It’s no secret that climate change poses significant challenges to water management in California. While most climate models don’t predict big changes in total annual precipitation, most do point to increasing water scarcity, more intense droughts, climate whiplash, declining snowpack, and growing flood risk.

The good news is that there are many ways to adapt to these changes, but they will require significant improvements in water accounting—that is, keeping track of when and where water is being diverted from California’s waterways. Water accounting is essential to developing more secure water supplies, restoring ecosystem health, recharging groundwater, conserving water, and reducing flood risk. The state urgently needs a modern system that can track water availability and its use within a watershed in near real-time and provide trusted information to water managers, water users, and the public.

Here are just a few areas where better water accounting could help California:

Managing water rights. The State Water Resources Control Board (SWRCB) faces daunting challenges in administering and protecting thousands of water right and permit holders and making difficult decisions to restrict water use during drought. This is made even more difficult by the lack of near real-time accounting of the location and magnitude of diversions from rivers and water that returns to rivers from irrigated fields. During recent severe droughts—harbingers of our climate future—the state was simply unable to track millions of acre-feet of water and could not respond to those drought emergencies with the precision needed. SWRCB has since updated its water rights data management system and is piloting best practices for collecting and analyzing data from remote sources These investments will grow in value if integrated with near real-time accounting.
Groundwater management. The 2014 Sustainable Groundwater Management Act has spurred long-overdue advances in groundwater accounting. Still, further improvements are needed, especially to better manage surface water and to help incentivize and scale up groundwater recharge—a key ally in the struggle to improve the reliability of California’s water supply. Proper accounting is needed to track recharge volumes, groundwater levels, and water quality, and to fairly credit and manage allocations.
Water markets. Since the 1990s, California has been expanding its water markets to reduce the costs of increasing water scarcity. These markets will be an important tool in adapting to the changing climate and can help reduce the economic impacts of sustainably managing groundwater. But fair and effective water markets require reliable measurement, reporting, and verification systems that are not yet in place.
Protecting water allocated to the environment. Today, water is allocated to the environment through regulations on water use and storage, purchased water that’s left in streams and wetlands, and new infrastructure investments designed to create more water for the environment. Purchases and new infrastructure have strong support from two major bonds (2014 and 2024). Given the current state of monitoring and accounting, it’s difficult to track this water and to determine if it’s meeting its purpose. This lack of tracking also makes it hard to protect environmental water from diversion for other uses.
Focusing on the facts. California’s water is often the source of great controversy because the stakes are so high and the trade-offs so real. This is why it is vitally important that information about water—specifically how and when it’s used—be accurate, easily accessible, and trusted.

There has been progress on several of these issues since PPIC published its 2016 report Accounting for California’s Water, which outlined how to strengthen water accounting for the state. Agencies, water suppliers, growers, and nonprofits have invested in improving groundwater accounting, estimating crop water use, and using new technology to improve measurements of water flowing through our creeks, streams, and rivers, along with modest increases in the frequency of reporting water use. Many urban water suppliers are already doing state-of-the-art accounting locally, and some groundwater sustainability agencies have been innovating groundwater accounting.

The state also recognized the value of modern water data infrastructure when it passed the Open and Transparent Water Data Act in 2016. In 2019, the California Water Data Consortium was established as an independent, nonprofit organization to help implement this legislation through public-private partnerships.

While this progress is commendable, it is still not sufficient. With climate change exacerbating water scarcity, a modern system for water accounting is no longer a boring topic we can put off for a few more years. We are taking a hard look at how best to modernize and fund water accounting in California. Modernization will not be cheap or easy, but the economic, social, and environmental costs of not modernizing will likely be much greater.