The cost of addressing saline lake level decline and the potential for water conservation markets

The world's saline lakes are shrinking and human water diversions are a significant contributor. While there is increased interest in protecting the ecosystem services provided by these lakes, the cost of protecting water levels has not been estimated. To explore this question we consider the case of Great Salt Lake (Utah, USA) where human diversions from three rivers have caused the lake level to decline during the last century. Recent work has suggested the restoration of inflows is necessary to maintain a target elevation consistent with well-functioning ecosystems. We construct cost estimates of increasing water inflows using conservation cost curves for each river basin. We then compare the cost of uniform cutbacks to cap-and-trade systems which allow intra- and inter-basin trading. The cost of water to permanently implement uniform water right cutbacks to increase inflows by 20% above current levels is $37.4 million. Costs and cost-savings are sensitive to alternative allocation, inflow, and cost assumptions, and we estimate significant cost reductions from intra-basin water conservation markets (5-54% cost decrease) and inter-basin water conservation markets (22-57% cost decrease).