On the public record

I do read the pro-water market pieces and I consistently have the same reaction.  What would California look like after?  What would it feel like, on a daily basis, after a water market is up and running?  I live here and I want it to be nice.  How would a water market transform us?  I never get an answer with any specificity.  This lengthy piece gives the following list of good things that would happen, after the water market gets going:

• prices would go up, creating an incentive to conserve
• new technologies for affordable water generation would be spurred
• consumers and businesses would make adjustments slowly

This piece isn’t even that explicit.  The good result of a water market is:

• water will flow to its highest and best use, and (if I interpret a bit) more desal.

This piece implies that you’d reverse the problems caused by no-market, so presumably you’d no longer have weak pricing signals.

Again, you have to read for the implications in RAND’s proposal.  With a good new market, the results would be that the price for water would represent its true value and that valuable trades would happen.

None of those is in any way helpful or precise.  Before we put a market into action in California, what would the results look like?  Here, I’ll make some up, for examples.  (Truly, I have no real notion.)

• Irrigation districts in the south valley would sell to Bakersfield and local oil fields.
• Irrigation districts in Coachella would sell to San Diego, enough that San Diego could even grow avocados again.
• The only farmland left in California would be 2 million acres of sugar beets.
• California would produce nothing but solar cells and silicon chips for the next thirty years.

See, those are made-up examples of water market outcomes that I can ponder.  Would I like living alongside that?  Do I want that for my state?  Telling me what would happen after a market is put in place allows me to decide: do I want to support putting a market in place?  Water market advocates never do that, and certainly never with even regional-level or sector-level precision.

I don’t want to put words into others’ mouths, but I believe some water market advocates are advocating a process (a market is a process, not the result) specifically because they do not want to choose an outcome or make “winners and losers” explicit.  Maybe they think that enough of people’s happiness is captured in purchasing behavior that they can assume a water market leads to the best outcome, whatever it produces.  In that case, I would ask: is there any water market outcome that you wouldn’t want?  Could there be an extreme water market outcome that wouldn’t be pleasant to live amidst?  If the reductio ad adsurdum came to pass and a flexible fast water market meant that all of California’s agriculture became a 3 million acre monoculture of tree nuts, farmed by neo-feudal agribusiness, would you like driving past that on the 5 and 99?  From that answer, I’d establish whether the market advocate felt there is any role for values in making water allocation decisions.

If there is any role for values in establishing the bounds of a water market, then we shouldn’t be mucking around with an incredibly powerful process without first establishing to some rough accuracy what we’d get when the process is done.  I’m not asking for details at the zip code level, but I do want far more than the vague bullshit in the pro-market reform papers.  A water market would transform the state I love, so I want to know what this market would transform it into.

Oh man.  I am slow and creaky.  I’ve been wanting to write some grand syntheses, but can’t pull them off.  Perhaps you’ll forgive me if I ease in with the easiest of blogging: commentary on divers items.

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You may remember that I was forced to reprimand some of our state’s most prestigious water law professors very sharply indeed.  It was a regrettable episode, so I am delighted that I can praise them with equal force.  The program for this environmental law conference looks great.   I wish I could go, or at least watch some of the sessions online.  Session 16!  A discussion of the implications of growing the world’s supply of tree nuts while our own water supply dries up!  How wonderful!

Just the other evening, I thought of two more crops that California growers are banned from growing.  Besides the obvious, pot, California growers are also banned from growing qat and opium poppies.  Every day, right now, we live in a world where growers may not plant every highly profitable crop because society has chosen a greater public good.  Neither the existence of market demand for pot, qat and opium poppies, nor the good living they could provide to some growers are cited as self-evident, irrefutable proof that California growers should be allowed to grow them.  If crazed Libertarians proposed growing them so that Californian agriculture could respond to the widest extent of market forces, we would be very comfortable saying that our government has made a decision, based on values, to forego participation in those markets.

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I agreed with much of this Q&A in the NYTimes, and disagreed with some parts.  I hadn’t read Mr. Fishman before, but admire that he laid out his arguments so neatly that I can parse where I agree and disagree.  That’s one of my goals for my own writing.  His best point is this one:

Here’s the hard part in tackling the problems: Facing reality. Water is subject to a remarkable amount of wishful thinking, even among the professionals responsible for making sure our water systems work well. Elected officials, water managers and the public all need to look at their situation with frank clarity — without optimism.

He’s right.  They cannot.  Absolutely cannot.  Today’s example made me smile.  In Stockton, an elected official with what may be extrapolated to decades of experience says of the new groundwater sustainability agencies:

“Who’s going to tell people, ‘I’m sorry, you can’t plant grapes because your groundwater basin is overdrafted and we can’t get you any more water?’ That’s almost what this comes down to,” Flinn said at a meeting last week involving many of the potential players.

That isn’t “almost” what this comes down to.  It is exactly what it comes down to.  That’s what local GSA will be doing.  He knows there has been a five-to-six million acrefoot overdraft in the Central Valley in the past year, and stopping that is the same as stopping planting.  He knows this.  But he cannot quite bring himself to say it.  He must soften the words, because the implications of the reality are so abrupt and difficult.

This drought IS what is predicted for our new climate.  When people face that reality, they’ll understand why my recommendations are consistently for cutting losses early, choosing what we want to keep, and making a gentle transition.

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I will read it again more closely, but this proposal from RAND looks like a bad case of this phenomenon.  The problem I see identified in the RAND proposal is that “many valuable trades simply don’t happen”.  What is the goal?  What would be better if those trades happened?  Urban people are happier because they have more green lawn cheaper?  Many people are happier because the price of meat is cheaper longer into the new climate?  Growers make more profits, so farm towns are more stable?  The Resnicks can get even richer?  Ag lands get retired?  The goal isn’t to have a real cool market, so what is the fucking goal, exactly, in terms of our lived experience?  After that is made explicit, we can model whether a market is the best way to achieve that goal.

Also, what Mr. Devine said.

I was reading through JPL’s Progress Report on Subsidence in the Central Valley.  I gather they’ve made some real good progress, and with successive satellite passes can get good measures of subsidence in the Central Valley in the past few years. Figure 9 caught my eye.

That’s a small, localized subsidence bowl, threatening the California Aquaduct. I wonder what they are pumping that water for? So I went over to Google maps.

Of course, almonds. It isn’t a confusing picture. There are quarter-section almond groves, with wells in the middle, right there in the center of the foot of subsidence. We can look at them a little closer.

There isn’t a street view of the intersection of Orange Ave and unnamed road. But a half mile away, at Orange Ave and Avenal Cut-off Road, there are two more wells inside the subsidence bowl. The street view catches those neatly. Here they are on both sides of the street.

I am surprised at the run-off along Orange Avenue. I usually assume that irrigators do a better job. That was 2013, so this drought was a couple years along.

I didn’t go to the Fresno County Assessor’s office to check whether those half-sections all belong to the one farm that is named on the Google map. But it is likely that they do. If so, this is a clean example of one groundwater-pumper to one piece of threatened infrastructure. The subsidence bowl (a foot of drop in two irrigation seasons, not including the 2015 irrigation season) is isolated, centered on readily identifiable wells that very likely have one owner. If work is required at Check 20 of the California Aqueduct, that owner alone is liable for, and should pay for the entire cost of those repairs.

The State Water Contractors are a sophisticated organization with good lawyers. As DWR and the State Water Contractors “develop a capital improvement program to repair damage from subsidence”, their lawyers will no doubt tell them that with JPL’s InSAR data, they may be able to recover costs from some of the pumpers who broke their canals. I would understand if farming districts do not want to broach this and would rather spread costs evenly throughout the contractors. But if municipal districts try to pass these costs along to their ratepayers without first trying to recover from the pumpers who are liable for them, they would be violating their fiduciary duty to their ratepayers.

If I were the Fresno County Department of Public Works, I would have already requested all of JPL’s InSAR data as a GIS file. I would be matching those subsidence maps up to broken bridges, roads, canals, gas lines and rail lines this very minute. They’ve already got the parcel maps to identify well owners. Fresno County owes it to their taxpayers to look for the wells causing subsidence causing infrastructure damage and try to recover repair costs. Caltrans owes all Californians the same effort.

A list of articles suggesting methods for water rights reform and the suggested reform.  I’ll try to keep it updated (starting in September).  If you see (or write) others, I would much appreciate a link in the comments.

Wilson, Reasonable Use Doctrine:

Given the severity of the drought, the doctrine can and should be used more expansively. Instead of using the water-rights priority system to make decisions on whose water use should be curtailed, the reasonable use doctrine can be invoked to make more equitable decisions.

Senior water holders and groundwater over-drafters can have their water use restricted during times of drought. The inefficient use of water should be considered unreasonable.

For example, flood irrigating a field during drought can be considered unreasonable. Likewise, so could taking twice as much water out of a groundwater aquifer as is naturally replenished with no plans to make up the difference.

Etelson, Public Trust Doctrine

First, the doctrine should be applied to groundwater. During drought years, groundwater supplies 60 percent or more of our water. Corporate farms are pumping aquifers so fast that the ground in the Central Valley is literally sinking, leaving a growing number of well-dependent communities without running water.

…

Second, the doctrine should incorporate the Precautionary Principle. In Hawaii, water regulators err on the side of protecting water when there is lack of scientific certainty regarding the damage that could be caused by the use in question.

…

Lastly, the Public Trust Doctrine renders invalid the promise to Delta farmers to refrain from restricting their usage later this year if they agree now to a 25 percent cut. Public Trust principles require that the state guarantee a sufficient flow of water for healthy rivers and streams and then divide up whatever’s left for farming and other uses.

Of course I wish for more complete and detailed proposals. But I feel like I am coaxing timid creatures out of the woods. Maybe if we show them that nothing bad happens for proposing water rights reform, we’ll get more thorough suggestions.

ADDED (I’ll clean this up when I have more time and access):

State needs an efficient water allocation system.
(www.sacbee.com/opinion/op-ed/soapbox/article31064874.html)

This story in the AgAlert helps illustrate why individual farmers acting in a water market cannot make the decisions that climate change will require. The article mentions four growers:

Stuller is down to 80 acres of citrus, 1 of 4 wells gives water.
Everett, Terra Bella ID, irrigating 15 acres of 75. Maintaining his valuable lemons and bees.
Unnamed friend of Everett, not farming entire 160 acres.
Unnamed ranch, removing a block (160 acres?) Valencias, which is a real shame ’cause I love Valencias.

It sounds like these guys are making good economic decisions; they are accurately assessing when they can’t afford to farm and keeping the high value crops.

“We can’t justify the cost of the water needed to grow this crop because of the value, so we need to take that expensive ($2,000 an acre-foot) water and grow more valuable crops such as mandarins,” Stuller said. “Growers are taking the citrus that only produces $100 a bin and pushing it out or letting it dry up, to move water to farm mandarins that produce $400 a bin.”

So why not let them work out their future in a water market?

Here are my usual reasons that we are all bored with:
1. The drought we are in now likely represents the coming climate. These guys have no water to sell if they want to do any farming at all. If they do sell, what are they then? Re-entry into farming is difficult. They become notational farmers who have other careers but get a small side income from the little water they sell every year?

2. I want them to farm because I like the small farms on the east side of the Valley. So maybe I am happy because they could buy water in a market. First, from whom? Second, I would rather they just get water for the cost of conveyance because I want them to have secure resilient farms. Third, I don’t want them to have high water costs that force them to grow only high value lemons. I want them to grow a variety of citrus, including Valencias and navels.

The new reason farmers shouldn’t make individual decisions about buying and selling water  is that individual farms are on the wrong scale for cheaply moving water:

3. We can’t get a good sense of the proportions in the article.  But let’s look at the farm that they gave the numbers for.  Everett has kept 20% of in acreage in service.   Those 15 acres must now support 75 acres worth of operations and maintenance costs for the infrastructure that delivers water to his farm; district O&M costs on each acre just became four times as expensive. On every farm, the acreage left in production will have to pay for all the costs of farmgate delivery.

For the sake of this argument, let’s say that this drought portends the coming climate and that irrigated acreage will decrease 25%.

Imagine the poor district general manager looking at his district map, with dry quarter-sections on every separate parcel.  (Grant that good rational farmers have all made smart decisions at the farm level.)  The district manager wishes that he too could make the rational decision.  If he’s going to lose a quarter of farmed district acreage, why couldn’t it be the south-east lateral?  That thing is due for a new pump, always did cost more than the gravity fed ones, the radical environmentalists are talking about a kit fox sighting out that way, and the retiring ditchtender was the only one who could nurse it through a storm anyway.

At the district level, laterals are not all the same.  They cost different amounts to maintain and operate.  Abandoning the low value ones first is the best way to keep a district solvent.  Keeping the entire infrastructure to service much less irrigated acreage will make O&M that much more expensive per acre.  Optimizing that is a decision that (smart, rational) individual farmers cannot make, because it involves more than the property they control.

The same concept scales up.  If a great deal of acreage is going to go out of production (as I predict) the decisions about what to consolidate, what infrastructure has the most value, what acreage could serve other purposes like power generation or re-naturalization, should be made at the project level.  Even in a market, even with perfect information, even with economically rational decision-making, individual farmers responding on their own farms are at the wrong scale to make those decisions.  Lots of tiny, scattered, widely distributed retired acreage will become a burden.

I don’t mean to be only arguing for the new water rights system I proposed.  I’m not even that attached to my suggestion.  I would love to argue pros and cons with someone else’s proposed water rights system and be converted to support a different concept.  (No, not stupid markets based on the current water rights system.)  But so far I haven’t seen anyone else put one on the table.  Come on, brilliant writers.  No more pieces showing how our janky system came to be and why it isn’t working.  Tell us what the good new system should be.

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I am going on an unplugged vacation.  No posts until September.  All is well.  I do not expect to disappear indefinitely this time.  See you when I get back.  Have a wonderful month.

This week we get a lengthy article on the problems of our water rights system and an op-ed pointing out that the Reasonable Use Doctrine is just sitting there, waiting for the State Board to ask it to come out and play.  I thought Wilson’s op-ed on the Reasonable Use Doctrine was about as strong as a mainstream participant can be while remaining mainstream.   He proposes that the State Board could decide that it isn’t reasonable to overdraft groundwater with no plans to replenish it.  I’ve suggested that it isn’t reasonable to plant permanent crops without an assured water supply for them.  He says there is real strength in the Reasonable Use Doctrine that the State Board could use to help manage water, instead of trying to work through the curtailments process of our water rights system or adjudication.

My main objection¹ to using the Reasonable Use Doctrine the way Wilson proposes² is that it could be a bridge, something that keeps our current water rights system in place but makes it work just enough to keep.  One of my arguments for overhauling the water rights system entirely is that we could give much better water rights to the water uses we want to support.

I propose that a much smaller agricultural sector (4.5 million acres in dry years, 6.5 million acres in wet years) get better water rights than they have now.  Not necessarily larger water rights.  Crops need about 3.5af/acre year to finish a crop, so that’s what they should get.  If we want resilient sustainable agriculture, we should give it the water it needs to grow food, flush salts and protect against frost.  There is no virtue in giving not-quite-enough water to finish the crop and protect the soil.  That amount, 3.5af/acre, might be more than some parcels have now, so if those parcels are within the lucky boundary, those rightsholders might get a bit more water.  But the size of the allotment is only part of a water right.  We could design other features of a water right to be better than they have now.

Now, water rights have a “use it or lose it’ feature that requires continuous use.  We could design new rights that don’t have that requirement. An ag right to 3.5af could always adhere to a parcel (within the chosen 4.5 – 6.5 million acres), such that it waits quietly when that parcel isn’t in production and can be reactivated just by putting the land back into production.  No “lose it” potential at all.  We could have a cleaner system for curtailing water rights in dry years, a system that gives water rights holders more certainty earlier in the year that they will get the full amount or nothing. Now water rights have a source, a season and a means of diversion.  If we want 4.5 – 6.5 million acres of farmed land, maybe we want ag water rights with more flexibility.  Maybe improved water rights would allow farmers to get their 3.5af/acre from whatever source is available, at any point in the year, by any means.  This would help with the problem that current water rights have a diversion season of late spring and summer, but in the new warmer climate, water is passing through earlier in spring.

The concept of having a water headright for each citizen might also be a better water right for cities.  Right now cities have rights to fixed supplies.  If their water right naturally grew with their population, it would avoid one of the problems that DroughtMath keeps pointing out. It is true that creating better kinds of water rights doesn’t create water to go with them. But apportioning water rights to less water overall and creating more flexible rights could give local agencies more reliability than they have now.

I see the Farm Bureau objecting to the possibility of water rights reform. But the winners of water rights reform could be better off under a new system.  A smaller ag sector might have more water, water reliability and flexibility, and State support. If this drought continues, we have the opportunity to choose what we want to support through climate change and design rights that do that. We should do that rather than try to patch together our current system enough to get by until it rains.

Continue reading →

I am delighted for this project in China, creating seven pilot water markets.  I hope we research them very carefully all along.

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It is worth remembering that part of the motivation of the Australian water market was to drive farmers out of farming.  Or at least to make them hate leaving farming less (comforted by the money from their water right).  It worked, too.  Irrigated acreage in the Murray-Darling Basin dropped by half in their drought, and is still only back up to two-thirds the pre-drought extent.  I don’t know how comforted they felt.

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I am starting to think that many of the people who advocate water markets are on autopilot, reacting to the 90’s when farm groups felt all-powerful and there was never going to be any possibility of reforming water rights.  It isn’t that they loved markets so much, but it was the sole hope of getting some water out of big boys in ag for cities.  If the big boys in ag made a killing selling cities water, well, that was a shame but it was the only possible way to move the water.  That dynamic doesn’t feel as strong any more.  Cities aren’t as urgent about getting more; they’ll look to their own sources (wastewater, greywater, desal) first to avoid the hassle.  Or we aren’t looking to move chunks of water around so much as facing the possibility of having much less water.  There’s much less water, but other mechanisms besides markets for leaving some instream (like the ESA).  Or the drought is raising questions of reforming the water rights system directly, rather than leaving them in place and moving water by markets.

Water market advocates!  If you haven’t revisited your reasons for thinking of markets as good policy for a few years, now would be a good time to double check them.  A water market may no longer be your best policy option.

At Water Deeply, Lester Snow writes:

Nonetheless, California must create a real and transparent water market that enables transfers between willing sellers and buyers. This is absolutely essential to the state achieving the necessary resilience to withstand long periods of drought.

This is assertion and nothing more.  Here is a way the state can achieve the necessary resilience to withstand long periods of drought with no market.

We could assign three kinds of water rights: instream flows, a headright for every person and a farmed acreage right.

There could be three levels for dry, average and wet years.  Each person could get 40 gppd in dry years and 60 gppd in wet years.  We could designate a core 4.5 million acres to get 3.5af/year in dry years and extend that to 6.5 million acres that get 3.5af/year in wet years.  If there is water available after demands for instream flows, urban headrights, and irrigated acreage are met, it could be auctioned.

On May 15th, we have Snowpack Day! and figure out what year we are in.  We ban permanent crops in basins with declining groundwater levels.  Once groundwater levels stabilize, permanent crops can be planted again.  In all years, we give support/money/tax credits to farmers that grow a variety of crops, mentor new farmers, market crops nearby before marketing them to further locales.

This is flexible and resilient.  It adapts year-by-year.  It provides for basic needs of Californians.  It might generate money in wet years.  It doesn’t create false expectations of water that get capitalized into land costs.

Contrast that with what we are seeing now, in a janky-ass broke-down water rights system with some water marketing overlaid.  We see a brittle system of overinvestment in tree nuts, made possible by unsustainable emergency purchases of very expensive water.  We see land boom-and-bust cycles, and a crash coming soon.  We see farmers taking on unmanageable costs to keep farming. We see the already wealthy becoming much wealthy and the already poor living even harder.  The little water market that exists (because moving water is very difficult) only amplifies the brittle traits.

The solution isn’t EVEN MOAR MARKET.  If resilience is the goal, the solution is to design a system that builds resilience with the resources we will have.

I have been watching the water field for decades.  I attend meetings and read accounts of other meetings.  I read policy recommendations until I am nearly numb to them.  I cannot summon any more interest in the intriguing in the Delta, for example.  Based on exposure to lots of ways to consider water and a willingness to trust my own assessments, I have slowly kludged together a mostly-consistent philosophy.  I may or may not have convinced some readers, and maybe there’s more agreement for parts of it than I know (although I suspect that pieces get cherry-picked to support other advocacy, which is perfectly fine).  Until yesterday, I had never seen my philosophy expressed elsewhere.  Yesterday, out of nowhere, I found a blog-popular author who isn’t on the water circuit.  S/he has assessed the situation exactly the way I have, for the same reasons.  I felt such relief reading the three water posts.  I keep reading people whom I know to be bright come to wrong different conclusions than the ones I’ve drawn.  I didn’t know how much I wanted to hear someone else say the things I say for the same reasons.

The pieces are long, give more water background than my readers need, and ramble a bit. I don’t know if you want to read them all.  But I want to highlight the things s/he says that I found deeply resonant.

From the March 18th post, which is even titled Climate Change, the “Free Market” & the California Drought:

The political problem is not an absence of power, but an unwillingness to use it. Right now the list of options is constrained to “free market” solutions only — limited to only those solutions that our wealth-captured government will consider –

…

I predict, as the crisis worsens for more and more people — impoverishing and destroying life after life — the press for solutions will reach flood levels.

…

It’s only a matter then of what solutions will be considered. When people stop letting the rich say, “Well, we can’t throw money at it,” we’ll be on our way to solving this. We can throw money at it, the money of the wealthy first –

Yes to all of those.  I am astonished by how strong this administration’s voice has been for markets.  I thought Governor Brown’s Jesuit training would help him evaluate other ways to allocate water besides economic efficiency, but it hasn’t been the case.  Not one appointed-level person has yet said anything besides “the market should dictate our choices.  We can’t make choices different from The Market.”

Quibble with the second point.  Yes, the drought is damaging lives, but those are mostly the lives of poor people and we don’t generally care about that.  I don’t think the drought has to actually destroy lives of urban Californians before they demand change.  They just have to get tired of carrying warm-up water out to their plants and have an initiative to vote on.

I have been making the point that money and water can be fungible.  If we want farms to maintain their capacity through droughts and be there in the next normal year, we could just give farmworkers and farmers cash to get by during drought years.  Money can gather and clean the next source of water for you (wastewater, stormwater, brackish water, sea water), the source of water that was too annoying to pay for when snow and rivers delivered clean water in one place.  I would love to spend the money of the wealthy on those things.