Public Policy Institute of California Releases Report—“Water and the California Economy”

A report released yesterday by the Public Policy Institute of California (PPIC), entitled “Water and the California Economy,” examines the key economic issues related to water management in California and identifies seven priorities that policymakers and water managers must address to support the state's economic vitality. The report, authored by a wide-ranging group of experts, recommends the following actions:

1. Modernize water measurement and pricing with better estimates of water use and prices that reflect water’s economic value.

2. Reduce vulnerability to water supply interruptions, particularly for the large parts of the state that rely on water exported through the Sacramento–San Joaquin Delta, where supplies are susceptible to levee failures and measures to protect endangered species.

3. Strengthen water markets by clarifying and streamlining the approval process for the sale and lease of water rights and addressing infrastructure gaps.

4. Improve local groundwater management to facilitate groundwater banking and reduce overdraft.

5. Reduce exposure to catastrophic flood risk by targeting flood protection dollars and making better land use decisions.

6. Improve environmental management through more integrated, coordinated, and accountable approaches.

7. Develop more reliable funding, especially for environmental management, flood pro­tection, and statewide data collection and analysis.

The Report states that “[c]ontrary to conventional wisdom, the primary [economic] concern at the statewide level is not periodic drought or even longer-term declines in water availability from climate change.” Instead, catastrophic supply interruptions that could result from earthquakes and levee failures, along with long-term unreliability in water supplies, particularly in water coming from the Delta, pose the greatest economic risks for the state. In addition, the Report concludes that declining groundwater basins and an increasing risk of catastrophic floods create economic vulnerability.

In general, the Report recommends that California make its water supply more efficient, diverse and flexible and that California take action to protect its water supply from catastrophic disruptions. It also identifies the need for more reliable funding for both flood management and environmental management, and the need for an ecosystem approach to environmental management. In addition, the Report recommends reducing permitting delays for water transfers by preparing programmatic environmental impact reviews (EIRs) for the river and stream systems most likely to sell water.

For more information regarding the PPIC report, please contact Elizabeth Leeper or the KMTG attorney with whom you normally consult.

Related Stories:
Central Valley Flood Protection Board Receives Public Draft 2012 Central Valley Flood Protection Plan

DWR and EPA Release "Climate Change Handbook for Regional Water Planning"

Center for Irrigation Technology Releases Report on California Agricultural Water Use