On the origins of California water law

This is the first in a series of postings based on a current research project of mine: to understand, as an economist, the historical origins of California water law.  This project is motivated by my belief that California water law is commonly misunderstood, and that we can gain insights into its nature by examining how it developed and evolved over time.  I believe that once we place it within its historical context, many of its features no longer seem (as) mysterious.

Most of modern surface water law in California is based on the principle of prior appropriation.  This is the idea that a claimant who stakes a valid claim to water in a river or stream enjoys a right superior to those who might come along and claim the water later.  This “first-in-time, first-in-right” method of deciding who is entitled to water seems unfair to many, as it seems to privilege those who just happened to come along first.  Why should their rights take precedence, especially if many other important uses go wanting?

Well, it turns out that there is an important historical reason this principle is central to the California water code.   Prior appropriation emerged during the California Gold Rush, in the earliest years of statehood.  During this formative period, judges in the state courts were making rulings in disputes over water that would become the water law of the state.

Beginning in the early 1850’s, miners diverted large amounts of water from rivers and streams in the Sierra Nevadas in order to extract gold from the hills, in a process known as hydraulic mining.

Image result for hydraulic mining images

Hydraulicking, as it was commonly known, used enormous amounts of water, and thus required the construction of sometimes large and elaborate dams, ditches, and diversion canal systems.

Image result for flumes images mining

Now put yourself in the shoes of these miners.  Building one of these ditching systems required a massive expenditure of time, money, and resources.  The miners needed legal assurance that the water they developed could not be snatched away with impunity by newcomers.  Otherwise, why bother to undertake such an investment?

It turns out that very early on, the Gold Rush judges recognized this fundamental fact.  If they did not provide such assurances, they knew that miners and ditch companies would be discouraged from investing in these ditch systems, and vast amounts of gold might remain untapped.  The concern was expressed, for example, by the California Supreme Court in 1855 in the famous ruling Irwin v. Phillips.

Among … the most important (principles) are the rights of miners to be protected in the possession of their selected localities, and the rights of those who, by prior appropriation, have taken the waters from their natural beds, and by costly artificial works have conducted them for miles over mountains and ravines, to supply the necessities of gold diggers, and without which the most important interests of the mineral region would remain without development.

Today, 162 years later, the Gold Rush is only a memory.  But we are still feeling the impact of Irwin v. Phillips and other court cases that defined the basic principles of California water law, including prior appropriation.

Proposed pipeline to drain water from Lake Powell

From the Los Angeles Times:

In the works:  A 140-mile long pipeline to bring water from Lake Powell to a county in southwestern Utah situated roughly 90 miles east of Las Vegas.  As currently designed, the pipeline will send 86,000 acre feet – nearly 77 million gallons of water a day – from Lake Powell to Sand Hollow reservoir in Washington County.


Like many localities in the Southwest, Washington County has experienced rapid population growth in recent years, a trend which is predicted to continue into the foreseeable future.  Since 1990, the county population has tripled to 165,000 residents, a figure that is predicted to more than triple again by 2060.

The pipeline, to be financed by the state of Utah, was authorized in 2006 by the state legislature.  The Federal Energy Regulatory Commission is now to trying to decide whether to begin a two-year study of the likely environmental impacts of the construction and operation of the pipeline.

Opponents of the pipeline argue that building it is unnecessary, because Washington County residents use too much water, even compared to other localities in the Southwest.  For example, per capita water use in Washington County and neighboring St. George County averages around 300 gallons a day.  By comparison, per capita water use in Phoenix is around 175 gallons per day.

Opponents say the problem is extremely low water rates charged by the local water conservation district, under which an average family of four pays about $50 per month for water, plus a meter fee.  By raising rates and implementing various water conservation measures, they argue, the need for the pipeline can be avoided.

“It’s much more reasonable and much less expensive to implement serious water conservation measures and to implement water rate changes,” said Lisa Rutherford, a member of Conserve Southwest Utah, an environmental group in St. George. “As the area grows, those two changes by themselves will push water usage down and alleviate the need for any pipeline.”

For years now, economists have been arguing that the days of relying on development of new water supplies are numbered.  But people are remarkably resistant to managing the other half of the supply-demand equation.  And our continued resistance to demand management has significant consequences for the environment.

Assorted Links

Supreme Court sides with Agua Caliente Band of Cahuilla Indians in dispute with local water agencies over groundwater supplies in the Coachella Valley.

Replenish: The Virtuous Cycle of Water and Prosperity:  Sandra Postel’s new book, on a creative initiative to save the Verde River in central Arizona.

Staving off ecological disaster at the Salton Sea.

Pennsylvania Supreme Court to rule on legal liability for spills from fracking operations into state rivers and streams.  The ruling “could mean a difference of millions of dollars for companies facing pollution fines.”

The ongoing decline of the great lakes of the world

I recently posted about the steady decline over time in the waters of the Great Salt Lake, in Utah.  Since 1847, the Great Salt Lake has shrunk to about half its original volume, which some scientists have attributed to climate change.  As it turns out, the decline may be more attributable to human consumption as every year, humans divert some 870 billion gallons of water from freshwater streams that feed the lake.

In the decline of the Great Salt Lake, we see some parallels to another infamous event in world water history: the desiccation of the Aral Sea in central Asia.  The Aral Sea used to be one of the largest freshwater lakes in the world.  Beginning shortly after World War II, however, an intensive Soviet effort to increase cotton production led to the diversion of the waters of the two main feeder rivers – the Amu Darya and the Syr Darya – for irrigation in the current country of Uzbekistan.  The flow from the rivers that actually reached the Aral Sea slowed to a trickle, the lake shrank in size and became saltier than the ocean, and a thriving fishing industry was destroyed.  Not only that, the desiccation of the Sea dramatically worsened air quality in the western part of Uzbekistan, causing respiratory ailments and likely contributing significantly to increased infant mortality.

Today, the Aral Sea is a shadow of its former self.  Since the fall of the Soviet Union, however, steps have been taken to partially restore the Sea.  By damming off part of the Sea and increasing water flows from the Syr Darya, fishing is coming back in the northern part of the Aral Sea.

There would seem to be no reason to expect something similar to happen to the Great Salt Lake.  Without a dramatic reduction in water consumption, even partial restoration seems unlikely.  In a few decades, the Great Salt Lake may be nothing but a memory.


“The more people read about the drought, the more water they conserved”

From News Deeply:

A new study of the recent California drought finds that people started cutting back on water use, even before state and local agencies imposed mandatory water conservation measures.  The reason:  Intense media coverage of the drought.

In the study, researchers at Stanford’s Water in the West program found a strong correlation between municipal water use and media coverage of the drought, as measured by the frequency of hits in a Google search.

They found that controlling for other factors, water use in single-family residences fell by about 11 – 18 percent for every extra 100 drought-related articles published over a two month period.

Said one of the researchers:

I have worked in this field for the past 15 or 20 years, and I have never seen as much interest in the topic as I saw in those years. In social situations, as soon as I would mention what I do, everyone would be very interested and try to engage, tell me what it is they are doing to help us deal with the drought. …  [It is] a demonstration of the power that the media holds …

Focus on Research: “Emerging Markets in Water”, by Carey and Sunding

Economists have much to contribute to current debates over water policy.  Unfortunately, some of our very good ideas can get lost in translation when laypersons try to make heads or tails of academic studies.  In this new feature of this blog, I summarize a well-done academic study in terms that laypersons can (hopefully!) understand.  My hope is that these occasional summaries will contribute to a better public understanding of economic research.

The inaugural academic study I have chosen for this new feature is Emerging Markets in Water, by economists Janis Carey and David Sunding, which appeared in the Natural Resources Journal in 2001.  This article is a comparative study of water markets in California and Colorado.  Water markets are a topic of keen interest to many water economists, because they seem to hold out the hope of dramatically improved water use efficiency.  The basic question addressed by Carey and Sunding is:  Why have water markets succeeded so well in Colorado and failed so miserably in California?

The short answer is historical happenstance.  The focus of the study is two water development projects: the Central Valley Project (CVP) in California, and the Colorado-Big Thompson (CBT) Project.  Both were Depression-era projects undertaken by the federal government to provide supplemental water supplies to areas that had previously been settled.  Both commenced delivery of water shortly after the end of World War II.  But from the very beginning, subtle differences were built into the operation of the projects, with the end result that the CVP has made it much more difficult to transfer water from one user to the next.

The analysis is rich and addresses a lot of different factors, so let me focus on one of the big differences between the two projects: the differential treatment of so-called return flows.

Consider Farmer Jones, who irrigates his fields using an allotment of water from one of these projects.  After being applied, the water must go somewhere; for example, into the local aquifer or as run-off into neighboring streams.  This left-over water is referred to as return flows, and it is water that is then available for others to use, such as Farmer Smith, who owns the farm downstream from Jones.

Now suppose Farmer Jones instead wants to take his allotment of project water and sell it to Farmer Brown, who lives in the next watershed.  If he does so, what happens to the return flows that Farmer Smith had previously enjoyed?  They disappear!  This means that a transfer from Jones to Brown would end up hurting Smith, if he had previously been relying on the return flows to irrigate his lands.

One big reason it is so difficult to transfer water under the CVP is the way that California treats return flows, from a legal standpoint.  California operates under the so-called no-injury rule, which prohibits changes in water rights that injure other legal users of the water.  This means that if a water transfer causes injury to downstream users, then it is not allowed.  Since return flows are extremely common, the no-injury rule may obstruct many water transfers in California.

By contrast, under the CBT, return flows are owned by the water district that receives water from the project.  This means that downstream users have no legal grounds to object to a transfer that might affect the return flows.  This seemingly small difference – who has the legal right to the return flows – has apparently made it much easier to transfer water in the CBT.

How did the CBT and CVP come to have these very different legal treatments of return flows?  Here is where history mattered a great deal.  The CBT involved sending water from the western slope of the Rocky Mountains to the eastern slope.  Because it was “new” water, it did not have to contend with pre-existing claims to the return flows from disgruntled eastern users, who were not deprived of anything they had enjoyed previously.  This made it politically easier for the water district to claim ownership of the return flows.

Carey and Sunding provide other reasons for why it is now so much easier to transfer water in the CBT than in the CVP.  These include: different water rights structures, different numbers of users contracting with the government agencies, and different policies regarding the size of farms eligible to receive water.  If you are interested in knowing more, I strongly encourage you to read the article itself.  But bottom line:  this article is an excellent illustration of how economists can meld economic analysis with historical and legal context in order to gain insights into important policy issues.  And for water economists, it is hard to think of policies that have attracted more recent attention than water markets.

Groundwater management plans in California may not be adequately accounting for climate change

The Sustainable Groundwater Management Act, passed by the California legislature in 2014, requires local agencies to create plans for sustainable management of local groundwater basins.

A new white paper published by the Union of Concerned Scientists and the Water in the West program at Stanford University finds that, of two dozen local management plans submitted to the state earlier this year, nearly half did not include a quantitative analysis of climate change, even though required to by law.

The authors found that many agencies were not using appropriate climate data in their plans.  They wrote the white paper in order to provide guidance to local agencies to help them better incorporate climate change into their planning efforts.   This includes a four-step process to incorporate climate projections into their groundwater sustainability plans.

Click here to download the white paper.

New study on the impact of climate change on groundwater in the western U.S.

Researchers at the University of Arizona have published a study in Geophysical Research Letters that uses climate models to examine the effect of climate change on groundwater recharge in the western United States.  The study projects changes for both the near future (to roughly the middle of the century) and the far future (roughly the end of the century).  Bottom Line:  Under most of the models used, groundwater recharge will increase in the northern Rockies and Plains regions, while it will decrease in the West and Southwest regions.

“The portions of the West that are already stretched in terms of water resources — Arizona, New Mexico, the High Plains of Texas, the southern Central Valley — for those places that are already having problems, climate change is going to tighten the screws,” Meixner said.

Gated version here.

Assorted links, Cape Town edition

The water shortage is now officially a disaster.

Could “good water savings” by Cape Town residents result in them paying more for water?

The tough sell when you may have no choice: consuming treated wastewater.

Seven myths about the Cape Town water crisis.  These myths include: the City of Cape Town officials saw the drought coming and did nothing; the city did not enforce restrictions on water waste; lots of water is being lost to leaky pipes; and desalination is the answer.