Lake Mead, on the Colorado River, is the largest reservoir in the United States, but users are consuming more water than flows down the river in an average year, which threatens the water supply for agriculture and households.

To solve this imbalance scientists are proposing a Cap and Trade system of interstate water trading. The proposal, published in Journal of the American Water Resources Association (JAWRA), builds on the success of such an initiative in Australia.

The research was inspired by a first-year university assignment by Noelani (Olenka) Forde, who was studying at Quest University Canada.

Two years later Forde's assignment has led to the newly published research paper, co-authored with her then Professor Dr Rich Wildman, now a postdoctoral researcher and an environmental fellow at the Harvard University Center for the Environment.

The paper evaluates policy regarding the management of the Colorado River Basin and explores the viability of interstate water trading as a way to add flexibility into the system during times of water shortage.

Forde and Wildman examined Australia's successful Murray-Darling Basin interstate water trading system, to demonstrate the concept's viability for the U.S. The paper explores what features of the Colorado River Basin law and culture might act as barriers to creating a system similar to that in Australia.

The U.S. Bureau of Reclamation is currently seeking to present policymakers with options for restoring the Colorado's imbalance. Forde and Wildman's paper has been published in response to the Bureau's solicitation for comments and ideas from the public for how to solve the problem.

Forde's original first-year assignment calculated the water balance of Lake Mead and asked what should be done if the users of the Colorado River face the prospect of running out of water in the next two decades.

"Olenka proposed a Cap and Trade system such as that being applied to CO2 emissions," said Wildman. "I had never heard of anything like this proposed for the Colorado River Basin, so I suggested we write a paper to share it with a broader audience."