Science Policy
day one project

U.S. Water Policy for a Warming Planet

04.05.24 | 14 min read | Text by Lori Adornato

In 2000, Fortune magazine observed, “Water promises to be to the 21st century what oil was to the 20th century: the precious commodity that determines the wealth of nations.” Like petroleum, freshwater resources vary across the globe. Unlike petroleum, no living creature survives long without it. Recent global episodes of extreme heat intensify water shortages caused by extended drought and overpumping. Creating actionable solutions to the challenges of a warming planet requires cooperation across all water consumers.

The Biden-Harris administration should work with stakeholders to (1) develop a comprehensive U.S. water policy to preserve equitable access to clean water in the face of a changing climate, extreme heat, and aridification; (2) identify and invest in agricultural improvements to address extreme heat-related challenges via U.S. Department of Agriculture (USDA) and Farm Bill funding; and (3) invest in water replenishment infrastructure and activities to maintain critical surface and subsurface reservoirs. America’s legacy water rules, developed under completely different demographic and environmental conditions than today, no longer meet the nation’s current and emerging needs. A well-conceived holistic policy will optimize water supply for agriculture, tribes, cities, recreation, and ecosystem health even as the planet warms.

Challenge and Opportunity

In 2023, the National Oceanic and Atmospheric Administration (NOAA) recorded the hottest global average temperature since records began 173 years prior. In the same year, the U.S. experienced a record 28 billion-dollar disasters. The earth system responds to increasing heat in a variety of ways, most of them involving swings in weather and water cycles. Warming air holds more moisture, increasing the possibility of severe storm events. Extreme heat also depletes soil moisture and increases evapotranspiration. Finally, warmer average temperatures across the U.S. induce northward shifts in plant hardiness zones, reshaping state economies in the process.

As a result, agriculture currently experiences billions of dollars in losses each year (Fig. 1). Drought, made worse by high heat conditions, accounts for a significant amount of the losses. In 2023, 80% of emergency disaster designations declared by USDA were for drought or excessive heat.

Figure 1

Agriculture consumes up to 80% of the freshwater used annually. Farmers rely on surface water and groundwater during dry conditions, as climate change systematically strains water resources. Rising heat can increase overall demand for water for irrigating crops, exacerbating water shortages. Plants need more water; evapotranspiration rates increase to keep internal temperatures in check. Warming is also shrinking the snowpack that feeds rivers, driving a “snow loss cliff” that will impact future supply. Compounding all of this, Americans have overused depleted reservoirs across the country, leading to a system in crisis.

America’s freshwater resources fall under a tangle of state, local, and watershed agreements cobbled together over the past 100 years. In general, rules fall into two main categories: riparian rights and prior appropriation. In the water-replete eastern U.S., states favor riparian rights. Under this doctrine, property owners generally maintain local use of the water running through the property or in the aquifer below it, except in the case of malicious overuse. Most riparian states currently fall under the Absolute Dominion (or the English) Rule, the Correlative Rights Doctrine, or the Reasonable Use Rule, and many use term-limited permitting to regulate water rights (Table 1). In the arid western region, states prefer the Doctrine of Prior Appropriation. Under this scheme, termed “first in time, first in right,” property owners with older claims have priority over all newer claimants. Unlike riparian rights, prior appropriation claims may be separated from the land and sold or leased elsewhere. Part of the rationale for this is that prior appropriation claims refer to shares of water that must be transported to the land via canals or pipes, rather than water that exists natively on the property, as found in the riparian case. Some states use a mix of the two approaches, and some maintain separate groundwater and surface water rules (Fig. 2).

Figure 2

Original “use it or lose it” rules required claimants to take their entire water allotment as a hedge against speculation by absentee owners. While persistent drought and overuse reduced water availability over time, “use it or lose it” rules continue to penalize reduction in usage rates, making efficiency counterproductive. For example, Colorado’s “use it or lose it”’ rule remains on the books, despite repeated efforts to revise it. In a sign of progress, in 2021, Arizona passed a bipartisan law to change their “use it or lose it” rule to guarantee continued water rights if users choose to conserve water.

Water scarcity extends well beyond the arid western states. In the Midwest, higher temperatures and drought exacerbate overpumping that continues to deplete the vast Ogallala Reservoir that underlies the Great Plains (Fig. 3). Driven in part by rising temperatures, the effective 100th meridian that separates the arid West from the humid East appears to have shifted east by about 140 miles since 1980, indicating creeping aridification across the Midwest. The drought-impacted Mississippi River level dropped for the past two consecutive years, impeding river transport and causing saltwater intrusion into Louisiana groundwater, contaminating formerly potable water in many wells.

Figure 3. Changes to the water level of the Ogallala Aquifer that underlies most of the Great Plains states show depletion in most regions

Recognition of water’s increased importance, especially in a future of more extreme heat and its cascading impacts, drives new markets for the trade of physical water. The impetus for some markets arises from the variance in water availability and cost between different industries and communities. Ideally, benefits accrue to both sellers and buyers by offering a valuable revenue stream for meeting a resource need. Markets differ between groundwater and surface water. For groundwater markets, agreements allow one user to trade some portion of allocated pumping rights to another local user, although impacts to neighbors and ecosystems that share the aquifer must be considered. Successful groundwater trades rely on accurate assessments of subsurface water levels over time. For surface water trades, a portion of the prior appropriation water can be sold or leased to another user regardless of proximity, or banked for future use. Legislation passed in 2022 enables Colorado River Indian Tribes to lease or trade newly settled water rights, or to bank them for future use in surface or subsurface reservoirs without facing a “use it or lose it” penalty.

There are less obvious water considerations. Import from and export to foreign nations of heavily irrigated crops or water-intensive commodities equates to virtual water trade. The most common virtual water export involves foreign sale of American farmer-grown crops. Other means include sales or leases of domestic land to foreign entities that grow water-intensive crops on U.S. soil, often on arid land, for export. Virtual water trades occur within the U.S. as well, through exchange of goods and services.

Developing a framework for cooperation across end users, complementary to previous frameworks recommended for the Ogallala Aquifer, creates a mechanism to address urgent water issues. Establishing the federal government’s role to convene and collaborate with stakeholders helps all parties participate within a common structure toward solving a mutual problem. To promote sustained productivity and water resources in the face of extreme heat and aridification, a holistic federal water policy should focus on:

The Biden-Harris administration should develop a plan that creates incentives for all stakeholders to participate in water management policy development in the face of rising heat and climate change. Specifically, discussions must consider real reservoir volumes (surface and subsurface), current and future temperatures, annual rain and snow measurements, evapotranspiration calculations, and estimates of current and future water needs and trades across all end users. History supports federal assistance in thorny resource management areas. One close analog, that of fisheries management, shows the power of compromise to conserve future resources despite fierce competition. 

Plan of Action

Recommendation 1. The White House Council on Environmental Quality should convene a working group of experts from across federal and state agencies to develop a National Water Policy to future-proof water resources for a hotter nation.

Progress toward increased scientific understanding of the large-scale hydrologic cycle offers new opportunities for managing resources in the face of change. Management efforts started at local scales and expanded to regional scales. Country-wide management requires a more holistic view. The U.S. water budget is moving to a more unstable regime. Climate change and extreme heat add complexity by shifting weather and water cycles in real-time. Improving the system balance requires convening stakeholders and experts to formulate a high-level policy framework that:

As such, the White House Council on Environmental Quality should convene a working group of experts from across federal and state agencies to create a comprehensive National Water Policy. Relevant government agencies include the DOI; the U.S. Geological Survey (USGS); the Bureau of Indian Affairs; the U.S. Army Corps of Engineers (USACE); Federal Emergency Management Agency (FEMA); Department of Commerce; NOAA; and the USDA. The envisioned National Water Policy complements the U.S. Government Global Water Strategy.

Figure 4. Map of principal aquifers of the U.S.

via USGS

Data products to support the creation of a robust National Water Policy already exist (Fig. 4). USGS, FEMA, the National Weather Service, USDA’s Natural Resources Conservation Service, and NOAA’s National Climate Data Center, Office of Water Prediction, and National Water Center all contribute data critical to development of both high-level and regional-scale assessments and data layers crucial for short- and mid-term planning. Creating term reassessments as more data accrue and models improve supports effective decision-making as climate change and extreme heat continue to alter the hydrologic cycle. An overall water policy must remain dynamic due to changing trends and new data.

National, regional, and local aspects of the water budget and related models and visualizations help federal and state decision makers develop a strategic plan for modernizing water rights for both river water, basins, and groundwater and to identify risks to supplies (e.g., decreasing snowpack due to higher heat) and opportunities for recharge. Stakeholders and water managers with shared knowledge of well-documented data are best positioned to determine minimum reservoir volumes in the primary storage basins, including aquifers, in alignment with the objectives of the National Strategy to Develop Statistics for Environmental and Economic Decisions. By creating a strategy that uses actual average values to maintain reservoir volumes, some of the potential shocks created by drought years and high heat could be cushioned, and related financial losses could be avoided or mitigated. Ultimately, stakeholders and managers must share a common understanding of the water budget when seeking to resolve water rights disputes, to review and revise water rights, and to inform trades.

Basin and local data promote development of a strategic framework for water trades. As trades and markets continue to grow, states and municipalities must account for water rights, both the lease and sale of rights, to buffer large fluctuations in water prices and availability. Emerging markets to “buy” water to “bank” it for sale at a higher price during drought years and/or high heat events should also be monitored and evaluated by relevant agencies like Commerce. States’ and investors’ maintenance of transparency around market activities, including investor purchases of land with water rights, promotes fair trade and ensures stakeholder confidence in the process. 

Finally, to communicate clearly with the public, funds should be provided through the DOI budget to NOAA and USGS data scientists to create decision-support tools that build on the work already underway through mature databases (e.g., at and New water visualization tools to show the nowcast and forecast of the national water status would help the public understand policy decisions, akin to depictions used by weather forecasters. Variables should include heat index, humidity, expected evapotranspiration, precipitation, surface volumes, and groundwater levels, along with information on water use restrictions and recharge mechanisms at the local level. Making this product media-friendly aids public education and bolsters policy adoption and acceptance.

Recommendation 2. USDA should invest in infrastructure, research, and development.

Agriculture, as the largest water consumer, faces scarcity in the coming years even as populations continue to grow. Increasing demands on a dwindling resource and growing need for more water lead to conflict and acrimony. To ease tensions and maintain the goods and services needed to fuel the U.S. economy in the future, investment in both immediately practicable future-proofed, heat-resilient water solutions and over-the-horizon research and development must commence. To prepare, USDA will need to:

To support these efforts and broader climate resilience needs of farmers, Congress can:

Recommendation 3. Federal, state, and local governments must invest in replenishing water reserves.

To balance water shortage, federal, state and local governments must invest in recharging aquifers and reservoirs while also reducing losses due to flooding. Opportunities for flood basin recharge arise during wet years, especially accounting for the shift from longer, frequent, lighter rainstorms to shorter, less frequent durations of very heavy rainfall. Federal agencies currently have opportunities to leverage Inflation Reduction Act (IRA) and BIL money for replenishment, including the following:

Congress can further support these actions by:

Figure 5. Map of insured flood claims

via Washington Post, with credit to Federal Emergency Management Agency, Natural Resources Defense Council


Water policy varies regionally, by basin, and by state. Because aquifers cross regions and water supplies vary over interstate and international boundaries, the federal government is the best arbiter for managing a dynamic, precious resource. By treating the hydrologic cycle as a dynamic system, data-driven water policy benefits all stakeholders and serves as a basis for future federal investment.

This idea of merit originated from our Extreme Heat Ideas Challenge. Scientific and technical experts across disciplines worked with FAS to develop potential solutions in various realms: infrastructure and the built environment, workforce safety and development, public health, food security and resilience, emergency planning and response, and data indices. Review ideas to combat extreme heat here.

Frequently Asked Questions
Why should the Department of the Interior coordinate the stakeholder engagement rather than the states?

DOI already manages surface waters in some basins through the Bureau of Reclamation and through the decision in Arizona vs. California. DOI also coordinates water infrastructure investments across multiple states via BIL funding. Furthermore, DOI agencies actively engage in collecting and sharing water resource data across the U.S. Because DOI maintains a holistic view of the hydrologic cycle and currently engages with stakeholders across the country on water concerns, it is best positioned to lead the discussions.

How does DOI know who the stakeholders should be for each region?

DOI, through the USGS, mapped out most of the largest U.S. aquifers (Fig. 4) and drainage basins. The main stakeholders for each reservoir emerge through those maps. 

How can farmers protect their livelihoods in light of all of the competing water interests?

The best way to maintain agricultural production is to invest in increasingly efficient water farming practices and infrastructure. For example, installing canal liners, pipes, and smart watering equipment reduces water loss during conveyance and application. Funds have been allocated under the BIL and IRA for water infrastructure upgrades. Some government and state agencies offer grants in support of increased water efficiency. Working with seed companies to select drought- and/or flood-tolerant variants offers another approach. Farmers should also encourage funding agencies to ramp up groundwater replenishment activities and to accelerate development of new supporting technologies that will help maintain production.

How can farmers add agrivoltaics or other kinds of renewable energy to their property?

Funds or tax credits are available to help defray some of the costs of installing renewable energy on rural land. Various agencies also offer targeted funding opportunities to test agrivoltaics; these opportunities tend to entail collaboration with university partners.

Why is there so much controversy around the Colorado River water allotments?

Over a century ago, the prior appropriation doctrine attracted homesteaders to the arid Colorado River basin by offering set water entitlements. Several early miscalculations contributed to the basin’s current water crisis. First, the average annual flow of the Colorado River used to calculate entitlements was overestimated. Second, entitlements grew to exceed the overestimated annual flow, compounding the deficit. Third, water entitlement plans failed to set aside specific shares for federally recognized tribes as well as the vast populations that responded to the call to move west. Finally, “use it or lose it” rules that govern prior appropriation entitlements created roadblocks to progress in water use efficiency.

Are there any existing water markets?

A water futures market already exists in California.

A lot of the homeowners impacted by repeated flooding are disadvantaged. How can the government help these homeowners without disenfranchising them when converting these properties to buffer zones?

Program leaders would need to work cooperatively with impacted families to find agreeable home sites away from flood zones, especially in close-knit communities where residents have established ties with neighbors and businesses. If desired and when practicable, existing homes could be transported to drier ground. Working with all of the stakeholders in the community to chart a path forward remains the best and most equitable policy.