The Bush Administration agreed this week to compensate California farmers some $17 million for financial losses those farmers suffered when the federal government, in order to protect endangered species, denied them use of some water.

The agreement seems a relatively minor development in an arcane area of water law, but it merits the prominent coverage given it in the Los Angeles Times, Sacramento Bee, and Washington Post. The principle at stake is a big deal.

If the government takes your land-something clearly covered by strong property rights-it must compensate you. If the government takes your water, however, it needn’t compensate you. That’s because it’s not really your water. It’s the public’s water. You’ve simply been granted a permit to use some water and it’s conditional. You can use the water, if there is enough to go around, if you use it efficiently, and if doing so is beneficial for society. That’s the dominant legal tradition on water rights, well articulated by legal thinkers such as the University of Colorado School of Law’s Charles Wilkerson.

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  • Property rights activists have long tried to transform water rights into something much more like rights to land. The federal government, by agreeing to compensate water-rights holders for their loss of water to endangered-species protection, has essentially switched over to the property-rights activists’ side. If this agreement becomes the standard approach, it will wreck efforts to conserve Cascadia’s natural heritage. Governments will never have enough money to pay people to do the right thing.

    It’s also a subversion of the first principle of sustainable economics: that prices should tell the ecological truth. After all, it’s two centuries of irrigation and other river-draining water uses that has undermined so many fish and other aquatic species in the North American West (and the jobs that they once supported). Irrigators and other water users pay nothing to consume the public’s water in the United States (and hardly anything in Canada), nor do they compensate the public for the resulting ecological damage. For the Bush Administration to pay them is a travesty. In a just world, the administration would bill them.

    Cascadia needs to prepare itself. The lawyer who represents the California irrigators has already filed a $1 billion claim against the US government on behalf of farmers in the Klammath Basin—the epicenter of Cascadia’s water controversies.