Wildman and Forde make my last post on this subject look smart, arguing that the supply-demand imbalance on the Colorado River will hit Arizona and Nevada first:
We find that initial shortages will be borne only by the cities of Arizona and Nevada and farms in Arizona whereas the other Basin states have no incentive to reduce consumptive use. Furthermore, the development of a long-term plan is deferred until greater water scarcity exists.
Wildman, Richard A., Jr. and Noelani A. Forde, 2012. Management of Water Shortage in the Colorado River Basin: Evaluating Current Policy and the Viability of Interstate Water Trading. Journal of the American Water Resources Association (JAWRA) 1-12. DOI: 10.1111/j.1752-1688.2012.00665.x
Arizona agreed to take the lowest priority as part of the compromise to build the Central Arizona Project and Nevada accepted shortage sharing for some consideration that escapes me. Arizona has been banking Colorado River water for years and, whether still true I don’t know, but in times past, without the banking it would not be using its full share.
Arizona lawyer Grady Gammage has made the point that agricultural uses are a good thing because they provide a buffer in times of shortage and any damage is economic only.