California’s Current Water Rights and Investment

“Communities throughout California have invested billions of dollars in reliance on their water rights or water-supply contracts issued under others’ water rights.”

Both defenses of California’s current water rights system point to the investment that water agencies have made based on their water rights. I’m interpreting that to mean that they’ve put billions of dollars into their physical delivery systems1. I assume that the implication is that “because they know they have guaranteed water, districts are willing to develop their capital.” This is true, up to a point. There comes a point, though, where having very good water rights means that districts do not invest much in their physical capital.

One of my consistent themes is that scarcity requires management. The districts whose water rights guarantee them abundance do not invest nearly enough in their physical systems. It is especially blatant for the districts with the most senior water rights, from before 1914. They have plenty, will never get cut back, and have primitive, wasteful delivery systems. The city of Sacramento, with pre-1914 water rights, doesn’t even have water meters on houses. The city of Folsom is the same. San Juan Water District is the same, and has the highest per capita water use in the state, four times as high as average. I don’t even know how they get their usage that high. Fix leaks? Why bother? With their water rights, they will never run out.

Irrigation districts follow the same pattern. The district with the largest, oldest water rights in the state, Glenn Colusa, has earthen canals and barely any controls. Here. Look. That’s a dirt ditch with the occasional flashboard check structure in it. Scroll around. The whole district is like that2. They have not invested money on tight water control. Why would they? Under our current rights system, they will not face scarcity. Spending money on their physical capital wouldn’t get them anything. This holds true for all the old, big rights holders. When people have rights to an amount of water close to what they (perceive they) need, they invest in capital to use it well. When water rights guarantee abundance, districts invest enough to move it around sloppily, but no more than that.  Our current water rights system does not direct investment very well. It gives districts the security to do some investing, but it allows severe underinvestment for the most senior rights holders.

My other point is that for virtually all of the state, our investment in physical delivery systems would not vaporize if the water rights system were changed. The pipes would still be there; people on the other ends would still need water. What Los Angeles has invested in the LA Aqueduct will still give huge returns to the city whether the City of Los Angeles held the water rights, or if each person in Los Angeles had a birthright of water, or if Martians held the water rights and sold water to Los Angeles every day. The systems that districts invested in will still exist, and they will still serve roughly the same populations who paid for them, because they will still connect the same reservoir and cities or fields. The value of the investment doesn’t depend on the nature of the water right, it depends on whether that water is used in the same place in the real world.

Summary:
Our current water rights system does not optimize investment well. It forces some regions to start paying for expensive high entropy sources while allowing others to remain severely underdeveloped.

Changing the water rights system does not necessarily de-value the investments we have already made. The fact that most water use would remain means that the value of those physical structures would persist.

1I don’t know whether they are including the State Water Project and the Central Valley Project in that. If they aren’t, I wonder whether “billions” is too high for the remaining local systems. Well, it would cost that to replace them now, and that is a trivial side point.

2 If you are wondering whether you could see money spent on delivery systems from space, here is what looks like an undershot gate in IID (if those white round cylinders balance the gate). That square hole upstream of the gate is a stilling well, so either a zanjero can look at a ruler mounted on the side and tell the water height (low tech), or possibly so that a float inside the well can tell a computer back at the office how high the water is, so the computer can remotely open or close that gate (high tech). The white things next to the stilling well might be the telemetry (phone line or radio signal and electronic controls). Yes. When you spend money on a delivery system, it is visible from space.

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