Local Groundwater Management as the Linchpin of Water Marketing and Water Banking

In document Who Should Be Allowed to Sell Water in California? Third-Party Issues and the Water Market (Page 143-146)

The local movement to restrict exports through the exercise of county police powers was a legitimate response to the threat of

uncontrolled mining of the aquifers, once the state made it clear that the water market was open for business in the early 1990s. Under the open-access rules for groundwater that have prevailed in California’s rural counties, the introduction of an export potential raises the likelihood of exceeding the sustainable yield. Although many of the counties that adopted ordinances were not already in situations of groundwater overdraft, there was generally an inadequate level of knowledge about basin characteristics, including how quickly exports could lead to problems for local users. In Madera County, the ordinance was introduced in response to similar concerns regarding the unknown consequences of uncontrolled groundwater banking.

The ordinances can be interpreted, in this light, as a precautionary response to a policy shift at the state level, which did not provide

adequate protections for local groundwater users. This defensive strategy is nevertheless suboptimal from the standpoint of local as well as

statewide interests. A policy limited to restricting exports does little to stabilize the aquifer in places subject to overdraft. It also makes it difficult, if not impossible, to make economic use of the underground storage space, through groundwater substitution transfers and banking of imported surface water. Attaining these goals requires a more assertive, comprehensive strategy of groundwater management that protects local users while providing opportunities to address supply and quality problems and allowing those with sound transfer and banking projects to participate in the market.

There is an emerging consensus that this management needs to be done at the local level. To some extent, this conclusion is based on a perceived political reality. The lack of comprehensive state protections for groundwater users is itself a function of a legal status for groundwater

that local users have jealously guarded. In the transition from the traditional open-access model to a regime with some collective authority over groundwater, solutions involving local institutions are more palatable than centralized management by the state. Politics aside, there are also sound efficiency arguments to be made in favor of local control, because both monitoring and the determination of local water demands is best done on a decentralized basis (Provencher and Burt, 1993).

From a limited base, the decade of the rise in the water market has also been a decade of the rise of local awareness of the need for

groundwater management in California’s rural counties. Where this is working best, one finds proactive, multiparty initiatives that have either preempted the need for restrictive county ordinances or provided alternative models that give water users the confidence to move beyond restrictions already in place.

This shift toward active groundwater management includes a range of “confidence-builders.” The first is a concerted effort to increase hydrological understanding, through data-gathering and analysis. This exercise is necessarily both ongoing and participatory. Active

management—with experimentation in transfer and banking activity—

provides an opportunity to increase levels of knowledge.

The second confidence-builder is the demonstration of an effective mitigation system for transfer and banking projects. Key ingredients include monitoring and information-sharing among all players, impartial technical review of potential third-party effects, and a mechanism for mitigating these that may include adjusting or ceasing pumping activity.

Ideally, cases where mitigation is actually necessary will be limited, but it is crucial for water users to have the assurance that it will be available.

This also implies a willingness on the part of those engaged in a transfer or banking project to accept new information on the limits of what may be done with the aquifer. Improving understanding of the aquifer can reveal constraints as well as opportunities.

The third confidence-builder is an increased appreciation at the local level that there are more effective and beneficial management approaches that include benefits for those who do not directly participate in transfer or banking projects. These wider benefits can include improved

groundwater levels as a result of recharge projects and improved water

quality as an outcome of new management protocols. They can also include improved access to surface supplies, as those directly benefiting from an interregional transfer project “share the wealth” by transferring some water to other local users at a lower price.

Last, but not least, individuals involved in local management initiatives stress the key role of the process itself as a confidence-builder:

working together at the local level to craft solutions and getting to know each other through hours and months of meetings aimed at problem-solving. In some cases (Sacramento and Kern), this process has benefited from professional assistance, with mediators or facilitators using

guidelines for meeting protocols. The successful experiences elsewhere (Glenn and Merced) show that this is not always necessary.

All levels of government, from special water districts, to

municipalities, to counties, to the state, have a role to play in improving local groundwater management. Logically, the most direct roles are for the local institutions, which need to take a leadership role in crafting locally appropriate solutions. Coordination at the local level is a

necessity, given the institutional patchwork of local governance on water issues and the frequent mismatch between institutional boundaries and the physical dimensions of basins and watersheds. The onus for moving forward will often be on those water districts whose members stand to gain the most from greater market activity; they need to show they can be team players.

Rural counties have already shown their ability to play a defensive policing role. In many places, the county is also a useful level of organization for more offensive management initiatives. Counties provide a readily available structure for convening water users, and their police powers can be used proactively as a safeguard in groundwater management. Additionally, in areas already experiencing or slated for substantial population growth, there will be an increasing need for both county and municipal governments to ensure the link between water supply and land-use planning.

Some water agencies have suggested that the threat of county intervention has been an impetus for the agencies themselves to move forward with local groundwater management plans. Clearly, the very threat of the state taking on a greater prerogative over groundwater has

been important in this respect as well. But the state also has a positive role to play in fostering local initiative by providing technical assistance and financial support. The public benefits of groundwater management justify state support to local initiatives, and it is entirely appropriate that access to funding be accompanied by incentives to incorporate sound management principles. Recent bond initiatives have made millions of dollars available for groundwater management, and recent legislation (SB 1938 and SB 1672) has provided appropriate carrots by linking this funding to the adoption of sound management criteria, such as the development of target levels for the groundwater basin and the

association of multiple parties overlying the aquifer. More direct input by the state in the form of funding and technical assistance to

characterize groundwater basin hydrology and evaluate the potential for conjunctive use projects is also warranted.3

Recently, the state has also adopted an incentive-based approach through its own role as a major player on the water market. The policy guidelines for purchases of dry-year water for 2003 indicate that the state expects local parties wishing to sell water to the program to ensure adequate local supplies and minimize third-party effects (Department of Water Resources, 2002c). The guidelines emphasize the development of transfer programs by local agencies through consultation with other local parties. This position is a natural outgrowth of the state’s position that groundwater is covered in spirit under the no-injury laws. It also reflects a sensible desire for the people’s representative to avoid purchasing water where it may generate local controversy. But the policy is also instructive for the water market more generally. It suggests that buyers can play a positive role in stimulating sounder local water management by insisting that potential sellers work through these controversies preemptively.

In document Who Should Be Allowed to Sell Water in California? Third-Party Issues and the Water Market (Page 143-146)