A University of Nevada, Reno College of Business professor recently delivered a keynote presentation at the Nevada Water Resources Association (NWRA) Annual Conference, where he shared research-based insights on how water markets are shaping Nevada’s water future.

Michael Taylor, associate professor of economics at the College of Business, outlined three key takeaways for policymakers and water managers facing Nevada’s increasingly complex water future.

First, he emphasized the need to carefully weigh the benefits of reform against the institutional costs of change.

“Policymakers must weigh whether the economic gains from water market reforms justify the costs of changing allocation institutions,” Taylor said, noting that the issue is particularly relevant in areas such as Diamond Valley, the Walker River and other Nevada basins.

Second, Taylor explained that in some basins, reform is no longer optional.

“When external pressures necessitate reform, as in the Humboldt River Basin, expanding market mechanisms can achieve management goals at lower economic cost,” he said.

His third takeaway focused on the role of markets even in the absence of formal policy changes.

“Even without formal reforms, market forces will shape long-run water use,” Taylor said, adding that this dynamic is especially important when evaluating large-scale infrastructure proposals such as the proposed pipeline to deliver water from Lincoln, Nye and White Pine counties to the Las Vegas metropolitan area.

Taylor also highlighted applied research conducted in collaboration with the Nevada Division of Water Resources, much of which has supported the agency’s efforts to manage groundwater and surface water conjunctively in the Humboldt River Basin.

“In collaboration with DWR, I have helped develop an approach that allows groundwater pumpers to use existing surface water rights to offset pumping-induced reductions in streamflow,”  Taylor said. “My analysis shows that this market-based approach can address groundwater capture at a substantially lower cost to the regional economy than a strict application of current water law.”

According to Taylor, the work is closely tied to real-world decision-making and involves collaboration with a broad range of stakeholders across Nevada, including representatives from agriculture, mining, municipal water suppliers and environmental organizations.

As water challenges intensify across the state, Taylor emphasized the importance of research-driven insights to guide policy discussions.

“Water management challenges in Nevada are becoming increasingly complex and demand careful evaluation of trade-offs among competing uses,” he said. “Meaningful progress requires ongoing engagement by researchers and stakeholders to develop workable solutions.”

Through his keynote at the NWRA Annual Conference, Taylor highlighted how economic research can help inform balanced, practical approaches to managing Nevada’s limited water resources.