A Southern California Water Market- Managing in a Time of Scarcity

California's recent severe drought along with historical population growth has increased the need for creative water supply solutions. As the need for reliable water supplies increases so does the cost per acre-foot. In response to this, new and creative arrangements are being developed between water users and purveyors. Informal and formal water markets are increasing. In the arid Mojave River Basin in southern California, a growing water rights market provides a good solution to match supply with demand.

Adjudication of the Mojave River Basin is helping to reduce groundwater overdraft. Under the adjudication, nearly all groundwater pumpers have had to gradually reduce their pumping. As agricultural, municipal and industrial water users are faced with reduced supplies, a local water market has developed for both annual water allotments and permanent water rights. The value of annual and permanent water rights are related to the cost of imported water, which is also available in the basin, although in limited supply. The Mojave water market is helping to promote better planning for droughts, water conservation, and increased water system reliability.