Ellen Hanak: Yes, we are continuing to mismanage some of our groundwater basins and we have to get better at that. But if you look at human water use in California from the late ’60s to the recent years, agriculture and urban uses – including industry, residential, commercial – we are now using half as much water per capita as we were in the late ’60s. Total water use has actually been coming down. Agricultural water use has been coming down more, and it’s not been bad for the economy. The economy has continued to grow. Per capita real GDP [Gross Domestic Prod- uct] was twice as high in the mid-2000s as it was in the late ’60s, and the value of every unit of water that we’re using is now four times as high. Now part of that relates to the stories that Martha was telling about more effi cient use. Part of it is more effi cient use on the farms. Part of it is growing higher value crops. If you’re going to use water in agriculture it’s better to be using it in the higher value things. But another part of it is that agriculture is a smaller share of California’s economy. And that’s not because ag is not growing. It is growing. It’s because other things are growing faster.
Saracino: I think that’s true, but I don’t think it answers the initial question. And while there are regions that are certainly managing their water in an extremely effi cient and sustainable way, California on the whole is not. Despite the fact we’re using less water than we were historically, we’re still using more water than Mother Nature is providing on an average annual basis. So I don’t think you can escape from addressing that fact if you want to bring the state into balance on a statewide basis. I want to emphasize that I agree that a lot of regions are doing a great job at manag- ing water, but a number of regions are not. And that, as a result, is having a long term negative impact overall.
Pitzer: Does pricing get us to a place where this resource is managed perhaps in a better way?
January/February 2013
Saracino: I’m not the economist here but I would say yes, that it’s certainly a mechanism that has been underutilized to bring us into balance.
Hanak: And pricing on its own helps because it sends a signal to the water users that “I’ve got to factor this into my budget,” and you see that in places within the ag sector where farmers are paying more. That’s where they’re really watching carefully the water use and the way they’re managing it. But pricing also helps in another way. If we have the ability to move water from some users to others through the water market, which can really help as a piece of overall effi ciency of the way we manage the system. It can help in droughts, and it can help for encourag- ing more groundwater banking and groundwater storage in places that have the ability to do that.
Pitzer: Ellen, you wrote recently about water marketing and said the state needs to clarify and simplify the institutional review process while continuing to ensure the transfers do not harm the environment or other water users. Water marketing can be controversial. What can we do to smooth out the rough edges?
Hanak: What’s interesting is that most of the trading that’s happening is happening within the same regions. And that’s becoming more and more the case. You’re seeing, for example, in the San Joaquin Valley, where there are still major water management challenges including the groundwater overdraft that Anthony highlighted, you’re starting to see some of the agricultural districts that are relatively well-endowed with water making that water available to support the urban areas in a way that can be encouraging a more sustainable model for support- ing population growth in those areas. So a lot of it is not contentious and it stays under the radar. The contentious things are when the water is moving further away and when it’s moving as a result of direct changes in what’s happening in the agricultural
“… until we start doing water budgeting on a statewide and regional basis, we’re not really living within our means.”