Recent California Water Transfers: Implications For Water Management

Abstract

ABSTRACT : The 1991 and 1992 California Drought Emergency Water Banks were the first large water transfer programs in the nation in which the State served as the predominant broker for water trades. Although the State-sponsored Water Banks have drawn widespread attention, there have been a great number of water transfers and exchanges taking place in California independently of the State. These non-State transfers illustrate well the widespread applicability of transfers in managing water resource systems, as well as the multiple mechanisms available for effecting water transfers. This paperfocuses on California's recent experiences with water transfers, and offers a series of potential lessons for federal, state, and local managers for integrating water transfers in regional water resource systems. INTRODUCTION Economists have long endorsed the idea of using markets to foster the efficient allocation of water (Milliman, 1959; Hartman and Seastone, 1970; Howe, et al. , 1986; Saliba and Bush, 1987) and over the years there has been much discussion on the legal implications (Gray, 1989; O'Brien, 1988), the institutional forums (Hartman and Seastone, 1970; Saleth,