What If The Colorado River Water Allocation Was Different?

The Actual History

The Colorado River, spanning 1,450 miles from the Rocky Mountains to the Gulf of California, has been described as the lifeblood of the American Southwest. In the early 20th century, as the region's population began to grow and agricultural interests expanded, competition for the river's water intensified. States began to fear that faster-developing areas, particularly California, would establish prior appropriation water rights ("first in time, first in right") before other states could utilize their share.

To address these concerns, representatives from the seven Colorado River Basin states—Wyoming, Colorado, Utah, New Mexico, Nevada, Arizona, and California—met in 1922 to negotiate an interstate agreement. With Commerce Secretary Herbert Hoover as chairman, these negotiations resulted in the landmark Colorado River Compact, signed on November 24, 1922. The Compact divided the river basin into an Upper Basin (Wyoming, Colorado, Utah, and New Mexico) and a Lower Basin (Nevada, Arizona, and California).

The agreement allocated 7.5 million acre-feet (MAF) of water annually to each basin, based on measurements that later proved to be taken during an unusually wet period. Importantly, the Compact did not allocate specific amounts to individual states but rather to the basins as collective units. The Lower Basin states later subdivided their allocation in the 1928 Boulder Canyon Project Act, which gave California 4.4 MAF, Arizona 2.8 MAF, and Nevada 0.3 MAF annually.

Arizona, concerned about California's growing power and water use, refused to ratify the Compact until 1944. The state then spent decades fighting in court to secure its allocation, culminating in the 1963 Supreme Court decision in Arizona v. California that confirmed Arizona's rights. This legal victory helped enable the construction of the Central Arizona Project, completed in the 1990s, which diverts Colorado River water to central Arizona cities including Phoenix and Tucson.

Mexico, initially excluded from these agreements, received a guaranteed allocation of 1.5 MAF annually under a 1944 treaty with the United States. Native American tribes, despite holding some of the oldest and most senior water rights under the Winters Doctrine established in 1908, were largely ignored in the initial compact negotiations.

The system created by these agreements has proven increasingly problematic in recent decades. Scientists now understand that the 1922 Compact was based on flow measurements from an unusually wet period (1905-1922), overestimating the river's average flow by approximately 2 MAF annually. Climate change has further reduced flows, with the river experiencing more than two decades of megadrought since 2000. Lake Mead and Lake Powell, the river's major reservoirs, reached record low levels in 2022, threatening hydropower production and water supplies.

In response to these challenges, basin states have negotiated supplemental agreements such as the 2007 Interim Guidelines, the 2019 Drought Contingency Plan, and the 2023 consensus-based alternative that temporarily reduces water use to protect critical reservoir levels. However, these measures have provided only short-term solutions to the fundamental problem: the Colorado River is overallocated, with legal entitlements exceeding actual water availability by approximately 30 percent in normal years—and even more during drought conditions.

As the Southwest continues to grow in population and economic importance, while facing increasing water scarcity due to climate change, the century-old framework of the Colorado River Compact faces unprecedented challenges that threaten the sustainability of the region's water resources and development patterns.

The Point of Divergence

What if the Colorado River Compact had established a fundamentally different system for allocating the river's water? In this alternate timeline, we explore a scenario where the 1922 negotiations took a dramatically different approach to water rights, creating a more flexible and scientifically informed system that would reshape the development of the American Southwest.

Several plausible alternatives could have emerged from the 1922 negotiations:

First, rather than dividing the river into Upper and Lower Basins with fixed allocations, the negotiators might have adopted a proportional allocation system, where each state received a percentage of the available flow rather than fixed quantities. This approach would have acknowledged the natural variability of the river and automatically adjusted allocations during drought periods.

Alternatively, the Compact might have incorporated regular scientific reassessment of the river's flow, mandating that allocations be adjusted every decade based on updated hydrological data. This would have prevented the fundamental error of basing permanent allocations on the unusually wet 1905-1922 period.

A third possibility is that the Compact negotiators, recognizing the potential for future shortages, might have established a hierarchy of water uses with different priorities during drought conditions, ensuring that critical human needs would be met before less essential uses like ornamental landscaping or water-intensive crops.

The most transformative alternative, however, would have been a market-based approach that established transferable water rights while setting aside environmental reserves. In this scenario, Secretary Hoover, drawing on his engineering background and efficiency-minded approach to governance, convinces the state representatives that the most economically rational approach would be to create a system where water could be bought, sold, and leased across state lines based on its highest economic value, while maintaining minimum flow requirements for environmental health.

This divergence could have occurred through several mechanisms. Perhaps the severe drought of 1917-1921, which immediately preceded the Compact negotiations, might have made negotiators more aware of the river's variability. Or key scientific advisors might have presented more cautious estimates of the river's reliable flow. Most plausibly, the negotiators—particularly Herbert Hoover—might have recognized that the region's future development would be better served by a flexible system that could adapt to changing conditions and knowledge, rather than rigid allocations based on limited data.

In our alternate timeline, the resulting "Colorado River Market Compact of 1922" establishes a fundamentally different framework for managing the lifeblood of the American Southwest.

Immediate Aftermath

Initial State Reactions

The Colorado River Market Compact created immediate political turbulence throughout the basin. California, which had been positioning itself to claim the lion's share of water through prior appropriation, initially objected to the market-based approach with environmental reserves. Governor Friend Richardson declared the agreement "socialism in reverse," arguing that vital resources shouldn't be subject to market forces. However, Los Angeles water officials quickly recognized the potential advantages, calculating that the city's economic power would allow it to purchase water rights as needed.

Arizona, ironically, became the Compact's strongest early supporter—a stark contrast to our timeline where Arizona refused to ratify until 1944. Governor George W.P. Hunt saw the market system as protection against California's domination, telling the Arizona Republic in 1923: "Under this new approach, our future growth is not constrained by arbitrary allocations but by our ability to use water efficiently and productively."

Colorado and Wyoming expressed concerns about the environmental flow requirements, fearing restrictions on their agricultural development. However, the upper basin states ultimately appreciated the proportional allocation aspect that protected them from bearing the full burden of drought years.

Congressional Approval and Legal Framework

The innovative nature of the Compact required more extensive congressional deliberation than in our timeline. The Colorado River Market Compact Act finally passed in 1924, establishing:

A Colorado River Commission with representatives from each state, the federal government, tribal nations, and Mexico
A scientific bureau to conduct ongoing flow measurements and projections
A water rights registry and trading platform
Environmental flow requirements of 15% of the measured ten-year average flow
Provisions for tribal water rights quantification and participation in the market

President Calvin Coolidge, signing the legislation, remarked: "This unprecedented agreement brings American ingenuity and market principles to solve a complex resource challenge. The Colorado River will now flow not merely according to gravity, but according to the invisible hand of economic efficiency."

Dam Construction and Infrastructure Development

The market-based approach significantly altered infrastructure development priorities. The Boulder Canyon Project (later Hoover Dam) proceeded similarly to our timeline, with construction beginning in 1931. However, the project's stated purpose emphasized its role in flow regulation for the environmental requirements and market predictability, rather than specific state allocations.

The most significant early change came in water infrastructure investment patterns. With the ability to purchase water rights across state lines, cities and irrigation districts developed more interconnected regional water systems rather than state-centric projects. Southern California water agencies, for example, invested in efficiency improvements in Imperial Valley agriculture, obtaining the conserved water through market transfers.

Engineering publications from 1930-1935 show that water efficiency technologies received substantially more investment than in our timeline. The journal Western Water Engineering featured innovations like canal lining, low-water agriculture, and municipal conservation techniques far earlier than they appeared in our history.

Early Market Function and Tribal Participation

The first water rights transactions occurred in 1926, primarily involving seasonal leases between agricultural users with different growing cycles. By 1930, more permanent transfers began, with the Metropolitan Water District of Southern California purchasing rights from several agricultural districts in Arizona and Nevada.

Perhaps the most consequential early development was the recognition and quantification of Native American water rights. Unlike our timeline, where tribal water rights remained largely unquantified until late in the 20th century, the Market Compact's provisions led to earlier adjudication. The Winters Doctrine rights of tribes were confirmed, quantified, and entered into the registry by the mid-1930s.

The Colorado River Indian Tribes and the Gila River Indian Community became particularly significant players, leasing portions of their substantial rights to urban areas while retaining enough for their own development priorities. This created an independent economic base for these communities decades earlier than in our timeline.

Mexican Relations and Treaty Development

The inclusion of Mexico in the Commission structure from the beginning created a more collaborative transboundary relationship. Rather than the 1944 treaty that simply guaranteed Mexico 1.5 MAF annually (often of poor quality), the 1933 United States-Mexico Colorado River Treaty established Mexican participation in the market system with both allocated rights and environmental flow responsibilities.

This arrangement meant that when drought conditions emerged in the late 1930s, Mexican water users had the same flexibility as their American counterparts to lease additional rights or sell some of their allocation, rather than simply receiving a reduced quantity as occurred in our timeline.

Long-term Impact

Transformed Settlement Patterns

By the 1950s, the Colorado River Market Compact had fundamentally reshaped development across the American Southwest in ways that diverged dramatically from our timeline. The ability to transfer water rights across state lines based on economic value created different urban growth patterns and agricultural landscapes.

Urban Development

In our timeline, Las Vegas grew explosively after World War II, creating one of the most water-intensive metropolitan areas in the midst of a desert. In the alternate timeline, Nevada's limited initial water rights made such growth economically challenging under the market system. While Las Vegas still developed as a tourism destination, its growth followed a more compact, water-efficient pattern. City ordinances banned ornamental turf as early as 1952, and the city became known for its desert-adapted landscaping and architecture.

Phoenix and Tucson followed a similar trajectory. Without the massive subsidized water deliveries from the Central Arizona Project that enabled sprawling development in our timeline, these cities adopted water-efficient building codes, xeriscaping, and density requirements decades earlier. Urban planners from around the world studied the "Arizona Model" of desert-adapted urban design.

Southern California, with its economic might, continued to grow but with notably different patterns. Rather than the sprawling lawns and swimming pools of our timeline's suburbs, Southern California residential development emphasized multi-family housing, shared green spaces, and water-recycling systems. San Diego emerged as a global leader in water efficiency technology and desalination research by the 1960s.

Agricultural Transformation

The market system drove significant changes in agricultural practices across the basin. High-value crops that provided more economic return per gallon became dominant, while low-value, water-intensive crops declined more rapidly than in our timeline.

Imperial Valley farmers, able to sell water rights to urban areas at premium prices, invested heavily in precision irrigation technology, covered agriculture, and crop selection optimization. By the 1970s, Imperial Valley had transitioned from flood irrigation to micro-irrigation systems at three times the rate seen in our timeline, producing higher-value crops with less than 60% of the water use.

In Arizona, the ability to sell water rights created a natural check on groundwater pumping, as farmers could compare the value of selling their Colorado River allocations against the cost of groundwater pumping. This market mechanism helped prevent the severe groundwater depletion that occurred in our timeline.

Technological Innovation

The economic incentives created by the market system accelerated water technology development by decades. Water efficiency became a major focus of both private investment and university research throughout the region.

By the 1960s, when most American homes in our timeline still had high-flow fixtures, the Colorado River Basin states had widely adopted low-flow technologies. Residential water recycling systems became common in new construction during the 1970s, decades before similar adoption in our timeline.

Agricultural technology saw even more dramatic advancement. Drip irrigation, soil moisture sensors, satellite-based crop management, and advanced weather forecasting for irrigation scheduling all developed more rapidly. Israel and the American Southwest engaged in a virtuous cycle of water innovation, regularly exchanging technologies and approaches.

Municipal water recycling for indirect potable reuse began in Southern California in the 1960s rather than the 2000s. By 1980, most major Southwestern cities were recycling more than 50% of their wastewater, compared to minimal recycling in our timeline.

Environmental Outcomes

Perhaps the most striking difference between the timelines emerged in environmental conditions. The Market Compact's required environmental flows maintained the Colorado River Delta as a functioning ecosystem rather than the desiccated remnant seen in our timeline.

The river regularly reached the Gulf of California, supporting fisheries and wetlands that disappeared in our history. This environmental preservation had significant benefits for both Mexican and American communities along the lower river and delta.

The scientific monitoring requirements also meant earlier detection of environmental issues. Salinity problems were addressed in the 1950s rather than the 1970s. Sediment management strategies were implemented from the beginning of major dam operations, rather than becoming a crisis management issue decades later.

By maintaining minimum flows throughout the system, the river's riparian ecosystems remained more intact. Native fish species faced challenges from dam construction as in our timeline, but the maintenance of more natural flow patterns reduced the severity of their decline.

Economic Development and Water Security

The market-based approach created a fundamentally different economic relationship with water throughout the region. Water rights became valuable assets that could be optimized, traded, or leveraged for financing. This created more efficient water use across sectors and greater ability to adapt to changing conditions.

During the drought periods of the 1950s and 1960s, the system's flexibility proved advantageous. Rather than rigid curtailments based on political negotiations, the market allowed water to flow to highest-value uses while the proportional allocation aspect ensured shared sacrifice.

The early recognition of tribal water rights also created different economic outcomes for Native American communities in the basin. With quantified rights that could be leased but not permanently sold off-reservation, tribes developed water management enterprises that became significant economic engines. The Colorado River Indian Tribes developed one of the region's most sophisticated water management organizations, leasing rights to cities while investing in tribal agricultural operations and water-based recreation economies.

Climate Change Response

As climate change impacts began to affect the Colorado River Basin in recent decades, the alternate timeline's water management system demonstrated greater resilience. The scientific bureau's ongoing monitoring provided earlier detection of changing hydrological patterns, while the market system offered flexibility in adaptation.

When severe drought conditions emerged in the early 2000s (as in our timeline), the proportional allocation system automatically adjusted all users' expectations rather than requiring emergency negotiations. The environmental flow requirements became more challenging to maintain, but the system's built-in flexibility allowed for adjustments that preserved critical habitat while sharing shortages.

Water banking—storing unused allocations underground for future use—developed decades earlier than in our timeline, creating greater drought resilience. Arizona's water banking program began in the 1960s rather than the 1990s, accumulating significant reserves before the drought conditions of the 21st century.

By 2025, while the Colorado River still faces significant challenges from climate change in this alternate timeline, the system's inherent flexibility, scientific foundation, and market efficiency have created a more resilient water management regime than our current reality.

Expert Opinions

Dr. Maria Ramirez, Professor of Water Resources Economics at the University of Arizona, offers this perspective: "The market-based Colorado River Compact represents one of history's great 'might-have-beens' in natural resource management. By using economic incentives rather than rigid allocations, this alternative system would have driven conservation and efficiency through self-interest rather than crisis management. Our current system waits for emergencies before driving change; the market approach would have built adaptation into everyday decision-making. While markets aren't perfect solutions for all resource challenges, for the Colorado River, establishing transferable rights with environmental safeguards in 1922 would have created a century of different development choices that might have better prepared the region for the climate challenges we now face."

John Echohawk, Executive Director of the Native American Rights Fund, provides a contrasting view: "While earlier recognition of tribal water rights would have provided significant economic benefits to Native nations in the Colorado River Basin, we must question whether a market-based approach would have adequately protected cultural and spiritual connections to water. Water is not merely a commodity to Indigenous peoples but a living entity with cultural significance that transcends economic value. The hypothetical Market Compact might have provided tribes a seat at the table decades earlier, but would market pressures have created different forms of coercion? What's most needed, in any timeline, is recognition that tribal relationships with water encompass dimensions beyond Western economic frameworks."

Dr. Peter Gleick, co-founder of the Pacific Institute and expert on global water issues, assesses the alternative history this way: "The rigid allocation system created by the actual 1922 Compact reflects the engineering mindset of the early 20th century—the belief that nature could be completely controlled and managed through infrastructure. A market-based approach with environmental provisions would have represented a more sophisticated understanding of both economics and ecology. The real tragedy of the Colorado River management isn't just that it over-allocated the water, but that it created a legal framework resistant to adaptation. In our current climate crisis, flexibility and adaptability are precisely what water management systems need most. This alternate history offers valuable lessons for reforming not just the Colorado River Compact but water governance systems worldwide that face similar challenges of scarcity and climate change."