights are required. The "senior water rights" holders should therefore have been entitled to complete rights over the stream, include the right to not use the water in the stream.

    Due to the fact that the legal system didn't grant complete rights over the stream, and instead decided to only grants rights to those who actively used the stream, the end result was a "tragedy of the commons" by proxy.