In the Pacific Northwest, the fate of wild salmon is intimately tied to the lands and waters that sustain them. Their journey spans hundreds of miles—from mountain streams, through forests and farmlands, and past bustling cities—eventually reaching the ocean and returning years later to travel upstream to spawn. Along the way, each bend in the river presents its own challenges and opportunities.
Yet salmon and other fish species in the Pacific Northwest face a formidable challenge: competition for a finite water supply. As demands on western rivers intensify, innovative approaches are needed to ensure adequate streamflow for fish and wildlife. While traditional methods of securing water for environmental purposes, such as minimum flow standards, can play a role, they often fall short of addressing the dynamic needs of aquatic ecosystems.
In recent decades, a more flexible and adaptive tool has emerged: environmental water markets. These markets allow farmers and other water rights holders to be compensated to keep water instream, restoring flows when fish need it most. It’s a conservation strategy rooted in the recognition that water is a valuable resource, and water rights holders should be fairly compensated for leaving water instream. From Idaho’s mountain headwaters to Washington’s coastal riverbeds, creative partnerships between farmers, conservationists, and local communities are proving that the flow of the future may be market driven.
Buy That Fish a Drink
In the American West, water rights are largely governed by the prior appropriation doctrine, a system rooted in the region’s arid history. This doctrine operates on a simple but rigid principle: “first in time, first in right.” In other words, the earliest users of a water source have priority access, even in times of drought, as long as they put that water to a “beneficial use” such as irrigation or municipal supply. If water goes unused, the right can be forfeited or deemed abandoned.
Historically, leaving water in streams to support fish and wildlife was not recognized as a beneficial use. Over the past few decades, however, states across the West have developed new policies to allow water rights to be leased or transferred to instream purposes. These legal innovations have paved the way for environmental water markets, through which conservation groups can buy or lease water rights to boost streamflows at crucial times.
In the Pacific Northwest, such markets are unlocking creative opportunities to protect salmon, steelhead, and other aquatic species, enhancing habitats from high-mountain tributaries to coastal riverbeds. By compensating users for leaving water in the river, these approaches align economic incentives with ecological needs, helping sustain the lifeblood of the region’s iconic waterways.
From Farms to Fish
UPPER TETON RIVER BASIN, IDAHO—In the high elevations of eastern Idaho, the Teton River’s headwaters are the lifeblood for farms, local communities, and the fish and wildlife that call the valley home.
For generations, farmers in Teton Valley practiced flood irrigation, channeling water from streams and ditches to spread across their fields. This method, while seemingly inefficient, had an unintended benefit: As flood-irrigated water slowly seeped into the ground, it replenished the valley’s aquifer, feeding the Teton River with a steady supply of cool water during the dry summer months.
But times have changed. In recent decades, farmers have switched to more efficient irrigation systems, like sprinklers, that deliver water directly to plants’ roots, minimizing water loss. This shift, however, has come at a cost: Less water seeps into the ground, leading to lower aquifer levels and, ultimately, diminished streamflows to the river.
This shift in irrigation practices has had a ripple effect on the Teton River’s aquatic ecosystem, particularly for native Yellowstone cutthroat trout, which depend on cold, oxygen-rich waters. Reduced flows have shrunk their habitat, making the trout more vulnerable to predators, disease, and rising temperatures.
Recognizing the interconnectedness of farming and fish, Friends of the Teton River, a local conservation organization, has partnered with local farmers, paying them to flood irrigate their fields during the spring, when water from snowmelt is plentiful. By doing so, farmers help replenish the aquifer, slowing down water and keeping river flows more consistent throughout the drier months.
“We need to sink that water up here in the highlands, as close to the mountains as we can,” says Wyatt Penfold, a Teton Valley farmer. “Disperse it out, slow it down, and then it’s there for everybody, even as far as Washington and the salmon.”
Building on the success of an initial pilot project, local partners are now developing a market to encourage more aquifer recharge in the valley. By bringing together conservation groups and others who benefit from higher streamflows, this emerging market could be a model for other headwater basins, offering a win-win approach for both farms and fish.
Trading Water, Saving Salmon
BEND, ORE.—Flowing through central Oregon, the Deschutes River is renowned for its stunning beauty and world-class fisheries. Yet water diversions for agriculture and other uses have led to streamflow declines, particularly during the crucial summer months when native fish species like redband trout and steelhead are most vulnerable.
To tackle these challenges, conservation groups in the region have developed a suite of water market tools that allow farmers to temporarily or permanently lease water rights back to the river. At the heart of these efforts is the Deschutes River Conservancy, a nonprofit group that has been restoring flows and enhancing water quality since 1996. The conservancy has united a diverse coalition—including local farmers, environmental advocates, and tribes—focused on finding practical ways to restore streamflows and improve water quality.
The conservancy’s approach includes a mix of flexible water leasing options. Temporary instream leases allow water rights holders to dedicate their water to the river for a season or two, while forbearance agreements compensate farmers who voluntarily refrain from diverting water during peak stress periods. These short-term solutions are complemented by permanent transfers, where water rights are retired from agricultural use and legally protected for instream flows.
This layered toolkit provides a wide range of options. Genevieve Huber, the conservancy’s senior program manager, credits the group’s success to patience, many meetings, building trust, and “lots of coffee.” That perseverance has paid off: Over the past two decades, the conservancy and its partners have restored over 300 cubic feet per second of flow to the basin’s rivers and streams.
These increased summer flows provide cooler, more oxygenated water, which are vital for the survival of young salmon and steelhead. The Deschutes River Conservancy’s approach serves as a model for how water markets can bridge the gap between agricultural needs and ecological health, highlighting a path forward for regions grappling with similar challenges of water scarcity and conservation.
Finding Flows for Fish Survival
ORE. AND WASH.—Across Oregon and Washington, conservation groups are using innovative market tools to support salmon populations facing pressure from low flows, rising temperatures, and competing demands.
The Freshwater Trust, based in Oregon, takes a focused approach to water conservation in the region. Using advanced analytics and satellite monitoring, the trust identifies when and where additional streamflows can yield the most benefit for fish and aquatic habitats. Their data-driven strategy includes real-time information and predictive modeling to ensure that every action has the maximum ecological return. This precision allows them to identify critical areas within the river system that suffer from low flows and high temperatures.
Since 1993, the Freshwater Trust has partnered with more than 200 landowners across Oregon to implement a diverse set of solutions, including short-term leases, permanent transfers, split-season leases, and a variety of other flow restoration projects. Collectively, these efforts have restored between 98 and 163 million gallons per minute each irrigation season, significantly boosting flows during critical months for salmon and steelhead.
Meanwhile, the Washington Water Trust is using creative leasing mechanisms to enhance streamflows, particularly during drought years. One standout example is their reverse auction program on the Dungeness River in northwestern Washington. During critically dry seasons, the trust invites irrigators to submit bids on how much compensation they’d need to leave portions of their land unwatered for the season. Bids are evaluated based on the seniority of water rights, proximity to key habitat areas, and the cost-effectiveness of the flow restoration.
The results are encouraging. The water trust has helped boost streamflows in the Dungeness River in drought years, providing critical support for salmon and steelhead during their migration and spawning seasons. These increased flows have improved habitat conditions, helping to stabilize fish populations and support the river’s overall ecosystem.
Together, these organizations demonstrate how flexible, market-based strategies can adapt to the complex and variable needs of water users. By aligning incentives, The Freshwater Trust and Washington Water Trust are making a tangible difference in restoring flows and creating a more resilient future for both fish and people.
Streams of Change
COLUMBIA RIVER BASIN, ORE. AND WASH.—As the Columbia River winds its way toward the Pacific Ocean, it plays a vital role in the life cycle of salmon. These waters serve as migration corridors and nursery grounds for young fish preparing for life in the ocean, as well as pathways for adult salmon traveling upstream to spawn. Decades of habitat degradation, altered flows, and development have made this journey increasingly treacherous.
For decades, the nonprofit Wild Salmon Center has worked to protect and enhance riparian zones and floodplains throughout key watersheds in the Columbia Basin. Their projects aim to reconnect wetlands, remove barriers to fish passage, and restore tidal estuaries. By doing so, the group provides salmon with areas to feed and grow, helping bolster their chances of survival.
Such efforts extend beyond habitat restoration. The organization has also been a leader in modernizing water laws to enable innovative, market-based solutions. One recent notable success is the advancement of Oregon’s split-season leasing program, which allows irrigators to allocate water for crops in early summer and leave it instream later in the season, when flows are most needed for fish.
These programs have the potential to benefit both farmers and fish. Take, for example, Tony Malmberg, a rancher from eastern Oregon who draws water from Catherine Creek—a critical nursery for spring Chinook salmon. In early summer, Malmberg’s alfalfa thrives with minimal irrigation, but later in the season, he knows the creek needs water to protect salmon. Through a split-season lease with the Freshwater Trust, Malmberg is compensated for voluntarily leaving late-summer water in the creek rather than using it for a final, low-yield hay crop. “The hot season is when the water’s highest value is staying instream for salmon and river function,” Malmberg recently told the Oregon Legislature.
In 2023, the program was made permanent, marking a win for both farmers and fish. By driving these reforms, groups like the Wild Salmon Center, Freshwater Trust, and other creative conservationists are laying the foundation for water market strategies that balance agricultural demands with the needs of the region’s iconic salmon populations.
The Flow Forward
The Pacific Northwest’s rivers and the salmon that call them home face significant challenges, but innovative water market solutions offer a promising path forward. From the high mountain headwaters to the tidal estuaries, creative collaborations are proving that conservation and economic interests don’t have to be at odds. By harnessing the power of markets, the region is advancing new strategies to cooperatively resolve competing demands over scarce water supplies. If these efforts continue to expand, the flow of the future may truly be one that benefits people, wildlife, and communities.
