Efficient Water Use in California: Water Rights, Water Districts, and Water Transfers

Rand Corporation (Rand) | November 13th, 1978

Estuary News, April 1998

San Francisco Estuary Partnership (SFEP) | April 15th, 1998

Estuary News, December 1995

San Francisco Estuary Partnership (SFEP) | December 15th, 1995

Estuary News, June 1998

San Francisco Estuary Partnership (SFEP) | June 15th, 1998

Goal-based water trading expands and diversifies supplies for enhanced resilience

Nature Portfolio (Springer Nature) | February 11th, 2019

In response to rising water scarcity concerns around the world, water utilities are expanding and diversifying their water supply portfolios, including attempting to valu

In response to rising water scarcity concerns around the world, water utilities are expanding and diversifying their water supply portfolios, including attempting to value and reuse every drop throughout the water cycle. This transition is creating new hybrid infrastructure systems that combine centralized and decentralized sources at various scales. To help strategize and manage these emerging hybrid systems, we introduce a flexible goal-based water-trading framework using a combination of regulatory and market incentives. We apply this framework in a simulation of the San Francisco Bay Area, and test the effects of policy parameters, local preferences and collaboration between utilities. Results show that the option of engaging in an open trading scheme can lead to a more strategic and holistic path to higher regional resiliency through increased diversity in water portfolios, at lower costs than if utilities were tasked with pursuing goals independently. Highest benefits are observed when utilities cooperate in the exchange of information, which highlights the importance of transparency and trust operating in conjunction with regulatory and market forces.

Goal-based water trading expands and diversifies supplies for enhanced resilience

Nature Portfolio (Springer Nature) | February 11th, 2019

In response to rising water scarcity concerns around the world, water utilities are expanding and diversifying their water supply portfolios, including attempting to valu

In response to rising water scarcity concerns around the world, water utilities are expanding and diversifying their water supply portfolios, including attempting to value and reuse every drop throughout the water cycle. This transition is creating new hybrid infrastructure systems that combine centralized and decentralized sources at various scales. To help strategize and manage these emerging hybrid systems, we introduce a flexible goal-based water-trading framework using a combination of regulatory and market incentives. We apply this framework in a simulation of the San Francisco Bay Area, and test the effects of policy parameters, local preferences and collaboration between utilities. Results show that the option of engaging in an open trading scheme can lead to a more strategic and holistic path to higher regional resiliency through increased diversity in water portfolios, at lower costs than if utilities were tasked with pursuing goals independently. Highest benefits are observed when utilities cooperate in the exchange of information, which highlights the importance of transparency and trust operating in conjunction with regulatory and market forces.

Groundwater Exchange Pools and Urban Water Supply Sustainability: Modeling Directed and Undirected Networks

American Society of Civil Engineers (ASCE) | August 1st, 2018

Groundwater basins are important sources of water supply and storage for many cities. Groundwater exchange pools offer additional opportunities for utilizing these

Groundwater basins are important sources of water supply and storage for many cities. Groundwater exchange pools offer additional opportunities for utilizing these common pool resources, but their potential role in urban water management is not clear, and modeling such exchanges can be challenging. This paper presents an analysis of the potential for groundwater basin exchange pools to contribute to urban water supply sustainability. Building on an existing model of urban water management in Los Angeles, the analysis assesses the potential for groundwater exchange pools to reduce scarcity and demonstrates a method for modeling two-way (undirected) flows within a directed-network model using linear programming. Results indicate that exchange pools can help alleviate shortages from operational changes (reduced imported water) in Los Angeles, but providing more parties with access to storage improves their effectiveness. Exchange pools could potentially provide 6–12% of total supplies and reduce shortages as much as 86%. Considerations for organizing exchange pools are discussed to explore policy implications for managing common pool resources. The analytical method for embedding undirected network flows within a larger directed-network model has wide applicability for water resource systems analysis applications, including modeling water markets and interbasin transfers. * U.C. Davis hosts a discussion of the content by the authors at California Water Blog. 

Groundwater Trading as a Tool for Implementing California’s Sustainable Groundwater Management Act

Environmental Defense Fund (EDF) | December 8th, 2017

Until recently, the State of California lacked comprehensive groundwater management policy. While many basins havebeen adjudicated in court or have adopted voluntary grou

Until recently, the State of California lacked comprehensive groundwater management policy. While many basins havebeen adjudicated in court or have adopted voluntary groundwater management programs following Assembly Bill 3030 and Senate Bill 1938, the vast majority of groundwater use remained unregulated. In 2014, the State Legislature passed the landmark Sustainable Groundwater Management Act (SGMA) in response to wide-ranging consequences of prolonged and unchecked groundwater pumping. While groundwater serves as an important primary and supplemental water supply for many water users, over-pumping can result in negative consequences, six of which are listed as “undesirable results” under SGMA: chronic aquifer overdraft, reduction of groundwater storage, seawater intrusion, degradation of water quality, land subsidence, and depletion of hydrologically connected surface water. SGMA requires local Groundwater Sustainability Agencies (GSAs) to develop and implement Groundwater Sustainability Plans (GSPs) to manage groundwater to avoid such consequences. To meet the requirements of SGMA, GSAs will need to employ a wide range of management tools. This paper focuses on one set of these tools: groundwater trading programs. Trading goes by many different names, including markets, cap and trade, transfers, credit programs, banking, pooling, and exchanges. For the purposes of this paper, we have elected to use the terms “trading” and “trading programs” as the broader categorization of incentive-based management tools. Trading can be executed through a wide range of exchange vehicles, including short- and long-term leases, permanent transfers, and other more advanced or unique arrangements, such as inter-annual water exchanges or dry-year options contracts.

How are Western water districts managing groundwater basins?

California Agriculture (UCANR) | March 13th, 2018

Making the transition from open-access groundwater rights to sustainable groundwater management is a formidable task for newly formed groundwater sustainability age

Making the transition from open-access groundwater rights to sustainable groundwater management is a formidable task for newly formed groundwater sustainability agencies in California. As agencies begin to decide how to make equitable water allocations, how to monitor groundwater use and what mix of supply- and demand-side mechanisms to adopt to satisfy sustainability criteria, the groundwater management strategies in place across other basins in the western United States are worth studying. We surveyed 18 groundwater districts in California and other Western states to identify the management approaches and practices they have instituted. The conclusions we draw suggest a correlative rights framework of water allocation with phase-ins for heavy users; metered pumping; flexible arrangements for trading and carrying over allocations for multiple years; and incentivizing groundwater recharge, including recharge from deep percolation from crops. Rigid formulas for significantly reducing groundwater use in medium- and high-priority basins are likely to have significant negative effects on the regional economy.

Incentive-based Instruments for Freshwater Management

Pacific Institute | December 1st, 2015

This new synthesis report from the Pacific Institute and the Foundation Center provides a review of existing evidence about the use of incentive-based instruments worldwi

This new synthesis report from the Pacific Institute and the Foundation Center provides a review of existing evidence about the use of incentive-based instruments worldwide. Based on case studies, evaluations, journal articles, and white papers, the authors provide a detailed review of three incentive-based instruments: water trading, payment for ecosystem services, and water quality trading. The report and interactive tool highlight the importance of finding the right fit between a community’s water goals and the water management tool(s) it might choose and, perhaps most importantly, characterize the conditions required for their effective implementation. Originally commissioned by The Rockefeller Foundation, all of the results from this project: the synthesis report, interactive tool, and digital collection are freely available for funders, practitioners, and researchers to use, contribute to, and build on in their work.