Last week, Jared Huffman, member of the California Assembly and Chair of the Water, Parks and Wildlife Committee, gave an excellent talk on "Resolving the Delta Crisis." Huffman is a "card carrying environmentalist" who worked to restore flows in the San Joaquin River as a NRDC lawyer.
Here's his introduction [14 min 5MB MP3] by Michael Hanemann (and another guy), and here's his 65 minute talk/Q&A [23 MB MP3]
These are a few highlights:
- The Department of Water Resources is indeed a captive organization, serving the needs of the State Water Project contractors over those of the people of California. Huffman says that "some people" are indeed considering spinning off the SWP to contractors so that DWR can get back to managing the State's resources for the public good. The interesting question is "on what terms." I recently learned that the SWP has about $1 billion in outstanding debt. Theoretically, SWP contractors will "own" the facility once that amount is paid off, but what would happen if the State declares the debt "paid" and then puts the SWP up for sale to the highest bidder?
- Can there be co-equal goals in the Delta? "It's a management strategy, but when the fish need the water they are going to get it. OTOH, the fish are getting water and they are hardly prospering." (My interpretation is that he thinks fish will be "more than equal" if they are in trouble.)
- Most jobs losses in the Central Valley are due to housing meltdown and economic problems (a là Michael).
- Schwarzenegger has a "religious belief" in dams -- completely ignoring cost/benefit. (So does DWR head Lester Snow, but we'd expect that from a captive organization.) Farmers want them, but unwilling to pay the cost (could have them already if so). They want taxpayers to pay.
- Most important: Huffman does not want to confirm/protect rights when farmers sell/lease water. He said (paraphrasing) that "farmers' rights are already too strong; we need to consider the public trust." This was his response to my post-talk -- and untaped -- question of whether the legislature would reassure farmers who want to sell/lease water that their rights would be secure from claims that they did not "need" the water because they were selling it. In my question, I mentioned how the Exchange Contractors had decided to NOT sell some (more) of their water to Westlands (fellow CVP contrators) for fear of weakening their water rights.
* Similar to that of Attorney General Jerry Brown, the front runner for in the 2010 governor's race.
** Michael Hanemann pointed out to me (1) that vague "water rights" are impeding water markets; I agree with that, but I do not agree with (2) his emailed contention that "priority in appropriative water rights is rhetoric, not a functioning legal rule; it is a convenient myth that makes small children and economists happy (see Schorr [pdf])," since many people in many places have been making decisions based on that "myth" being true. Hanemann adds (3) that any Exchange Contractor-Westlands deal would be based on BoR contracts, not water rights. Fine, but if THAT deal cannot even get done, then how can we imagine any other deal getting done? Hanemann says (4) that all the short-term water trades reflect the "unfirm" nature of water rights, a nature that farmers (and their quick-to-protest-a-sale neighbors) understand.
7 comments:
DZ,
You say, "We could easily "fix" our water problems with water markets (ag to urban/enviro users), but they will NEVER happen if farmers would risk losing their property rights.**"
I can only speak for CO's system, but other states may have similar 'unintended consequences':
The value of a water right is in its historic use. The historic use is converted to consumptive use (CU) based on the amount of water that was actually legally removed from the stream system ( surface &/or underground)as a result of the method of irrigation and the crop(s grown.
Timing also comes into play in that the CU varies throughout the irrigation season and zero during the non-irrigation season. These CU credits are all that can be marketed and delivery costs for seepage and evaporation losses also have to be taken into consideration and accounted for.
This conversion from an old use to a new use is called an augmentation plan. The old historic CU credits must balance the new CU credits and on a monthly basis. Small ponds are often used to level out the CU for year around use, but the evaporation losses from those new ponds must be part of the equation too.
An augmentation case opens up a judicial review of the subject water rights. Any non-use of a water right is subject to abandonment in such an action.
Water from Bureau projects had its own set of internal rules, many of which were different for different projects. The McCarran Amendment further complicated such augmentation/exchange plans and capture of return flows.
With 50 years of experience, the only way I can see that your concept of a water market will work is with new water properly measured and accounted for. That takes away the "damage issue" and all but eliminates the continual bickering that for example, CA is embroiled in...
This is why water right owners are very reluctant, if not down right fearful of confirming their water use for marketing purposes !
@Ray -- I totally agree with you: "the only way I can see that your concept of a water market will work is with new water properly measured and accounted for" -- is right, but I'd like to get "old" water defined in that way as well. Define the rights, then move forward!
Great post.
DWR is indeed a bit of a captive organization, and Huffman's suggestion may have merit, although I would say that a portion of the "public good" that Huffman's new DWR should protect should be not just the slippery notions of the "public trust" that he and his enviro friends have in mind, but also the firmament of water rights as property rights for private users.
On the thing about farmers wanting new dams, you have to remember that their interest in dams is largely defensive. The new water impounded would not be so much for farmers, but for the new urban and environmental needs that have been overlaid in the last 40 years. So the new supply impounded behind new dams would not be for farmers, and they rightly don't want to pay for it. What they do want is the public to pay for new public goals, like the protection of smelt, which has a quantifiable water cost, and which the new dams would serve in an indirect sense.
On the co-equal goals for the Delta, I've always thought that this was an overly neat division of interests into the twin pillars of policy power - big water and big enviro - which gives short shrift to the poor folks who actually live there. Some of them have been reckless in the extremity of their resistance to state processes intended to fix the Delta for other users, but still their interests should not be totally disregarded by the fictional dichotomy of export/environment that has been set up by processes like Delta Vision and the BDCP. That said, there are enough angry lawyers down there in the Delta that at least the court system will hear them out.
On the "public trust" which Huffman and other "card-carrying enviros" are grasping at as the solution to the State's water problem, I have a couple of thoughts. Number one, the "public trust" they have in mind is thought to be re-distributive to their benefit (the environment), so of course they're all excited about it. But, number two, the "public trust" is ultimately a matter of the "public interest", something that was construed in the Audubon case to include environmental uses of water, but something that will also be construed to include - in cases of serious human disruption, which is starting to happen - human uses like ag and urban. It's a flexible premise, and results will differ with different courts. Expect a statute with extreme inflexibility like the ESA to run afoul of the public trust, sooner or later. There are federalism issues involved there, of course, but the basic idea is that the courts (federal or state) are not going to let the ESA drive the public interest off a cliff.
DZ,
I formulated and got Court approval for hundreds of plans for augmentation that involved Consumptive Use ( CU) credits for old water rights. That was in a system that was well defined and straight forward compared to CA... except for the issue of ownership which was more than problematic, because no agency kept track of ownership. To complicate matters further, the law with regard to the transfer of the ownership of water rights in CO was the exact OPPOSITE to the transfer of mineral rights. A silent deed transfers mineral rights, but assumes no legal transfer with regard to water rights. So, ... water rights not mentioned in the deed are not generally considered conveyed !
Now add in all the complications of CU determination and ... such is not generally possible or desirable for the old water rights.
However, I advocated and promoted for years just such a CU determination in order to facilitate an honorable water market ... it did not happen !
No point in beating a dead horse ...
Change horses in the middle of the stream and proceed with one that is not bogged down in the quagmire of historic practice and judicial findings & harmful limitations. Flexibility with certainty will reign in the dawning of the new water era ...
Can we really solve the problem with water markets? California's problem is that we haven't first determined what are the in stream needs of the Delta, what amount of water is required to meet up stream water right holders on Sac River, what water is surplus to the Delta ( that water which was defined by law to be the water exported) and what is the aggregate demand for water. Only then can we have a sense of what the water needs are, and then can we begin the discussion on how to solve Ca's water problem. The discussion going on in Sac and the demands of stakeholders South of the Delta are arguing for yesterday's status quo.
@Anon -- we can't have markets without rights, and we can't even do political horse trading without rights. So, we need to get rights clarified (do they exist or not? Are they wet or dry?) and then go fwd.
Try running a restaurant where anyone can walk in and eat food off diners' tables. Immediate fail.
@Anon, the old joke about lining up all the worlds economists comes to mind. In this case though you're talking about trying to get three different groups of scientist (river, estuary and marine) to agree on a quantity of water needed for ecological services in each of their respective fields. It's not going to happen quickly (read: ever) but in the meantime we are aware that there is a need for instream flows. So while the current arrangement is far from perfect its a step in the right direction. Waiting on an unlikely convergence of scientific opinion is likely to cause further damage both economically and ecologically. Sorting out the water rights system and moving towards an efficient market system is a stop gap while we're waiting for the "final" word from the guys in lab coats.
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