Government Money Is No Answer to California Drought
The drought in California is one of the state's worst weather-related disasters in decades, despite some recent rainstorms. The images are dramatic: Folsom Lake in the north is so dry that receding waters have revealed a Gold Rush ghost town. Farmland is bare and parched, which will lead to increases in food prices nationwide. In Sacramento, agents have been seen snooping around neighborhoods looking for improper water use.
Yet unlike hurricanes, blizzards and tsunamis, a drought has no obvious response -- no rescue, no cleanup, no rebuilding.
With no way forward, the state’s water wars have reignited, as the usual suspects -- farmers, cities, environmentalists -- battle over “their” fair share. The conflict has intensified since officials announced late last month that water agencies can expect zero deliveries from the California State Water Project this year. This is the first time in the project’s history that the enormous system of dams and canals won’t provide any water, leaving local regions largely on their own.
The most divisive battleground has been in Washington. California Republicans representing agricultural districts pushed through a House bill that would divert water away from river restoration and other environmental projects and toward farms. Democrats are expected to kill such legislation in the Senate. If they don't, President Barack Obama will veto the bill, on the grounds that it "would undermine years of collaboration between local, state and federal stakeholders to develop a sound water quality control plan."
In California's capital, the debate is over the size and priorities of a water bond on the November ballot. In 2009, the legislature approved an $11 billion measure that has since been delayed twice given the lack of public support. The bond plan may still be too larded with pork-barrel projects to pass muster with voters, even in a drought.
In the debate of alternative bond proposals, Republicans want more dams and diversions from the state's rivers and more water for farmers. Democrats offer a much-smaller, alternative bond plan focused on environmental priorities (conservation, levee rebuilding and the like).
Governor Jerry Brown’s main approach is a plan to build two giant tunnels under the Sacramento-San Joaquin Delta, an estuary that has long been ground zero in California's water wars. The project doesn’t necessarily promise more water, only a more reliable supply by addressing the environmental conditions that are killing the endangered Delta smelt fish and leading to water cutbacks.
In the throes of a drought, the “build more storage” side might have a short-term edge over the “conserve more” crowd in a political landscape that has long favored environmentalists.
"You cannot conserve what you don't have," said Gary Arant, a board member of the San Diego County Water Authority, referring to environmentalists' efforts to fight more dams and other storage projects (reflecting his personal view, and not necessarily that of his agency).
The State Water Project is the largest water conveyance system in the U.S., but “is essentially the same physical system it was 40 years ago,” he added. “What has changed is that it now serves roughly twice as many people, and because of environmental restrictions, has been less and less reliable delivering less and less each year.”
Conservation has helped, with Californians using far less water now than they did decades ago -- an environmental success story, of course. But the “conservation” mantra would be more compelling if those reciting it weren’t so dead-set against new water sources, a stance that reinforces the claim that they are using water politics to halt growth.
For instance, the California Coastal Commission approved an ocean-desalinization plant in Carlsbad, but changing politics on the commission has led it to delay an almost identical facility at an industrial site in Huntington Beach. The environmentalists who control the powerful agency are worried about the plant’s effect on plankton.
After Brown declared a drought state of emergency last month, there’s been a bigger push for widespread, mandatory rationing, but a better way to promote conservation would mean pricing water in a way that more accurately reflects supply and demand. Paradoxically, the more people have conserved, the higher their water rates, given all the fixed costs (infrastructure and salaries, for instance), which has created a perverse incentive.
Water is viewed as a “public” resource and suffers from the tragedy of the commons. Since prices are set based on complex regulatory factors rather than the market, it’s in everyone’s interest to use as much of it as possible. Users often don’t pay for its true costs. In most of Sacramento, for instance, homes don’t even have water meters, which in part explains why the city’s residents use about three times as much water per capita as San Franciscans. In one of the driest regions on Earth, the Imperial Valley, farmers grow water-intensive crops such as hay.
The state needs a more market-based system. For instance, a decade-old deal where Imperial Valley farmers sell water to San Diego County cities was approved by the courts in August, after years of litigation. A 2012 study by the Public Policy Institute of California found that such “water marketing” and “water banking” -- that is, storing purchased groundwater in aquifers -- promotes conservation, local infrastructure development and cooperation among water agencies.
Chris Rufer, president of the Woodland-based Morning Star Co., the world's largest tomato processor, told me that political restrictions make it almost impossible to transfer water around the state to foster such marketing. “Similar systems are very well developed in the private sector, with the oil and gas industry,” he said, referring to oil and gas pipelines. It’s never easy to predict how a market might work, but a move toward profit and losses rather than bureaucratic decisions would help assure that water flowed to the highest-priority uses, especially during a crisis.
It’s hard to know what kind of market-pricing system can satiate environmentalists’ endless thirst for water diversions for habitat protection. But more predictable water supplies would help their goals, too. A state that has developed a cap-and-trade system to divvy up air-pollution costs also might be able to divvy up water credits.
There’s little that will help Californians right now other than some downpours such as the one last weekend. But the sooner the state comes up with a better way to impose market discipline on its precious water resources, the better it will be able to withstand the many "worst ever" droughts of the future.
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