California: H2 Uh, Oh…

By Eleanor B.

For the third consecutive year, California is experiencing a drought of historic levels, causing water shortages to supply residential communities and hardship for agriculture and other industries that rely on water to produce goods. Despite statewide conservation efforts employed throughout 2014, the impact of recently implemented water efficiency programs have barely changed the severity of California’s water crisis(1). Decades of minimally supervised water usage feeding extensive agricultural and residential growth in this water constrained state has led to its current inflection point. California must follow the model of other western states and legislate both surface and groundwater usage rights to recapture the true value of water in an arid state.

Since its founding, water in California has been considered a public resource with rights granted for the “reasonable and beneficial” use of water. California residents have employed this public right to support the growth of the largest state economy in the nation, placing it in the top ten agriculture economies in the world (2). This growth has been achieved despite a geographical mismatch of annual water storage in the snowpack of the Sierra Nevada mountain range, with the growth of water-intensive crops in the Central Valley and residential expansion in Southern California cities. In the early and mid-twentieth century, this challenge of demand and supply was addressed through the large-scale Central Valley Project in 1933 and the California State Water Project in 1960. Today, we find the political, economic, technological and social changes that facilitated California’s economic and social growth of the 20th century to have exacerbated the current conflicts in water management that the state now faces.

Having reached crisis level in 2014, California’s state assembly and Governor Jerry Brown signed multiple new water resource bills and proposed legislation for a November 2014. On September 16, 2014 AB 1739, Senate Bills 1168 and 1319(3), California has addressed the virtual complete lack of oversight of groundwater usage by setting forth a framework for sustainable growndwater basin management by 2040. Given water levels have decreased up to 55 feet in the 20th century, the twenty-five year timeline to fix a rapidly depleting resource seems insufficient. California’s Proposition 1, the $7.5 billion water bond, also attempts to address future water resource contraints by devoting funds to building new water reservoir and storage, water recycling, watershed restoration, storm water capture, and improved flood management. While the lack of specificity in allocation of the billions in funds proposed by the bill has encouraged the support of agriculture, business, labor, environmental and wildlife groups, the end allocation of funds will likely be a point of much contention.

With estimates of California water allocation at several times actual water available, these legislative efforts are viewed by many as too little too late. However, as the last Western state in the nation to pass groundwater regulations, California’s state government has finally started the process of addressing its century long tragedy of the commons. One can only hope the state acts fast enough to reverse the damage that has been done.

(1) “NRDC and Pacific Institute Reveal Available Savings of California’s Water Supply to Bridge Worsening Shortage” (June 10, 2014)
(2) “Measure of California Agriculture” (2009)
(3) “Governor Brown Signs Historic Groundwater Legislation” , (September 16, 2014)


About macomberjohnd

HBS Finance faculty interested in sustainability in the built environment including devices, structures, townships, and cities.

One Response to “California: H2 Uh, Oh…”

  1. By John Macomber

    It’s a big problem! If you were a legislator sponsoring a bill to address this issue, what would be the main features of your approach? (Making the simplifying assumption of assuming rationality and a long view on the part of your colleagues)?


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