This article first ran in the San Francisco Chronicle on March 20, 2015.
By Jay Lund and Peter Moyle
When labor is scarce, people move to better jobs with higher wages. When land is scarce, landowners are offered higher prices for its use. When drought makes water scarcer in California, those with senior water rights are offered more money to move their water to other users.
But fish are asked to give up their water for free.
California would do better if it cultivated a more civilized ethic where there is no free water during a drought. Perhaps we should treat environmental uses of water more as a matter of economics, to help the environment and the economy.
This year and last year, the State Water Resources Control Board relaxed environmental protections for fish to export more water from the Sacramento-San Joaquin Delta for farms and cities. Reducing fish flows without compensation during a drought has some attractions, but overall seems like a risky idea.
On the plus side, it’s a principle that, during a drought, everyone should get less water, including the environment. The reality is that some small reductions in environmental flows may not harm fish, but would have great economic value to cities and farms. Variability in flows is natural for many of California’s native ecosystems. Droughts might provide useful variability, if properly managed.
However, reductions in environmental flows during drought usually have costs, including:
Potential direct harm to fish in the short term, and in the longer term, severely reducing native fish populations and sometimes making it easier for invasive species to become established.
Risks that additional native fish or other aquatic species will become legally listed as threatened or endangered, which can reduce long-term water withdrawals for economic water uses.
Encouraging water fights, rather than using negotiation or markets to rebalance and reallocate water. This is uncivilized and encourages greater conflicts over water.
The amount of environmental flows that cities and farms will gain this year is relatively small, about 40,000 acre-feet of water. But in a drought year, 40,000 acre-feet of water south of the delta is probably worth more than $1,000 an acre-foot or about $40 million. While this is a tiny proportion of agricultural production or urban economies, those next in line for this water will find it worth fighting for.
The high value of small amounts of water during droughts is a harsh challenge for science, environmental advocates and those interested in thoughtful water policy. How can we make this a more civilized choice?
Let the fish sell their water.
That is, convert some drought portion of environmental flows to a marketable water quantity, owned by the fish agencies. This would allow environmental water uses to be fairly compensated by those gaining from reductions in environmental flows, just as other high-priority water rights holders are compensated for their reductions in water use during a drought. This seems more fair, gives incentives to water users to behave better, and encourages conflicts to be speedily negotiated instead of indefinitely litigated. 
Prices could be set by the fair market value of the water made available, by having a regulatory agency fix or negotiate a fee, or by assessing the cost of compensatory environmental actions such as buying water for environmental purposes elsewhere in the state or creating a reserve fund to aid native fish after the drought.
Creating such an environmental water market during a drought would help limit the reductions in environmental river flows, while ensuring that those negatively impacted by such reductions receive some compensation.
For California, even partial markets for environmental water would satisfy the state’s stated “co-equal” environmental and economic goals for water management.
Overall, fish have suffered at least as much as humans during the drought, certainly in terms of habitat loss.
We can’t equalize the burdens of severe drought across all water uses, but we can share the pain more fairly in ways that help fish and other species that depend on our rivers for their survival.
Jay Lund is director of the UC Davis Center for Watershed Sciences and a professor of civil and environmental engineering. Peter Moyle, the Center’s associate director, is a professor of fish biology.
 Reductions in environmental flows could be compensated through existing legal mechanisms such as negotiated agreements with water users; fixed penalties for violating flow and water quality standards; or Endangered Species Act regulatory actions — adding environmental market provisions to biological opinions, incidental take permits or habitat conservation plans (Lund et al, Feb. 2014).
Lund, J. and P. Moyle. “Is shorting fish of water during drought good for water users?” California WaterBlog. June 3, 2014
Lund, J., E. Hanak, B. Thompson, B. Gray, J. Mount and K. Jessoe (2014), “Why give away fish flows for free during a drought?” California WaterBlog. Feb. 11, 2014
Manfree, A. “Drought Journal: Search for Sierra fish goes from bad to worse.” California WaterBlog. Aug. 18, 2014
Moyle, P. “Saving California’s salmon during a severe drought.” California WaterBlog. Feb. 17, 2014.