The Evolution of Metropolitan’s Agricultural Partnerships

Metropolitan Water District of Southern California (MWD) | August 5th, 2022

The futures market for water rights trading in California: Analyzing the emergence of a controversial experiment

Environmental Challenges (Elsevier) | March 29th, 2025

This paper presents a qualitative case study of the world's first water futures contract in California, a market that enables hedgers and speculators to bet on water pric

This paper presents a qualitative case study of the world's first water futures contract in California, a market that enables hedgers and speculators to bet on water prices. It is attempted to explain which factors shaped the emergence of the unique market by applying the Political Process Inherent Dynamics Approach (PIDA), an analytical framework from the field of environmental policy analysis. In addition, the topics of heated debate that have surrounded the new market are summarized and contextualized. To obtain the relevant information, expert interviews, complemented by online sources, were subjected to a Qualitative Content Analysis. It is concluded that the launch of the contract is an extreme case of private business actors shaping water governance, made possible by a longstanding market philosophy in the US, that gives leeway for actors of financialization to create facts. In the political-administrative realm, a lack of accountability and will to interfere seems to prevail. However, nongovernmental organizations (NGOs) and other actors have led efforts to abolish the market, criticizing water futures in ways that resonate with broader debates about privatization and food futures.

The Role of Water Transfers in Meeting California's Water Needs

Legislative Analyst's Office (LAO) | September 9th, 2008

If water transfers are to help the state meet its water needs, we think that the Legislature should address a number of issues, including impediments to transfers and sta

If water transfers are to help the state meet its water needs, we think that the Legislature should address a number of issues, including impediments to transfers and stakeholder concerns about potential negative impacts of transfers on "third parties." Statutory policy on water transfers should be clarified and made more consistent.

Trading Sustainably: Critical Considerations for Local Groundwater Markets Under the Sustainable Groundwater Management Act

University of California, Berkeley (UC Berkeley) | June 1st, 2017

The Sustainable Groundwater Management Act (SGMA), passed in 2014, is changing the way California manages its groundwater resources. SGMA calls for the creation of loc

The Sustainable Groundwater Management Act (SGMA), passed in 2014, is changing the way California manages its groundwater resources. SGMA calls for the creation of local Groundwater Sustainability Agencies (GSAs) and tasks them with developing and implementing Groundwater Sustainability Plans (GSPs) to achieve sustainable groundwater management. SGMA offers GSAs a broad palette of tools to choose from and significant flexibility to tailor their management activities to local conditions and needs. Because it allows GSAs to assign groundwater extraction allocations to pumpers and to authorize transfers of these allocations under certain circumstances, SGMA potentially opens the door for the development of local groundwater markets. In such a market, a willing seller might trade a portion of their groundwater extraction allocation to a willing buyer, allowing the buyer to pump groundwater in the seller’s stead.

Trends and environmental impacts of virtual water trade

Nature Portfolio (Springer Nature) | November 5th, 2024

Urban Water Revolution: Sustainable Water Futures for California Cities

American Society of Civil Engineers (ASCE) | July 15th, 2020

California has consistently altered natural water resources to provide water for its growing population and to support the fifth largest economy in the world. However, th

California has consistently altered natural water resources to provide water for its growing population and to support the fifth largest economy in the world. However, the old ways of coping with the California’s urban water needs—overdraft of groundwater, stream depletion, and greater imports—will no longer meet the demands of the 21st century. We examine California’s water history and present several promising solutions to the challenge of urban water security: a combination of conservation and efficiency, desalination, stormwater capture, water re-use, and water banking. These options for urban water, including direct potable reuse, will help dry cities in California and elsewhere achieve more sustainable and diversified water supply portfolios. Pilot and demonstration-scale projects, along with innovations in systems management and new regulations, point the way toward more resilient water supplies for dry cities. Movement toward regional collaboration, implementation of new technologies, and new regulatory regimes are helping to realize a one-water vision. Different cities will develop their own water supply portfolio options appropriate for their geography, values, and urban form on a path toward meeting the urban water challenges of this century.

Water Partnerships between Cities and Farms in Southern California and the San Joaquin Valley

Public Policy Institute of California (PPIC) | October 29th, 2020

The San Joaquin Valley and urban Southern California are worlds apart in many ways. Yet each face growing water challenges and a shared interest in ensuring reliable, aff

The San Joaquin Valley and urban Southern California are worlds apart in many ways. Yet each face growing water challenges and a shared interest in ensuring reliable, affordable water supplies to safeguard their people and economies. Both regions’ water futures could be more secure if they take advantage of shared water infrastructure to jointly develop and manage some water supplies.  Increasing climate volatility is heightening concerns about droughts of the future. And two major shifts in California’s water landscape have generated new opportunities for collaboration between urban and agricultural interests. For urban areas, significant declines in water demand have reduced pressure on supplies during normal and wet years for many agencies, making reliability for future droughts the primary concern. For the overdrafted San Joaquin Valley, the requirement to manage groundwater sustainably has heightened interest in expanding water supplies and underground storage.  Partnerships between Southern California cities and San Joaquin Valley farms could help alleviate groundwater overdraft in the valley while building drought resilience in Southern California. More flexible supplies can help agencies adapt to changing conditions. By coordinating the location of infrastructure investments, agencies can use partnerships to bring the water where and when it is most needed, at least cost.  This report explores a variety of solutions that could benefit both regions. For the San Joaquin Valley, we look for ways to augment water supplies to ease the transition to groundwater sustainability, while for Southern California we explore options that would increase cities’ ability to deal effectively with extended droughts. By diversifying water supplies, building connections to share water more flexibly, and preparing for the extreme events to come, such partnerships would support Governor Newsom’s Water Resilience Portfolio, and pave the way for a shared effort to make the state’s water system more resilient to a changing climate. 

Water transfers (Resource Management Strategy)

California Department of Water Resources (DWR) | July 29th, 2016

The California Water Code (CWC) defines a water transfer as a temporary or long-term change in the point of diversion, place of use, or purpose of use due to a transfer,

The California Water Code (CWC) defines a water transfer as a temporary or long-term change in the point of diversion, place of use, or purpose of use due to a transfer, sale, lease, or exchange of water or water rights. Temporary water transfers have a duration of one year or less (CWC Section 1725). Long-term water transfers have a duration of more than one year (CWC Section 1728). Transfers can be between water districts that are neighboring or across the state, provided there is a means to convey or store the water. A water transfer can be a temporary or permanent sale of water or a water right by the water right holder, a lease of the right to use water from the water right holder, or a sale or lease of a contractual right to water supply. Water transfers can also take the form of long-term contracts for the purpose of improving long-term supply reliability.

Water Transfers in Water Resource Systems

American Society of Civil Engineers (ASCE) | March 1st, 1995

Water transfers are a common component of many regional water systems and are being increasingly considered for meeting growing water demands and for managing the impacts

Water transfers are a common component of many regional water systems and are being increasingly considered for meeting growing water demands and for managing the impacts of drought.  Water transfers can take many forms and can serve a number of different purposes in the planning and operation of water resource systems. However, to be successful, water transfers must be carefully integrated with traditional water supply augmentation and demand management measures.  This integration requires increased cooperation among different water use sectors and resolution of numerous technical and institutional issues, including impacts to third parties.  This paper identifies the many forms that water transfers can take, some of the benefits they can generate, and the difficulties and constraints which must be overcome in their implementation.

Who Should Be Allowed to Sell Water in California? Third-Party Issues and the Water Market

Public Policy Institute of California (PPIC) | June 13th, 2003

Although significant water trading has occurred in California since the drought of the early 1990s, many localities have restricted water transfers because of the perceiv

Although significant water trading has occurred in California since the drought of the early 1990s, many localities have restricted water transfers because of the perceived harm to other users and the local economy. In Who Should Be Allowed to Sell Water in California? Third-Party Issues and the Water Market, Ellen Hanak examines water transfers in California, local resistance to them, and various approaches to resolving water disputes. Drawing on a new database of water transfers as well as interviews with state, county, and water district officials, the report calls for water management at the local level that balances the interests of other residents and the potential gains from transfers.