Hidden costs of water transfers

New pacific institute report says water transfers are not a panacea for California's water woes and may have negative impacts.


alifornians must decide what they want to do about water transfers. California Water Transfers: An Evaluation of the Economic Framework and A Spatial Analysis of the Potential Impacts, a report just released by the Pacific Institute for Studies in Development, Environment, and Security, demonstrates that water transfers can negatively impact rural communities and their environments.

Water transfers involve the sale of water, through a "lease" of a water right or the transfer of a water right itself, typically from agricultural regions to urban areas. Citing evidence from prior transfers from around the state, the report challenges the notion held by state officials and urban water agencies that water transfers are economically efficient and environmentally benign solutions to statewide water supply problems. The report is particularly timely since the CALFED Program and several legislative bills are wrestling with the issue.

According to coauthors Santos Gomez and Anna Steding, unrestricted water transfers could: · Discourage water agencies from using existing supplies efficiently.

  • Provide disincentives for sound water management.
  • Promote urban sprawl.
  • Increase groundwater overdraft.
  • Adversely impact rural economies, employment, tax revenues and public services.

According to Gomez, "extensive data in the Institute's report indicates that some of California's poorest agricultural counties are likely to be targeted as sources of water for long-term water sales." At the other end of the sale, an increased dependence on imported water moves an urban area further from sustainability.

Steding points out that, "Water transfers may make other water management options, such as recycling and conservation, less attractive." She notes that "water transfers may reduce the incentive to improve the reliability of local supplies and to link good water management with good land use planning, adding to urban sprawl."



Key policy recommendations


Gomez points out that "No state institution currently represents the public's and community's interest in water. As a result, water transfers have so far proceeded with little public and community oversight." The report recommends the development and implementation of statewide criteria governing water transfers. It emphasizes that these criteria should be developed in a collective, open manner that promotes community participation. It also offers principles for evaluating long-term agricultural to urban transfers and calls for participatory policy discussions. In particular, the report calls for reforms of California's water institutions and legal and regulatory regimes to make them more responsive to community and public needs.

According to Steding, "efforts to facilitate water transfers must balance community and social values with the efficient goals of a market." Water transfers signify a break from deep-rooted principles that treat water as a public resource, owned by all, and not to be subject to the ill or whims of individuals. "Water transfer policies must balance and protect the interests of communities, the environment, and existing water rights holders, as well as buyers and sellers," states Gomez. The information in this report will move us in that direction.

  Contact: Santos Gomez, (510) 251-1600. If you're interested in volunteering locally, call Carolyn Chase, (858) 272-0347.