Time for a new boat

by David Zetland on Aguanomics

Time for a new boat
OM writes from California:

Have you thought or written about public purchase of water flows needed for the environment? We have a new water bond that includes a lot of funds for this sort of thing. It strikes me that it fits with the model of internalizing profits/externalizing costs. If there is not enough water in the river, that is because water users are not complying with permit term, flow requirements or other obligations. So why should the public pick up the cost of buying that water back? Does purchasing water needed for the environment with public funds tend to unjustly enrich those with unclean hands? Would resources be better spent on enforcement?

Here are my thoughts:
First, I would not pay to retire rights that were over-allocated, as the “right to use” (usufruct right) is not the same as the “right of ownership” in California.* I’d revoke overallocations by administrative fiat, as those allocations can not — and will not — be used.
Second, I’d redefine remaining allocations to exclude baseline environmental water flows. The Australians have done this in the Murray Darling Basin. The opposition to cut-outs will increase as their share of total flows rises, so it’s probably best to set them lower and get them in place.

Third, I’d allow existing rights to be rented on an annual basis among all water rights holders as well as new users (environmental organizations, cities, etc.), to improve efficiency without destroying the value — or definition — of rights.
Fourth (rather first), I’d be sure that all water uses — from rivers, groundwater, irrigation canals, etc. — were tracked and perhaps regulated. California has weak or non-existant controls or reporting of uses from groundwater, riparian diversions, and pre-1914 rights. These holes will destroy nearly any system that does not close them.**

Bottom Line: California’s water system is so broken that it needs to be radically reformed. This transition will upset a lot of entitled people, but some of them don’t deserve what they never should have gotten.

* California Constitution, Article 10, Section 2:

It is hereby declared that because of the conditions prevailing in this State the general welfare requires that the water resources of the State be put to beneficial use to the fullest extent of which they are capable, and that the waste or unreasonable use or unreasonable method of use of water be prevented, and that the conservation of such waters is to be exercised with a view to the reasonable and beneficial use thereof in the interest of the people and for the public welfare.

Many current water users will claim that their use (e.g., almond irrigation) is “reasonable” and I’m inclined to agree, but that use must be “in the interest of the people and for the public welfare,” which may exclude, e.g., irrigation of almonds for export. Put differently, the government has allowed uses and can disallow them — as it did, very famously, in the case of Mono Lake.
** After I wrote this, California’s Legislature passed a law requiring local groundwater districts to have “management plans” in place by 2020 (failure means the State will impose its own plan). This action, welcome as it is, does not seem to specify a target or penalty for failing to meet a target, i.e., it doesn’t promise an improvement in groundwater conditions… assuming there’s any groundwater left after another five years of unregulated pumping.