Forty years ago, motivated by dropping water tables and land subsidence, Arizona lawmakers enacted the 1980 Groundwater Management Act. At the time, the Act was hailed as the most far-reaching state legislation to control rampant groundwater depletion ever enacted. Despite the rhetoric, however, the Act never dealt with Arizona’s groundwater usage in a comprehensive manner and today its shortcomings are starkly apparent. The Act addressed the groundwater crisis only in the State’s most populous areas, leaving the remainder of the State to the unregulated Wild West of groundwater use, a veritable “tragedy of the commons” perpetuated by the lax “reasonable use” doctrine. Furthermore, it left untouched in the law the hydrologic fallacy that ground and surface waters are distinct. The result is as predictable as it is tragic; plunging water tables in many of Arizona’s rural areas are forcing homeowners and businesses to either drill deeper wells or relocate. Riparian areas are being lost, and with them, Arizona’s unique desert ecosystems. This Article argues that Arizona lawmakers must return to the drafting table to complete the work they started in 1980—the creation of a groundwater management code, based in science, that will ensure the equitable and sustainable use of groundwater across the entire State for current and future generations. It suggests two options for such future legislation, one embodying a property rights approach and the other a government regulation approach. Under the former, legislation would establish the framework for a groundwater market according to which existing and future groundwater users could purchase and trade the right to pump groundwater. Under the latter, Arizona could balance the powerful state and local interests in groundwater management through an expanded Act that follows “cooperative localism,” a term coined in this Article to refer to a division of governing authority between state and local government in which local governments plan and implement state-imposed groundwater protection requirements. Cooperative localism would provide for local planning in pursuit of a statewide safe yield goal implemented on a basin-by-basin basis. Today’s groundwater crisis comes at a time when scientists warn that climate change will likely exacerbate current drought conditions, thus placing additional pressure on Arizona’s declining groundwater resources. It also comes at a time when Arizona can expect future reductions in Colorado River supplies as a result of the recently enacted multistate Drought Contingency Plan.

Business entities of several varieties play an invaluable role in the maintenance, growth, and preservation of the socioeconomic framework, both in the United States and worldwide. Generally, corporations do not assume a duty to act in a socially proactive manner; after all, business entities typically exist to maximize profits for their constituent shareholders. The social obligations of corporations have been shifting, however, as increasingly stringent laws, regulations, and social norms require that entities mitigate the environmental damage they do in order to survive. Much of the public's attention focuses on the regulation of emitting entities especially where that regulation applies to minimizing large-scale contributions to the "greenhouse effect," which occurs when increased quantities of heat-trapping gases enter the atmosphere as a direct byproduct of industrialization. The natural environment is humanity's most valuable resource. Sovereign nations, including the United States, must take steps to preserve the environment's integrity or else risk irreversible damage to global socioeconomic stability and perhaps even the existence of life itself. Statutes and regulations represent some of the best mechanisms available for ensuring such preservation. A delicate balancing act comes into play during the formation of environmental regulations, however, as legislators and regulators must take care to avoid the excessive restriction of economic activity. Economic prosperity is needed to ensure liberty and social mobility for individuals on a global scale, and excessive regulation risks damaging the livelihood of those whose prosperity depends on a healthy global economy. Legislators and regulators are thus charged with protecting the environment from damage while simultaneously avoiding the imposition of excessive regulatory burdens upon emitting entities. The challenge of strengthening environmental protections without imposing excessive burdens upon emitting entities is referred to herein as the "regulatory-economic balance." The totality of the regulatory-economic balance is far too immense to be condensed into a brief Comment, especially after considering the number of moving parts and the expanse of underlying policy implications. However, the United States Environmental Protection Agency's regulations on Greenhouse Gas Reporting Requirements offer a foundational regulatory scheme through which the regulatory-economic balance may be analyzed. 3 The EPA's revision of reporting requirements under Subpart A of Title 40 of the Code of Federal Regulations (C.F.R.), Section 98 may provide an avenue to fortify environmental protections while simultaneously minimizing the burdens placed upon emitting entities relative to those protections.