Permit Transfers Hold Water For Georgia

By Benita Dodd

It may seem that Georgia’s water problems are Atlanta’s alone, but the state’s economic engine is hardly alone in its concerns about water quality or quantity.  

Rincon, in Effingham County, is withdrawing more groundwater than allotted, but the state prohibits it getting more water from the Floridan Aquifer while a scientific study is under way.

The Environmental Protection Division wants Rincon to tie into the county’s surface water pipeline. City officials cite concerns about water quality and expense and have even considered borrowing water withdrawal permits. Rincon is suing the EPD and being sued by stymied developers.

Tybee, approaching its groundwater allocation, has another 100 condominiums permitted. The city is offering to buy back irrigation meters from users who quit irrigating with drinking water and drill irrigation wells instead. Irrigation wells pumping less than 100,000 gallons per day don’t need an EPD permit.

In Baker County, the uncertainty over water availability was instrumental in Duke Energy’s decision to withdraw an application to build a power plant. It would have doubled the county’s tax base, according to commission Chairman Lucius Adkins.

In Northeast Georgia, Baldwin loses half the water it buys before the water reaches customers. The city is just one of 54,000 water providers across the country experiencing high amounts of water loss, and the loss is typical for North Georgia, according to a leak-detection specialist. Well-maintained systems like Cobb County and Marietta have 10-12 percent of water unaccounted for.

Tybee, which is encouraging users to opt for wells without state EPD permits, is on a list of about 100 cities and counties that have passed resolutions opposing water permit transfers – the ability for a permit holder to sell his right to withdraw water in areas where withdrawal permits are unavailable. Effingham County, whose piped water Rincon anticipates will cost up to 10 times the aquifer withdrawals, is also on that list. So is Habersham County, home to Baldwin, where half the public water system’s water is unaccounted for.

Agriculture, a vital aspect of Georgia’s economy, is the largest single user of water and the least monitored. More than 21,000 water withdrawal permits are held by agriculture, each representing an irrigation pump with the capacity to withdraw at least 100,000 gallons per day. The permits, grandfathered under varying versions of the law, stay with the land, with no “use-it-or-lose-it” provision. There is little incentive for farmers to use the free water more efficiently and no incentive to return permits to the EPD because of the value they add to farmland, the moratorium on permits and the water uncertainties in South Georgia.

These examples reveal the holes in current water policy. Georgia needs a sustainable plan that reflects the public interest, accommodating varying demands and challenges and providing an incentive for more efficient use of water. The Foundation has long promoted water permit transfers as a necessary component of that plan.

The acrimonious allegations, confusion and misunderstanding surrounding the process during the 2003 legislative session prompted Foundation staff members to develop a primer, “Water Permit Transfers: Bridging the Misinformation Gap.” The primer, available at, proposes an approach that includes the ongoing oversight of the state EPD to protect the regulated riparian system and the environment, and at no cost to taxpayers.

We argue that water permit transfers could diversify economic opportunity in agriculture-heavy South Georgia; redirect growth from North Georgia, location of the state’s fragile headwaters; make water available to more users in fully allocated areas – and do all that while promoting greater water efficiency and environmental protections by enhancing in-stream flows. 

In the Foundation’s scenario, a farmer who saves water (by changing his watering pattern, for example) could sell or lease his right to use that excess to an industry or farmer unable to obtain a water withdrawal permit. The EPD is notified and publicizes the transaction, transparency that allows for concerns to be considered and for competitive bidding.

The EPD’s determination of downstream or down-gradient environmental impact is key to approval. The process should also allow for a “conservation offset:” a certain amount of water set aside in the transaction to remain in-stream as an environmental buffer.

Concerns about speculators hoarding water are easily dismissed with a use-it-or-lose-it deadline; concerns about ecological harm can further be reduced by basing transfers upon the state’s 52 watersheds instead of political lines. That would allay fears of water flowing uphill to Atlanta, since the Flint River, with headwaters near Atlanta’s airport, comprises three watersheds.

Market-oriented policies involving environmental resources are not new. The federal Environmental Protection Agency has implemented trading for water quality and emissions. Thomas J. Graff of the Environmental Defense Fund supports the approach, too.

“[I]t is our view that needed water reallocations can best be accomplished through the development of water markets,” Graff wrote in an article co-authored by colleague David Yardas.

“Such markets would provide regionally appropriate opportunities for those who find themselves ‘water short’ to approach those who, by law, inheritance, or otherwise, find themselves ‘water rich,’ to work out mutually acceptable terms for the transfer of part or all of the associated water supply. In this way, new and changing water needs could be met without further impact to the aquatic resources at issue.”

Gary Black, president of the Georgia Agribusiness Council, believes change is inevitable: “Such changes can occur in a regulated environment, which recognizes and allows for these uses to change – or the government can confiscate permits. We don’t believe the latter is a viable option. The question remains… what do you do when the state will no longer issue a water withdrawal permit in a given area?”

Benita M. Dodd is vice president of the Georgia Public Policy Foundation and leads its Environmental Initiative. The Foundation is an independent think tank that proposes practical, market-oriented approaches to public policy to improve the lives of Georgians. Nothing written here is to be construed as necessarily reflecting the views of the Georgia Public Policy Foundation or as an attempt to aid or hinder the passage of any bill before the U.S. Congress or the Georgia Legislature.

© Georgia Public Policy Foundation (January 30, 2004). Permission to reprint in whole or in part is hereby granted, provided the author and her affiliations are cited.