By Karrigan Börk, Andrew L. Rypel, Sarah Yarnell, Ann Willis, Peter B. Moyle, Josué Medellín-Azuara, Jay Lund, and Robert Lusardi
This week, news emerged of a State Senate plan that would spend upwards of $1.5B to purchase senior water rights from California growers. Under California’s first-in-time, first-in-right water allocation system, senior water rights are filled first, before more junior right holders get their water. The proposal is ostensibly promising. Because of widespread diversions, the aquatic biodiversity of California has been effectively exposed to chronic drought every year, and additional flows may help native species. If purchases can quickly add additional water to rivers in the right places and at the right times, they could benefit ecosystems and endangered species, like Chinook salmon and delta smelt (Moyle et al. 2019, Obester et al. 2020). But it could also easily become a payoff for wealthy water holders with marginal benefit for ecosystems, species, and people. The potential for abuse is particularly troubling when the State is using public funds to buy water, which technically belongs to the people of the state and which the State can already regulate to achieve the same aims. As the old saying goes, the devil is in the details.
This blog highlights some important considerations for decision makers on making effective environmental water right purchases. Below are several questions and themes for a successful water purchasing program.
Does purchasing water rights actually result in more water for ecosystems?
Water rights in California are complicated, and there are many ways a water right purchase could not add appreciable water for ecosystems.
First, many water rights exist only on paper. Some right holders only use a portion of their water right in most years and can only use the full right occasionally, e.g., in very wet years. The state of the data and reporting system in California, especially for senior water rights, makes it challenging to know how much water senior right holders are entitled to and how much water they actually use. And we’re most interested in their consumptive use – the share of water use that becomes available and legal to sell under California law – a quantity that’s even harder to pin down. Established legal and regulatory process exist to dedicate real water rights to the environment. California Water Code Section 1707 provides a mechanism to transfer water rights to instream use, and it, combined with other water code sections on water transfers, does a fair job of making sure that what’s being transferred is real water that will actually increase flows and be protected from other users. Practitioners have already developed practical guidelines for successfully completing the 1707 process. The State must take care to purchase real wet water rights that will result in enforceable instream flows.
Second, water transferred to instream use needs to stay instream. On many rivers, the full flow of the river is already spoken for through existing rights, often many times over; California has allocated up to 1000% of natural surface water flow, with most of these water rights issued in the Sacramento and San Joaquin rivers. If purchased rights are simply retired or not otherwise protected for ecosystem purposes, then holders of other existing water rights can (and often will) simply take the water.
Third, even with an effective mechanism for selecting real water rights and protecting them instream, improvements to monitoring and enforcement are essential to ensure true increases in instream flows. Many diversions are only roughly monitored, such that neither the water user nor the State knows exactly how much water is being used. Many river stretches lack flow gages, so it is difficult to quantify how much water remains instream (though SB 19 is attempting to address the limited network of stream gages in California). And the Water Board lacks adequate resources to enforce existing limits on water rights. The State needs open and reproducible data on diversions and flows, along with a meaningful enforcement threat to ensure any water set aside for environmental benefit remains in the ecosystem.
Finally, these water rights should be “new” water. The Water Board, through its Bay Delta Water Quality Control Plan, is already reducing water rights to protect public trust uses and water quality in the Bay Delta watershed. Water users are negotiating over Voluntary Agreements that could be a part of that Plan. In addition, many growers will need to fallow some fields to meet the mandates of SGMA. Many state and federal laws already circumscribe many water rights to protect instream water uses. Purchases with public funds should be focused on water rights that right holders would otherwise use, so the funds don’t go to pay for water that would have remained instream anyway.
What price should California pay?
The Water Board already has the power to reduce water rights to protect the public trust or to ensure water is used reasonably so as not to destroy public resources, and it has previously exercised that power. They consistently win the resulting lawsuits. California could legally and constitutionally acquire much of this water through other mechanisms, without paying for it. So what exactly is the State paying for here?
In a nutshell, the state would pay for acquiring water quickly, with less political resistance and bureaucratic wrangling, and with less political ill-will and fewer messy and protracted lawsuits. That might make sense; we’re in a climate crisis, and salmon and many of California’s imperiled species don’t have time to waste. But it also means the State should not be paying full price. Water use reductions to support instream flows could occur through other government actions, without a State buyback. A water right that is sometimes curtailed by the state during drought due to endangered species or public trust concerns simply isn’t worth as much as a water right that doesn’t face such regulation. The question is whether water right holders get paid something now for their right or lose some of this water right with no payment after a protracted and expensive fight into a rapidly changing future. Prolonged litigation isn’t as advantageous to current water rights holders as they might seem. Longer and deeper curtailments are possible given the trajectory of California’s climate, meaning the right could become worth even less in the future.
The best approach to pricing might be something like the reverse auctions that The Nature Conservancy is already using to generate migratory bird habitat. Under this approach, water right holders bid to sell their water to the state, and the lowest bids would be more favored, provided that they are real wet rights, as discussed above. This should be coupled with continued pressure from the Water Board to exercise their existing powers to reduce water available to right holders, as they did in the last drought, to generate conditions that would encourage water right holders to sell. And, as we’ll discuss in further detail, another complexity is that it’s not just the cheapest water the state should buy, but the cheapest real water in the right place at the right time for the ecosystem (see point 3 below). Paying full price for water rights could amount to a giveaway to wealthy water right holders, but the reverse auction model can avoid this pitfall.
Paying public money for a publicly-owned and regulated resource will strike some advocates as morally wrong. They might argue it sets a dangerous precedent of buying out those who oppose regulation or treating water rights as a more concrete form of property than they actually are. Legislators should be aware of this philosophical opposition and must carefully craft the purchase program to ensure it provides enough water and ecological benefits to merit the actual and political costs. Because California water already belongs to all Californians, and water rights are subject to continuing State supervision, the State should make sure the funds they dedicate go as far as possible.
What water, when, and where?
What are the precise goals of these purchases? The plan may become the beginnings of an ‘environmental water right’. This would be a positive step. 83% of California’s endemic fish species are declining (Moyle et al. 2011). Furthermore, outmigration survival of juvenile Chinook salmon is strongly linked in a threshold manner to river flows (Michel et al. 2021). Thus additional flows could benefit endangered species, especially if deployed strategically. However, if additional flows are simply gobbled up by other water users downriver or deployed in the wrong places and times, the environmental benefit to people and ecosystems could be nil. Water budget and accounting mechanisms are needed to ensure water is getting where and when it is most needed.
The ecological value of water changes over time; both between seasons and across years. For example, additional flows during drought may yield more ecological return on investment than increased flows in wet years. As one heuristic, average annual runoff in California is 71M acre-feet. Thus a total of 200,000 acre-feet of additional water (the figure provided in the linked article above) is only 0.3% of the average water budget. However, runoff in drought years is much lower. Runoff during the 1977 drought year was only 15M acre-feet; so 200,000 acre-feet is 1.3% of the water budget in such dry years. An accounting or water budget that details when additional flows would be available is needed to accurately track the availability of surplus water.
The value of water for economic uses also changes over time. Opportunity costs of water in the irrigation season of dry years are particularly high. Thus creating a buffer in wet years might be more cost effective than buying out agricultural water use during dry years. A buyback program that considers a baseline amount plus dry-year option may reduce uncertainties for both farming and ecosystem needs.
There are better and worse places for additional water. Adding high quality water is valuable, so water rights in spring-fed streams and groundwater-dominated rivers have high potential for adding higher value than simply additional flow volume due to their unique water quality. Spring-fed and groundwater-dominated streams are more resilient to climate change than strictly surface runoff-dominated streams, and, as a result, they support robust ecosystems.
Adding significant amounts of water to tributaries can make a significant difference, in part because less water is needed to enhance these habitats. Similarly, adding water to coastal rivers, which may be less complicated and easier to monitor, could result in significant gains.
On maintem rivers, giving juvenile salmon and other native fishes better access to productive riparian and floodplain areas could support aquatic biota. Data from a host of studies demonstrate that salmon grow better when exposed to floodplain habitats (e.g., Katz et al. 2017, Holmes et al. 2021), and new studies are testing potential survival benefits for floodplain-reared salmon. But this may not require purchases of water rights; permanent easement arrangements, long-term conservation easements and/or NRCS programs could provide similar benefits at less cost and with more impact than just adding water to maintem rivers. Strategic tributary investments are likely to often provide greater and more sustainable ecosystem value compared to large mainstem purchases, where many other users, especially in the Central Valley, bid up water prices and the marginal proportions of flow improvements are smaller.
Equity and Social Justice.
In 2021, the California Water Board released Resolution No. 2021-0050, titled “Condemning Racism, Xenophobia, Bigotry, and Racial Injustice and Strengthening Commitement to Racial Equity, Diversity, Inclusion, Access, and Anti-racism.” This remarkable document acknowledged that the “Water Boards’ programs were established over a structural framework that perpetuated inequities based on race,” and it provides extensive background on the systematic exclusion of many groups from the water right acquisition process. The most senior water rights in California, those targeted by this purchase program, were acquired during a period when racism was the norm, when women often lacked independent legal identity, and when Asian people were unable to become citizens, even though citizenship was open to most other races. Indigenous peoples were still subject to state-sponsored genocide and systematically disenfranchised of their land and water rights. As a result, most minorities and many women were excluded from acquiring water rights or land with appurtenant water rights. Most senior water rights were originally claimed by white men, and that disparity has continued. Buying out water rights now, as opposed to rationally regulating them, risks perpetuating that tradition. Because of the State’s continuing ownership and regulatory interest in water rights, the State still has opportunity to redress past injustices, as the Water Board resolution acknowledges. Early drafts of the legislation for the purchase program appear to recognize this history and attempt to mitigate some of the lasting harm through funding for increased access to drinking water for disadvantaged communities. Without intentional engagement to address these past injustices, the broader purchase program might result in better public control of water, but at the cost of extending inequities.
The State Senate proposal offers the promise of real change in California water. It might help to move past a decades-long stalemate, protect important tributary and coastal rivers, and ensure the survival of imperiled species. It offers quick action that could create long-sought environmental water rights. But the details matter. This proposal could just as easily result in a very minor increase in mainstem flows that does little to benefit ecosystems, or even pay for water rights that aren’t worth the paper they’re written on. A decade from now, this might be seen as a turning point or just another expensive water scheme.
At some point, transdisciplinary water and ecosystem experts need to be brought into the room. Scientists can assist policy makers to identify the locations, times, and dynamics of flows that can have the most environmental benefit (e.g., California Environmental Flow Framework). Further, transparent cost benefit analysis, water balance modeling, or ecological optimization provide important insight on when and how (e.g., functional flows) to best use additional water for the environment.
Although engaging with experts can be challenging and can occasionally stymie progress, scientists also deliver data-driven frameworks for optimizing investments and learning the most from an experiment. This knowledge works to ensure that decisions are ultimately based on sound science while also looking at economic and distributional effects in water reallocations. Management plans/processes that are transparent, reproducible and science-based often help. Indeed, some states have adopted democratic boards with a science-based mission to oversee management of natural resources within the context of the public trust. A similar model may be useful here.
Strong legal and scientific oversight will be essential to maximize the ecological benefits of purchases. We hope these suggestions provide encouragement and guidance for decision makers as they further consider water right purchases for the environment.
Karrigan Börk is an Acting Professor of Law at the UC Davis School of Law and an Associate Director at the Center for Watershed Sciences. Andrew L. Rypel is a professor of Wildlife, Fish & Conservation Biology and Co-Director of the Center for Watershed Sciences at the University of California, Davis. Sarah Yarnell is a Research Hydrologist at the Center for Watershed Sciences. Ann Willis is a Research Engineer at the Center for Watershed Sciences. Peter B. Moyle is a Distinguished Professor Emeritus at the University of California, Davis and is Associate Director of the Center for Watershed Sciences. Josué Medellín-Azuara is an Associate Professor at the University of California, Merced. Robert Lusardi is an Assistant Adjunct Professor and Research Ecologist in the Department of Wildlife, Fish & Conservation Biology and the Center for Watershed Sciences at UC Davis.
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