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Press Release · February 23, 2011

Broad Slate of Reforms Proposed to Manage California Water

Shift Focus Away From Saving Individual Species And Toward Improving Ecosystems

SAN FRANCISCO, February 23, 2011—The rapid decline of salmon and the steady increase in the number of endangered fish species show that a new approach is needed to manage California’s aquatic ecosystems, according to a book released today by the Public Policy Institute of California (PPIC). The book’s authors propose moving away from the current strategy: taking desperate action to save one species at a time under the federal and state Endangered Species Acts. Instead, they argue that a broader approach is more promising: creating better conditions for many species and addressing the multiple causes of ecosystem decline.

This recommendation is part of a wide-ranging reform agenda detailed in Managing California’s Water: From Conflict to Reconciliation, an in-depth look at the state’s water management challenges. The authors include a team of scientists, engineers, economists, and legal experts from PPIC, three University of California campuses, and Stanford University. In their assessment, the current situation is bleak.

The state has run out of cheap new water sources, and agricultural and urban water users now compete among themselves and with environmental demands. Current policies and institutions are fragmented and failing to meet growing needs for reliable, high-quality water supply, healthy ecosystems, and flood protection. Climate warming is expected to complicate these challenges.

“Today’s system of water management, developed in previous times for past conditions, is leading the state down a path of environmental and economic deterioration. We’re waiting for the next drought, flood, or lawsuit to bring catastrophe,” says co-author Ellen Hanak, senior fellow at PPIC. “But if we take bold steps now, we can move from an era of conflict to one of reconciliation, where water is managed more flexibly and comprehensively, to benefit both the economy and the environment.”

The decline in aquatic ecosystems reflects a broader failure of water management in California. Despite several decades of well-intentioned environmental regulations, more than 80 percent of the state’s 129 native fish species are extinct or imperiled—listed as endangered or threatened, or likely to qualify for listing in the future. Piecemeal efforts to stop the declines now threaten the reliability of water supplies and flood management projects. Yet the deterioration is expected to accelerate because of continuing influxes of invasive species, increasing diversions of water, and losses of cold water habitat.

Shifting the management focus from individual species to broad ecosystems should include a number of strategies. Among them: removing or setting back levees in some locations to promote seasonal flooding, reducing the discharge of contaminants, limiting introduction of invasive species, and improving the environmental performance of some dams while removing others altogether.

The authors’ second key recommendation is that a wider range of tools be used to manage water supply, quality, and flooding. The current system relies too heavily on major public works—dams, levees, conveyance facilities, and treatment plants. New approaches offer more promise, including:

  • Urban conservation. Per-capita water use has been falling, but Californians still use much more water than others living in a similar climate, such as Australia, Israel, and Spain. Reducing water use to about 155 gallons per capita a day—30 percent below 2000 levels—would significantly reduce urban demand for exports from the Sacramento-San Joaquin Delta.
  • Groundwater banking. Expanding underground storage can be much more cost-effective than building new surface storage. Groundwater banking can stretch available water supplies and replace storage lost by the shrinking Sierra Nevada snowpack.
  • Water transfers. Buying and selling water is an equitable way to accommodate changing demands and compensate water rights holders. Water marketing has considerable potential because much farmland is planted in low-value crops. But legal and institutional barriers must be reduced.
  • Pollution management. Despite progress in water cleanup, runoff from farms, construction sites, and urban streets and gardens is not well managed. Cap and trade schemes can lower the costs of implementing standards for maximum daily discharge of pollutants.
  • Flood management. Flood risks are high and growing, and investment has been inadequate to maintain flood-protection infrastructure. Land use planning should focus on limiting new development in flood-prone areas, improving building codes, and expanding flood insurance requirements. Higher fees for properties benefitting from flood protection would bolster the state’s woefully underfunded system.

A third key recommendation is to integrate California’s fragmented water management system. One serious weakness is that hundreds of local and regional agencies separately manage supply, quality, floods, and habitat. This leads to confusion and missed opportunities. The authors propose creating regional stewardship authorities—set up at the scale of watersheds—to coordinate functions.

“Some of these reforms will require changes in laws and institutions, while many build on existing efforts and can begin to be implemented now,” says co-author Jay Lund, director of the UC Davis Center for Watershed Sciences and adjunct fellow at PPIC. “California can’t afford not to take bold steps now. By the time a crisis strikes, the best solutions may be unavailable or far more costly, and political positions too entrenched to overcome.”

In addition to Hanak and Lund, the co-authors are Ariel Dinar of UC Riverside, Brian Gray of UC Hastings College of the Law, Richard Howitt, Jeffrey Mount, and Peter Moyle of UC Davis, and Barton “Buzz” Thompson of the Stanford University Law School.

Managing California’s Water: From Conflict to Reconciliation is supported with funding from S.D. Bechtel, Jr. Foundation, The David and Lucile Packard Foundation, Pisces Foundation, Resources Legacy Fund, and Santa Ana Watershed Project Authority.


PPIC is dedicated to informing and improving public policy in California through independent, objective, nonpartisan research on major economic, social, and political issues. The institute was established in 1994 with an endowment from William R. Hewlett. As a private operating foundation, PPIC does not take or support positions on any ballot measure or on any local, state, or federal legislation, nor does it endorse, support, or oppose any political parties or candidates for public office.