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Trading Water and Managing Groundwater
Sustainably: Insights from California
Ellen Hanak
Water Policy Center, Public
Policy Institute of California
What is water trading and why does it
matter?
2
• Water trading: temporary, long-term or permanent trades of rights or
contracts to use water
• Why it matters for water-limited regions like California:
• Reducing costs of drought
• Accommodating shifts in demand
• Adapting to a changing climate
Trading has requirements and constraints
• Infrastructure
• To connect source/destination
• To get/store/retrieve water from banks
• Protections
• No injury (unreasonable harm) to other water users (including fish
& wildlife)
• Should also aim to prevent, mitigate significant local economic
harm in source regions
3
California’s extensive infrastructure facilitates
trading, even across long distances
4
Counties in the market
California’s 2014 Sustainable Groundwater
Management Act
5
• 127 priority basins, > 250 sustainability
agencies
• Local sustainability plans due in Jan.
2020 or 2022
• 20 years to fully attain sustainability
goals:
• Water levels
• Aquifer storage
• Water quality
• Seawater intrusion
• Land subsidence
• Surface water, ecosystem impacts
In overdrafted basins, attaining balance
means more recharge, less water use, or both
6
 Cooperative recharge programs
can help capture extra water in wet
years
 Trading within basins can lower
costs of reducing water use
 This requires partnerships…and
transparent monitoring,
accounting systems for basins that
everyone can trust

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  • 1. Trading Water and Managing Groundwater Sustainably: Insights from California Ellen Hanak Water Policy Center, Public Policy Institute of California
  • 2. What is water trading and why does it matter? 2 • Water trading: temporary, long-term or permanent trades of rights or contracts to use water • Why it matters for water-limited regions like California: • Reducing costs of drought • Accommodating shifts in demand • Adapting to a changing climate
  • 3. Trading has requirements and constraints • Infrastructure • To connect source/destination • To get/store/retrieve water from banks • Protections • No injury (unreasonable harm) to other water users (including fish & wildlife) • Should also aim to prevent, mitigate significant local economic harm in source regions 3
  • 4. California’s extensive infrastructure facilitates trading, even across long distances 4 Counties in the market
  • 5. California’s 2014 Sustainable Groundwater Management Act 5 • 127 priority basins, > 250 sustainability agencies • Local sustainability plans due in Jan. 2020 or 2022 • 20 years to fully attain sustainability goals: • Water levels • Aquifer storage • Water quality • Seawater intrusion • Land subsidence • Surface water, ecosystem impacts
  • 6. In overdrafted basins, attaining balance means more recharge, less water use, or both 6  Cooperative recharge programs can help capture extra water in wet years  Trading within basins can lower costs of reducing water use  This requires partnerships…and transparent monitoring, accounting systems for basins that everyone can trust