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1  California has a complex, highly interconnected, and decentralized water system. Although local operations draw on considerable expertise and analysis, broad public policy and planning discussions about water often involve a variety of misperceptions—or myths—
2about how the system works and the options available for improving its performance.
3The prevalence of myth and folklore makes for lively rhetoric but hinders the develop- ment of e ective policy and raises environmental and economic costs. Moving beyond myth toward a water policy based on facts and science is essential if California is to meet the multi- ple, sometimes competing, goals for sustainable management in the 21st century: satisfying agricultural, environmental, and urban demands for water supply and quality and ensuring
4adequate protection from  oods.
5We focus on eight common water myths, involving water supply, ecosystems, and the
6legal and political aspects of governing California’s water system. These are not the only Cali- fornia water myths, but they are ones we  nd to be particularly distracting and disruptive to public policy discussions.
7Often, myths serve the rhetorical purposes of particular stakeholders. And they persist because our public policy debates are not su ciently grounded in solid technical and scien- ti c information about how we use and manage water. In combating these myths, we hope to set the stage for a more rational and informed approach to water policy and management in the state.
8www.ppic.org
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10California Water Myths
11 In combating these myths, we hope to set the stage for a more rational and informed approach to water policy and management in the state.
12This report seeks to rebuild public policy discussions on myth-free foundations. Improv- ing the collection, analysis, synthesis, and use of accurate information about the state’s water system is also necessary to encouraging fact-based policies.
13Of course, information alone will not dispel California’s water myths. But better infor- mation can fashion more e ective responses to California’s many ongoing and future water challenges. In the months and years ahead, policymakers and voters will be involved in crucial decisions regarding one of California’s most precious and controversial resources. Let’s be sure those decisions are based on reality, not myth.
14    myth
15   reality
16  1. California is running out of water.
17 California has run out of abundant water and will need to adapt to increasing water scarcity.
18  2. [Insert villain here] is responsible for California’s water problems.
19There is no true villain in California water policy, but opportunities exist for all sectors to better use and manage water.
20  3. We can build our way out of California’s water problems.
21 New infrastructure can contribute to California’s water supply solutions, but it is not a cure-all.
22  4. We can conserve our way out of California’s water problems.
23  Water conservation is important, but its e ectiveness is often overstated.
24  5. Healthy aquatic ecosystems con ict with a healthy economy.
25Healthy ecosystems provide signi cant value to the California economy, and many opportunities exist for mutually bene cial water management.
26  6. More water will lead to healthy  sh populations.
27  Fish need more than water to thrive.
28  7. California’s water rights laws impede reform and sustainable management.
29 The legal tools for reform are already present in California’s water rights laws; we just need to start using them.
30  8. We can  nd a consensus that will keep all parties happy.
31 Tough tradeo s mean that consensus is not achievable on all water issues; higher levels of government will need to assert leadership.
32    Please visit the report’s publication page http://www.ppic.org/main/publication.asp?i=890 to  nd related resources.
33 www.ppic.org
34Introduction
35California is once again in the throes of intense debates about how to manage one of its most important natural resources, water. Several years of dry weather have depleted reservoirs and groundwater basins. New environ- mental restrictions on shipping water through the fragile Sacramento–San Joaquin Delta have intensi ed water supply concerns in cities and farming regions that rely on these shipments, and proposals to bypass the Delta with
36a peripheral canal have many worried about the conse- quences of enacting them.
37 ese may be the most visible and vocal issues of the moment, but a virtual tour around the state reveals sig- ni cant water management concerns at every turn. To the west, cities and farms in the Russian River watershed have been ordered to reduce their water use to help restore  ows for steelhead trout. To the south, some Imperial Valley resi- dents are still smarting over requirements to fallow some irrigated acreage as part of a long-term transfer of Colo- rado River water to San Diego. To the east, the success of a hard-won deal to restore salmon on the San Joaquin River depends on continued cooperation among fractious stake- holder groups and improvements in conditions further downstream. To the north, water allocations for salmon are a recurring source of con ict on the Klamath River.
38Some summary statistics highlight why the environ- mental conditions of California’s water resources have become a major management concern in recent decades. Twenty-two percent of the state’s 122 remaining native
39 sh species are already listed as threatened or endangered under the state and federal Endangered Species Acts, and another 45 percent are imperiled or quali ed for listing.1 More than 90 percent of California’s lakes, rivers, and streams are listed as “impaired,” meaning that they cannot be used for one or more of their intended uses—e.g., drink- ing, irrigation,  shing, swimming (U.S. Environmental Protection Agency, 2004).
40 e challenges and con icts of water management are likely to intensify as population growth and climate change
41increase pressure on California’s resources.  e state is projected to gain roughly half a million residents a year over the coming decades (Department of Finance, 2007), and warming temperatures and accelerating sea level rise will make it increasingly di cult to satisfy agricultural, urban, and environmental water demands and to ensure adequate protection from  oods (Cayan et al., 2009).
42Policy decisions will be most e ective in addressing water management goals if they are based on an accurate understanding of the state’s water problems and potential solutions. Unfortunately, there is a shortage of systematic technical knowledge and coordinated research capability to support and advance policy discussions and decisions.
43Policy decisions will be most e ective in addressing water management goals if they are based on an accurate understanding of the state’s water problems and potential solutions.
44 is information de cit stems in part from the highly decentralized nature of water management. More than a thousand local and regional water agencies are responsible for water delivery, wastewater treatment, and  ood control, alongside many state and federal agencies. Decentralized management has facilitated considerable innovation and responsiveness to local problems, but it has also fragmented much of the detailed knowledge and strategic perspectives on California’s vast water system. And the state, with few resources and many competing pressures, requires little reporting of information from the  eld and devotes few resources to technical decision support and synthesis, monitoring of water use, or enforcement of water rights.
45As a result, misperceptions—or myths—about Cali- fornia’s water problems and solutions abound among the public, policymakers, and even many water professionals.  ese myths—which o en support particular stakeholder
46California Water Myths 3
47   www.ppic.org
484 California Water Myths
49interests—make public policy discussions, legislative debates, and water management decisions less productive and useful than they need to be if California’s water system is to respond e ectively to mounting challenges.
50 is report explores eight prominent myths about California water supply, ecosystem management, and legal and policy processes for water governance. (See the text box below for links to some additional myths.) We bring together perspectives from ecology, economics, engineer- ing, law, and the physical sciences to examine the origins of these myths, how they in uence policy, and where they fall short in their assessment of water problems and solutions. For each myth, we then suggest a replacement that would better guide policy. A concluding section summarizes key elements of a myth-free policy platform for California
51and highlights actions to strengthen the information and analysis needed for sound policy decisions.
52Myth 1: California Is Running Out of Water
53The Myth
54 e popular press o en propagates the myth that Califor- nia is running out of water. As a recent example: “Have
55you seen Lake Oroville lately? If so, you know California is running out of water” (Speer, 2008).  is myth stems from rigid notions that there is no  exibility in water manage- ment and that the economy will grind to a halt if shortages occur. It persists despite ample historical evidence and numerous economic and technical studies showing that Californians can adapt successfully (albeit at some cost and inconvenience) to living in an arid region with variable and changing water conditions. By implying that Califor- nians cannot adapt, the “running out of water” myth dis- courages e orts to manage water resources more e ciently.
56How the Myth Drives Debate
57 e notion that California is running out of water is e ec- tive in raising alarm about serious water problems but encourages a simplistic and sometimes counterproductive attitude toward solving them. If we are “running out of water,” we have to “get more.”  e assumption underlying this myth is that California’s water use and management are more or less  xed. So new water demands from popu- lation growth can be addressed only by developing addi- tional supplies, whatever the cost.  is view assumes that California’s water users have little ability to stretch existing supplies through improvements in operations, gains in water use e ciency, or reallocation across sectors.
58The Reality
59 ere is a kernel of truth in this myth: California’s avail- able water supplies are limited. Most of California’s river  ows have already been allocated (sometimes several times over), and groundwater resources have been overdrawn
60in many places.2 Water users o en experience shortages relative to these allocations and to past use, as a result of drought and environmental protection measures. With
61   Additional water myths
62A related article (Hanak et al., 2009), available at http://www .ppic.org/main/publication.asp?i=918, expands on this report and discusses several additional water myths and realities:
63Myth: Water markets can solve California’s water problems. Reality: Water markets work best in a coordinated portfolio of
64water management activities.
65Myth: Restoring native ecosystems is essential for native species recovery.
66Reality: We must  nd ways to restore native species within altered ecosystems.
67Myth: Current  ood protection standards keep communities safe.
68Reality: Current standards increase  ood risk in many locations. Myth: Groundwater is separate from surface water.
69Reality: Despite some legal distinctions, California’s ground- water and surface water are often closely interconnected and sometimes managed jointly.
70www.ppic.org
71climate change, shortages could increase, as warming temperatures reduce water supplies currently stored in the Sierra Nevada snowpack (Cayan et al., 2009).
72But it is not true that California is “running out of water.” Given California’s Mediterranean-type climate, with variable rainfall and a dry growing season, water has always been scarce, and adaptation has always been an important feature of water use (Hundley, 2001).
73In recent decades, increasing water use e ciency has helped California adapt to population growth and higher allocations of water for the environment. Agriculture and related activities account for a large but declining share
74of non-environmental water use—77 percent in 2005, down from 90 percent in 1960 (Figure 1). A driving force in improving the economic e ciency of irrigation is the steady increase in crop yields per acre. Over the last four decades, California’s crop yields have increased at an average rate of 1.42 percent per year (Brunke, Howitt, and Sumner, 2005). As farmers have shi ed to higher value horticultural and orchard crops, they have adopted more e cient irrigation technologies.3  ese yield increases and shi s to higher value crops have greatly increased the real dollar value per acre-foot of irrigation water.4
75Urban dwellers also have been adapting. Following several decades of increases in per capita use spurred by rising incomes and increased home and lot sizes, many urban water agencies began implementing conservation programs during the early 1990s drought.  e result has been per capita declines in both coastal and inland regions of California (see Figure 2, which shows inland California’s water use with and without the low-desert Colorado River region, where per capita use is particularly high). Further use reductions are being spurred by the recent drought and new environmental restrictions on pumping water to users south and west of the Delta.
76Water managers also have improved the management of developed water supplies, which has enhanced water supply reliability and  exibility. Tools include banking excess surface water from wet years in groundwater basins for use in dry years (“conjunctive use”), treating waste- water and stormwater for reuse, and the marketing and
77trading of water, all of which have expanded greatly since the 1990s.5
78Various studies suggest considerable scope for future adaptations to scarcity, including further gains in water use e ciency, changing operating schedules for water stored and released from reservoirs (reservoir “reoperation”),
79Figure 1. Total water use is now decreasing
80California Water Myths 5
81 45 40 35 30 25 20 15 10
82Total Agriculture
83          Urban
8401960 1967 1972 1980 1985 1990 1995 2000 2005
85SOURCE: Authors’ calculations using data from California Water Plan Updates (Department of Water Resources, various years).
86NOTES: Data for 2005 are provisional. The figure shows applied water use (for a definition, see Myth 4). “Urban” includes residential and non-agricultural business uses. Pre-2000 estimates are adjusted to levels that would have been used in a year of normal rainfall. Estimates for 2000 and 2005 are for actual use; both years had near-normal precipitation. Estimates omit conveyance losses (6% to 9% of the total).
87 5
88             Figure 2. Per capita urban water use is now declining
89400 350 300 250 200 150
901001960 1967
91Inland
92Inland (without Colorado River)
93      California Coastal
941972 1980 1985
951990 1995
962000 2005
97              SOURCE: Authors’ calculations using Department of Water Resources (DWR) data (2005 numbers are provisional).
98NOTES: The figure shows applied water use (for a definition, see Myth 4). Outdoor water use is much higher in inland areas because of hotter temperatures and larger lot sizes (Hanak and Davis, 2006). The low-desert Colorado River region, including areas such as Palm Springs, has especially high per capita use from golf-based tourism.
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100Gallons per capita per day (gpcd) Acre-feet (millions)
1016 California Water Myths
102improvements in conjunctive use and recycling, and some additional reallocation across sectors through water mar- keting (Department of Water Resources, 2009a; Jenkins et al., 2004; Tanaka et al., 2006; Zilberman et al., 1993).6 Although climate change may signi cantly reduce water availability and growth in farm revenues, California agri- culture appears able to adapt without declines in revenues from today’s levels, thanks to projected improvements in irrigation and crop production technology and growth in demand for higher value crops.7
103In short, California will run out of water only if its water sector does not muster the incentives, technology, and political capacity to adapt to changing demands and preferences for water use—as it has in the past.
104Replacing the Myth
105California is not running out of water, but the state will face increasing water scarcity. It is o en said that there is not a shortage of water, only a shortage of cheap water.
106Institutions and technologies must continue to change to meet future demand. Public education can help Cali- fornians realize that they reside in an arid region. With continued attention and adaptation, California will have su cient water resources to sustain prosperous social and economic development into the inde nite future.
107Myth 2: [Insert Villain Here] Is Responsible for California’s Water Problems
108The Myth
109California’s water system would work well if it were not for [ ll in the blank].
110One of the most common myths about California water is that some villain or other is preventing the state from meeting its water demands and that eliminating
111or reforming that villain would solve California’s water problems. Call it the “Chinatown Myth,” in honor of that movie’s villain, Noah Cross, who created arti cial water
112shortages by stealing water from right under people’s noses. A good villain is always rhetorically useful and makes problems seem easier to solve.
113It is often said that there is not a shortage of water, only a shortage of cheap water.
114Everyone in California has a favorite real-world water villain. Common favorites are: (1) wasteful Southern California homeowners, (2) farmers who receive federally subsidized water, and (3) the state and federal Endangered Species Acts.  e danger with this myth is that it can lead to inaction. Everyone points a  nger at someone else, rather than recognizing that we all need to change our water ways.
115Villain 1: Wasteful Homeowners in Southern California
116 e favorite villains of many Northern Californians are the pro igate homeowners of Southern California who use water to grow luscious lawns,  ll and re ll their swimming pools, and remove leaves from their driveways. According to this myth, water misuse is common in the Southland, where people forget that they are living in a former desert and import vast amounts of water, including water from Northern California.
117How the Myth Drives Debate
118If Southern California homeowners are the problem, state policy should focus on limiting their water use. Imported water is almost always diverted from alternative environ- mental or local water uses, and there is no reason to incur those costs if the water is not truly needed.
119The Reality
120 e myth of Southern Californians as water villains is based on misperceptions of actual water use practices across the state.
121Average water use per person in the South Coast—where the majority of Southern Californians live—is, in fact, among
122    www.ppic.org
123the lowest in California (Figure 3).  is stems partly from a cooler climate and denser land use than in inland areas. Statewide, outdoor water use averages over 40 percent of residential water use and increases with hotter climates, larger lot sizes, and a greater proportion of single-family homes.  e Southern California coast has the highest percentage of multifamily homes in the state, and its home lots tend to be smaller (Hanak and Davis, 2006).
124Moreover, South Coast water agencies have been among the most aggressive in reducing per capita water use. An e ective way to reduce water use is to charge higher rates— known as “increasing block rates”—for greater quantities consumed. In 2003, almost two-thirds of the population of California’s South Coast paid increasing block rates. Only half of all Californians paid such rates, including a mere
12513 percent of San Joaquin Valley residents (Hanak, 2005).
126South Coast water utilities also provide signi cant incentives for conservation. For instance, the Metropolitan Water District of Southern California has spent more than $185 million over the last decade encouraging adoption of water e cient appliances, drought resistant landscaping, and other conservation practices. Shi s out of manufactur- ing in the early 1990s also reduced per capita urban use. Overall, the South Coast used nearly 450,000 acre-feet
127Figure 3. South Coast urban water use is among the lowest in the state
128less water in 2005 than a decade earlier, despite having 2.4 million additional residents.8  e region also leads in reclaimed water use.
129It might be tempting to simply change the villain in California water policy from pool-loving residents of the South Coast to urban and suburban residents of Sacra- mento, the San Joaquin Valley, and other inland areas.
130But the urban sector as a whole accounts for just over 20 percent of water use in California, and utilities in virtually every region are working to reduce per capita use.9 Making one region into a villain oversimpli es the complex water demands in California and suggests that water conserva- tion is a bigger issue in one region or one sector than in the state as a whole.
131Villain 2: Subsidized Agriculture
132 e chief villains for many urban water users and envi- ronmental advocates are the recipients of federally sub- sidized irrigation water.  e largest federal reclamation project in the United States is the Central Valley Project (CVP), which supplies water to thousands of Central Valley farms—as well as to some urban water users (Sax et al., 2006).  e estimated yearly subsidy to farmers receiving CVP water, relative to the full-cost rate, is roughly $60 mil- lion (Environmental Working Group, 2004).
133In the minds of California’s urban water users and environmental reformers, subsidized rates paid by farmers in the CVP are unjusti ed and unfair. Critics claim that these subsidies have undermined irrigators’ incentive to conserve and encouraged them to grow lower value crops such as wheat, grain, cotton, and rice, which critics believe should be grown elsewhere.10
134How the Myth Drives Debate
135If federal reclamation subsidies are unfair and undermine agricultural conservation, the most obvious solution is to eliminate them. And Congress did increase CVP prices to farmers under both the Reclamation Reform Act of 1982 (96 Stat. 1261) and the Central Valley Project Improvement Act (CVPIA) of 1992 (106 Stat. 4600, 4706). As a result of these laws, prices for federal agricultural water are likely to
136San Francisco Bay 154 gpcd
137Central Coast 151 gpcd
138Tulare Lake 300 gpcd
139South Lahontan 262 gpcd
140Colorado River 599 gpcd
141NOTES: The figure shows 2005 applied water use (for a definition, see Myth 4). The high per capita use in the Colorado River region is partly from golf-based tourism.
142SOURCE: Department of Water Resources (provisional data).
143South Coast 176 gpcd
144California Water Myths 7
145  North Coast 200 gpcd
146North Lahontan
147344 gpcd Sacramento
148River 249 gpcd
149San Joaquin River 280 gpcd
1502005 urban water use (gallons per capita per day)
151151–154 155–200 201–280 281–344 345–599
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1538 California Water Myths
154increase by more than 65 percent from 2000 to 2030. But
155use these laws to force unreasonable reductions in agricul- ture and urban water deliveries to protect a few species of worthless bait  sh. As some critics have put it, the problem plaguing California’s water system is not a natural drought but a “regulatory drought” from environmental  ow restrictions. Since 2008, this myth seems to have gained validity, as water exports have been reduced following a federal judge’s ruling that state and federal water managers were not adequately considering the needs of  sh species in the Delta.15
156How the Myth Drives Debate
157 is myth has led some water users to call for reducing legal protections for native species.  e federal Endangered Species Act of 1973 is one of the world’s strongest environ- mental laws. Congress concluded that species are of ines- timable value and prohibited the “taking” of endangered species, regardless of the costs. Only the Endangered Spe- cies Committee, a federal cabinet-level group sometimes referred to as the “God Squad,” can grant an exemption to the act’s proscriptions—an action taken only twice to date. Some California water users now demand either that the committee be convened to allow more water to be exported from the Delta or that Congress amend the act.
158The Reality
159It is true that recent Endangered Species Act restrictions have reduced water supplies available for some water users. However, the e ects are o en overstated. Recent delta
160smelt restrictions follow a time of high sustained water exports and coincide with an ongoing drought—in all, these restrictions account for 15–20 percent of the recent declines in exports (Figure 4). Over the longer term, delta smelt restrictions are likely to reduce Delta exports by
16120 to 30 percent on average (Department of Water Resources, 2008a, 2009b; Carlton, 2009) unless the smelt respond to large scale habitat improvements.
162Moreover, many other federal and state laws designed to protect public health and the environment also restrict water withdrawals from California’s rivers and streams.16 High withdrawals threaten not only  sh species but also various
163in the meantime, CVP ni cant subsidy. Many more e cient to speed subsidy entirely.
164The Reality
165 e view of subsidized on misunderstandings today’s farm economy.
166First, the claims of
167most of today’s farmers have already paid for the subsidy through higher land prices; land eligible for subsidized water is more expensive (Hu aker and Gardner, 1986).11 Although the windfall for original landowners might have been unfair, current owners are receiving what the U.S. government led them to expect they would receive when they purchased this land.12
168Second, eliminating water subsidies is not the only way to encourage farmers to conserve water. As noted above, the economic e ciency of agricultural water use in Cali- fornia has increased steadily. Since the early 1990s, water scarcity has driven e ciency improvements among CVP farmers south of the Delta, as they seek to adjust to short- ages from drought and regulatory changes.13 Water mar- kets also are encouraging more e cient use. Farmers who can earn more by selling water than using it themselves have an incentive to do so, even if they pay little for the water.14 Since the early 1990s, active farm-to-farm markets have moved water to water-short areas with higher value output (Hanak, 2003).
169In sum, continued scarcity, along with higher water prices and other market forces, is likely to further encour- age both conservation and conversion of land to less water intensive crops and an overall decline in agricul- tural water use (Department of Water Resources, 2005).
170Villain 3: The Endangered Species Acts
171To many water users and commentators, the true villains are the federal and state Endangered Species Acts (ESA) (Wall Street Journal, 2009). In this view, environmentalists
172farmers continue to receive a sig- argue that it would be fairer and up this process by eliminating the
173farmers as water villains is based of the role these subsidies play in
174unfairness are unjusti ed, because
175www.ppic.org
176450 ESA-related cutbacks (delta smelt) 400
177350 300 250 200 150 100
178Total exports
179Juvenile delta smelt
180Winter-run salmon
1817 6 5 4 3 2 1
182California Water Myths
1839
184 Figure 4. Environmental restrictions account for 15–20 percent of recent Delta cutbacks
185                                                    50
18601967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 20090
187SOURCES: Authors’ calculations using Department of Water Resources data on exports (DAYFLOW and CDEC) and Department of Fish and Game fish survey data.
188NOTES: ESA-related cutbacks are estimated at roughly 0.5 million acre-feet in 2008 and 2009, based on Department of Water Resources (2008a, 2008b). The winter-run Chinook salmon has been listed under the federal ESA since 1989, and the delta smelt since 1993.
189  water quality and recreational uses. Simply removing the Endangered Species Act restrictions on water diversions would be unlikely to provide much additional water for non- environmental uses, especially in the long run.
190 e Endangered Species Acts and other environmen- tal laws re ect public concern over the serious e ects of human actions on the natural environment and the costs of those actions to all California residents.
191Replacing the Myth
192 ere are no true villains in California water policy. Responsibility for water problems must be shared by all water users; the problems fundamentally result from having a vibrant economy and society in an arid climate. Although rhetorically convenient, attempts to vilify one group of water users for California’s diverse water prob- lems are factually incorrect and get in the way of more productive policy discussions.
193Despite inevitable water scarcity, both urban and agri- cultural water users throughout the state have considerable opportunities to use and manage water more e ciently (see Myth 1). It is also possible to manage water for the environment more e ectively by taking habitat and the quality and timing of  ows into account (Myth 6).
194Myth 3: We Can Build Our Way
195Out of California’s Water Problems
196The Myth
197We would solve California’s water problems if we only built more   [ ll in the blank].
198All too o en, California’s water management challenges are attributed to a lack of infrastructure, be it (1) new surface storage, (2) a peripheral canal to convey water around the Delta, or (3) desalination plants.  e myth that we can build our way out of water scarcity tends to appeal to politicians and the general public because of its simplicity; it is o en promoted by special interest groups that stand to gain from a particular investment, especially if someone else will pay for it.  e danger of focusing on technological silver bullets is that it de ects attention from potentially more e ective and less costly alternatives (such as water markets, under- ground storage, and conservation), from the bene ts of coordinating many water management options, and from actions required to improve environmental conditions.
199Solution 1: New Surface Storage
200Calls for new surface storage frequently accompany the
201 www.ppic.org
202Fish abundance index, 1970s average = 100
203Delta exports (millions of acre-feet)
20410 California Water Myths
205“running out of water” myth (Myth 1). Advocates o en note that California’s population has nearly doubled since the state built the last major on-stream reservoir in the early 1980s and argue that new surface storage is needed to supply this growth and replace losses of Sierra Nevada snowpack storage predicted with global warming.
206How the Myth Drives Debate
207 is myth assumes that water supply is linked directly to surface water storage capacity. Proponents o en advocate large public subsidies for this additional storage and insist on delaying other policy changes until substantial funds are committed for surface storage expansion.
208The Reality
209Surface storage does a ord California’s water system great  exibility, making it possible to carry water over to the
210dry season and to smooth out year-to-year variations in precipitation. Surface storage operations can be especially e ective in coordination with other water management actions, such as groundwater storage, water conservation, and water markets. Reoperation of existing surface water storage will play an essential role in improving California’s water system and adapting it to changes in climate and water demands (Medellin-Azuara et al., 2008; Carpenter and Georgakakos, 2001; Fissekis, 2008).
211However, the idea that surface storage is a silver bullet for the state’s water problems is a myth founded on the erroneous notion that large, unregulated amounts of water are available to  ll new storage at a reasonable cost. It per- sists because most people do not recognize the technical limitations and because a few local interests stand to gain from state subsidies for new facilities.
212Because large reservoirs already exist on most major streams in California, expanding storage capacity has
213less potential to increase water deliveries than it did in the past.  e two frontrunners under consideration, Sites Reservoir in Colusa County and Temperance Flat on the Upper San Joaquin River, would add 3.1 million acre-feet to the roughly 41 million acre-feet of existing surface water storage capacity and increase agricultural and urban
214water supplies by just 1 percent, at an estimated cost of $6.4 billion (Figure 5; Department of Water Resources, 2009a).17 Surface storage is a costly way to expand water supplies in part because most favorable reservoir locations already have large dams.18 Early cost estimates from the Department of Water Resources range from roughly
215$340 per acre-foot for Sites to over $1,000 per acre-foot for Temperance Flat (see the table).19
216Moreover, the value of surface storage as a replacement for the snowpack is far from certain. If California’s over- all climate becomes drier (as predicted by some models, e.g., Barnett et al., 2008, Cayan et al., 2009), new surface storage will provide little additional water supply because there will be less surplus water to store (Tanaka et al., 2006; Connell, 2009). More active coordination between existing surface reservoirs and groundwater basins—with increased drought (multiyear) storage kept underground—could aug- ment overall storage capabilities at lower cost, especially with climate change (Tanaka et al., 2006; Connell, 2009).20
217Solution 2: A Peripheral Canal
218 e Sacramento–San Joaquin Delta has long been at the cen- ter of environmental, water supply, and land use con icts, and its prominence in public discussions has been height- ened in recent years by concerns over fragile levees and the fate of native  sh species. One recurring proposal is to build
219Figure 5. New surface storage will add little to existing water supplies
220 Surface storage capacity, % Existing: 41 maf
2217%
22293%
223Agricultural and urban supplies, %
224  Existing Proposed
225Existing: 38 maf (1980–2005 average)
2261%
22799%
228  SOURCE: Authors’ calculations using Department of Water Resources and U.S. Bureau of Reclamation data for Temperance Flat and Sites Reservoirs.
229NOTE: maf = millions of acre-feet.
230 www.ppic.org
231 Surface storage is a costly source of new water supplies
232for exports and for the environment. Flows within the Delta could return to a more natural, variable regime to bene t the Delta’s native  shes.
233A canal would also provide urban and farm water users with a more reliable and cleaner source of water, while allowing water management within the Delta to be tailored to the needs of  sh and other desirable aquatic organisms. By making it possible to continue moving water from Northern California to regions dependent on Delta exports, a canal would support other water management actions, such as underground water storage, reservoir reoperation, and water markets, and would make water supplies more resilient in the face of climate change (Tanaka et al., 2006, 2008; Connell, 2009).
234However, a peripheral canal alone will  x neither the Delta nor California’s water supply issues, and it is unlikely to improve native  sh populations enough to allow imme- diate increases in exports above currently restricted levels. A favorable outcome for native  shes depends on careful attention to the environmental aspects of the project, as well as complementary investments in  sh habitat (Moyle and Bennett, 2008).
235To succeed, the canal would need to be accompanied by a robust governance package that establishes legal and procedural safeguards against extracting too much water and that ties achievement of ecosystem management goals to water diversions. Since recent  sh population declines occurred during a period of high water exports (see Fig- ure 4), some reduction in water exports would likely be required with a canal, at least until  sh populations recover (Isenberg et al., 2008a).21
236Solution 3: Seawater Desalination
237To the general public, seawater desalination o en seems like the ultimate technological  x for California’s water supply. With more than 2,000 miles of ocean and bay coastline, a large coastal population, and a cutting edge technology sector, California appears well positioned to harness desalination. Some expect this new technology to become so inexpensive that it will soon banish most water shortages and controversies.
238California Water Myths 11
239   annual cost per acre-foot ($)
240 method
241  Low
242 High
243 Conjunctive use and groundwater storage
244  10
245 600
246 Water transfers
247  50
248 550
249 Agricultural water use e ciency (net)
250   145
251  240
252Urban water use e ciency (gross)
253 230
254 635
255 Recycled municipal water
256  300
257 1,300
258 Surface storage (state projects)
259  340
260 1,070
261 Desalination, brackish
262  500
263 900
264 Desalination, seawater
265   900
266  2,500
267  SourceS: Department of Water resources (2009a); Department of Water resources (2007)—low estimate for surface storage; Department of Water resources (2005)—conjunctive use; authors’ estimates—water transfers.
268NoteS: For conjunctive use, the costs of water for banking may be additional. For most options (except water use e ciency), estimates do not include delivery costs, which can be substantial. For a de nition of gross and net water use e ciency, see Myth 4.
269a peripheral canal to convey export water around, rather than through, the Delta. To many, particularly in areas that depend on water exports, the peripheral canal has become the silver bullet for addressing the Delta’s woes.
270How the Myth Drives Debate
271 e implication is that a peripheral canal should be built without delay, which would allow water exports to return immediately to their pre-2008 levels or higher.  is think- ing has led some water users to believe that Delta convey- ance is the only impediment to expanding water deliveries and has diverted attention from many additional actions required to improve environmental conditions in the Delta and California’s water system as a whole.
272The Reality
273If carefully designed and managed, a peripheral canal seems to be the best strategy for balancing environmental and economic goals for water management in the Delta (Lund et al., 2008).  e current through-Delta system is unsustain- able for the Delta’s native  shes and for human water users (Lund et al., 2008). By taking export water around the Delta, a canal makes it possible to more separately manage water
274 www.ppic.org
27512 California Water Myths
276 CALiFoRniA DEPARTMEnT oF WATER RESouRCES
277California already has substantial surface reservoir capacity, including Lake Oroville.
278How the Myth Drives Debate
279People point to declining costs and examples in the Middle East and Australia, where desalination is now used, and wonder why California is not pursuing this solution more aggressively. As with surface storage, they argue for public subsidies to jump-start desalination investments.
280The Reality
281Desalination of brackish water (less than 30% as salty as seawater) is already a proven technology in inland South- ern California. Seawater desalination might become useful in some situations: (1) in coastal urban areas isolated from the state’s wider supply network, such as the Central Coast (Cooley, Gleick, and Wol , 2006), and (2) as a reliable par- tial supply for urban areas dependent on imported water. Reliability is the primary motivation for planned desalina- tion facilities in San Diego and Orange Counties, as well as preliminary investigations in the San Francisco Bay Area.
282However, seawater desalination is unlikely to become a major California water source for several reasons.  e technology poses some major environmental challenges, including trapping marine life at intakes, disposal of brine by-product, and high energy use. It is also expensive: recent reviews  nd widely variable desalination costs, with desalination of brackish water costing about $400 to $600
283per acre-foot and seawater desalination costing about $600 to $1,000 per acre-foot for large units without unusual brine disposal costs (Karagiannis and Soldatos, 2008; Texas Water Development Board, n.d.). For California, current cost estimates are somewhat higher, likely re ect- ing the greater costs of brine disposal and environmental mitigation for seawater plant location (see the table).22 Even with continued technological advances, seawater desalina- tion is likely to remain relatively costly for urban uses and unlikely to become viable for directly supplying irrigation water for agriculture.
284Replacing the Myth
285Although new infrastructure can contribute to California’s water supply solutions, it is not a panacea in terms of costs or environmental bene ts.
286Billions of dollars of infrastructure investments are urgently needed but mostly for maintaining or rehabilitat- ing aging facilities (Hanak and Barbour, 2005), refurbishing major storage and conveyance systems to reduce their envi- ronmental impacts (temperature controls on dam outlets and more  sh-friendly diversions), and improving connections within the water system to improve  exibility in operations. Infrastructure investments are usually best  nanced by local bene ciaries and best employed within a portfolio approach to water management, which orchestrates a wide range of actions and includes new infrastructure along with water markets, underground storage, reuse, and conservation.
287Myth 4: We Can Conserve Our Way Out of California’s Water Problems
288The Myth
289 e water conservation myth implies that California can adapt to changing conditions by focusing primarily on water use e ciency. Examples of countries such as Aus- tralia, where daily residential water use is reported to have fallen to roughly 40 gpcd during the recent drought (versus
290 www.ppic.org
291about 145 gpcd in California), are used to highlight the scope for savings (Whyte, 2009).23  e danger with this myth lies in overestimating the real water savings achiev- able through conservation. Adherence to this myth dis- tracts discussion from the need for more sweeping changes in water institutions, infrastructure, and management.
292How the Myth Drives Debate
293 e idea that improvements in urban and agricultural water use e ciency could free up enough water for popula- tion growth and increased environmental use is appealing. It places blame for water problems on water users (Myth 2) while providing a silver bullet solution.
294Environmentalists o en promote conservation as an alternative to new infrastructure. A er more than a decade of  nancial support to urban water utilities implementing conservations measures, a new law now requires reduc- tions in per capita urban water use by 20 percent, in the expectation that this will free up signi cant supplies for other purposes.24
295The Reality
296Improvements in urban and agricultural water use e - ciency have already helped California adapt to scarcity, and continued reductions in water use can help Califor- nia cope with droughts and shortages (Myth 1). Reducing water withdrawals from streams and groundwater basins can yield environmental bene ts, including improved stream ow, reduced pollution runo  into rivers, streams, and beaches (Noble et al., 2003), and reduced energy use for acquiring and treating water (California Energy Com- mission, 2005).25
297But public policy discussions about water conserva- tion o en overestimate potential water savings by failing to distinguish between net and gross water use. Net (or “con- sumptive”) water use refers to water consumed by people or plants, embodied in manufactured goods, evaporated, or discharged to saline waters. Once this water is used, it cannot be recaptured. Gross (or “applied”) water use refers to water that runs through the taps of a home or business, or is applied to  elds—not all of which is consumed. Some
298of it—known as “return  ow”—is available for reuse, because it returns to streams and irrigation canals or recharges groundwater basins. Conservation measures o en target reductions in gross water use. But because of return  ow, net water savings are o en lower (and never higher) than gross water savings. Only net water savings provide more water.
299In agriculture, achieving signi cant net water savings generally requires switching to crops that consume less water or reducing irrigated land area; these two measures typically reduce farm pro ts and are therefore costly.26
300By contrast, irrigation e ciency investments, which can increase farm pro ts, may reduce gross water use per acre but increase net water use on farms by making it easier for farmers to stretch their gross supplies across additional acres of cropland.27
301Similar issues arise for urban water conservation. Outdoors, switching from thirsty lawns to plantings that use less water (a crop switch) can greatly reduce net water use. But reducing landscape overwatering (a reduction in gross water use) will generate net savings only if the excess water has not previously been recaptured in a stream or a groundwater basin.
302Only net water savings provide more water.
303Opportunities for net savings from indoor water con- servation depend on location. Almost all indoor water use returns to the system as treated wastewater.  us, indoor conservation in coastal areas, which discharge wastewater to the sea, produces substantial net water savings. But indoor conservation in Sacramento—where wastewater discharges to the Sacramento River and can be reused by others before reaching the ocean—has little e ect on Cali- fornia’s net water use.
304Not distinguishing between net and gross water sav- ings in public discussions can create unrealistically high expectations for water conservation and inaccurate evalua- tions of the bene ts of speci c conservation measures. For
305California Water Myths 13
306  www.ppic.org
30714 California Water Myths
308instance, the large potential savings from urban conserva- tion reported in the 2005 California Water Plan Update are gross, not net, savings (Department of Water Resources, 2005).  e same is true for the governor’s plan to reduce gross per capita urban water use 20 percent by 2020 (State Water Resources Control Board, 2009); although useful, the plan would produce signi cantly less than a 20 percent reduction in net urban water use.
309to be successful in addressing California’s complex, locally varied, and evolving water problems (Jenkins et al., 2004).
310Myth 5: Healthy Aquatic Ecosystems Conflict with a Healthy Economy
311The Myth
312Underlying this classic “ sh versus people” argument is the belief that natural resources should be used to generate eco- nomic wealth, and that any resource not so used is somehow “wasted.” In this view, environmental water uses and healthy watersheds have little or no economic value, so allocating water to the environment or imposing water quality regulations involves much greater economic losses than potential bene ts.
313Although rhetorically convenient for individuals and regions su ering from water scarcity or facing the costs of implementing water quality regulations, this myth over- looks or undervalues the real economic bene ts of healthy ecosystems.  e dangers are underinvesting in environ- mental actions and failing to pursue water management strategies that serve both the natural environment and overall economic well-being.
314How the Myth Drives Debate
315 e myth of an inevitable con ict between economic and environmental water uses drives much of the recent debate over water allocation, particularly during times of scarcity (see Myth 2). It also fuels resistance to the regulation of polluted runo  caused by urban activities and farming operations.
316The Reality
317Environmental regulations o en do interfere with tra- ditional economic activities. For instance, the recently imposed environmental restrictions on Delta water exports cost several thousand farm jobs (Howitt, Medellin-Azuara, and MacEwan, 2009b), and uncertainties about Delta supplies are raising concerns in some Southern California cities about the ability to approve new development.28
318  BigSToCkPhoTo
319Replacing lawns with landscapes that use less water generates net water savings but can be quite costly.
320Public discussions also frequently fail to acknowledge that water conservation has implementation and operating costs, just like other actions (see the table). Some conserva- tion quickly pays for itself—for example, low- ow  xtures that reduce hot water use save both energy and applied water (Gleick et al., 2003). But other actions can be quite costly, such as replacing lawns with landscapes that use less water (Hanak and Davis, 2006).
321Replacing the Myth
322Water conservation is important, but its e ectiveness is o en overstated.
323To free up supplies for other users, conservation must focus on net water reductions. As with building new infrastructure, conservation should be part of a portfolio approach to water management, which is much more likely
324www.ppic.org
325Yet environmental water uses also add economic value to California.  is is not always readily apparent, because the market generally does not put a price on environmental  ows, healthy watersheds, or the services that they provide (National Research Council, 2005a; Brauman et al., 2007). But new tools are emerging to measure and economically value these services (see the text box at right). For example, instream  ows support recreational and commercial  sh- eries, enable water-based recreation, and increase water quality (Daily et al., 2009). Wetlands and healthy water- sheds also reduce  ood risks. Watershed protections save U.S. cities billions of dollars per year in avoided treatment costs (Postel and  ompson, 2005); San Francisco alone saves tens of millions of dollars per year because it receives water from the pristine Hetch Hetchy watershed (Null
326and Lund, 2006).29 Sacramento Valley rice farming has developed substantial mutual bene ts with wildfowl (Bird, Pettygrove, and Eadie, 2000). And most people are will- ing to pay for the continued existence of native species and landscapes, even if they may never see them (sometimes called a “nonuse” or “existence” value).
327One consequence of the failure to put a price tag on environmental  ows is that many environmental water demands remain unsatis ed.30 In addition, public and private decisions o en neglect the economic costs of envi- ronmental e ects from traditional agricultural and urban water uses. For example, many groundwater basins are contaminated by accumulations of nutrients and pesticides from farming or from leaching of industrial chemicals (Oster, Vaux, and Wallace, 1994; California Department
328of Pesticide Regulation, 2009). Although environmental regulations have begun to hold water users, dischargers, and land use agencies responsible, others generally bear the costs of the environmental degradation—through diminished recreational opportunities, higher drinking water treatment costs, greater health risks, increased  ood- ing, and other e ects, including health risks for wildlife and plants.
329 e recent San Joaquin River settlement, which will decrease agricultural diversions to bene t salmon habitat, provides a good illustration of the importance of consider-
330ing environmental values in water management decisions.  e estimated gains in economic value from restored  ows (in terms of recreation, lower treatment costs, and the “existence” value of restored  ows) can far exceed farm revenue losses.31
331As California’s economy continues to shi  from resource-dependent goods production to activities more dependent on environmental quality for recreation and other ecosystem services, it will become increasingly important to manage water resources for both commercial value and healthy ecosystems.
332California Water Myths 15
333  Valuing ecosystem services
334Ecosystem services are bene ts that ecosystems provide to humans. Healthy rivers and watersheds, for example, can provide salmon and waterfowl, whitewater for kayakers, and clean drinking water for cities. The Millennium Ecosystem Assessment (2005) gives four ecosystem services categories:
335Provisioning services — providing food and water. Regulating services — sequestering carbon and reducing
336soil erosion.
337Cultural services — providing recreation and spiritual renewal.
338Supporting services — promoting soil fertility and primary production.
339It was historically di cult to measure and value these services, except for the few services (e.g., food) traded in the market- place. Scientists today, however, are developing techniques
340to estimate how various actions will a ect ecosystem services and to value those services in economic and non-economic terms (DeGroot, Wilson, and Boumans, 2002; Daily et al., 2009). A recent study by the Science Advisory Board for the U.S. Environmental Protection Agency (2009) concludes that the government should better integrate ecosystem services into decisionmaking and discusses a variety of methods for valu- ing ecosystem services. These methods include:
341Measures of public attitudes — surveys and focus groups that elicit public preferences for ecosystem services.
342Economic methods — methods to estimate how much people are willing to spend to avoid losing a service.
343Civil valuation methods — public referenda or initiatives that provide information about how much the voting population values particular services.
344www.ppic.org
34516
346California Water Myths
347 California must  nd ways to manage water jointly for environmental and commercial bene ts.
348Replacing the Myth
349Healthy ecosystems provide signi cant value to California’s economy, partially and sometimes fully o setting their costs to traditional economic sectors. Direct bene ts include improvements in recreation, commercial  shing, and drink- ing and agricultural water quality, and indirect bene ts include improvements in the quality of life in California.
350California must  nd ways to manage water jointly for environmental and commercial bene ts. Better accounting of water use and its economic and environmental bene ts and costs can help guide policies for watershed management.
351Myth 6: More Water Will Lead to Healthy Fish Populations
352The Myth
353Ongoing water management debates all involve a com- mon question: “How much water do the  sh need?”  is question stems from the assumption that simply allocat- ing more water will lead to healthy  sh populations.  ose involved in managing water resources know that this assumption is wrong. Yet it remains the primary (if not sole) focus of debate, o en to the detriment of other, more important factors for species recovery.
354How the Myth Drives Debate
355 e assumption that more water is su cient to recover  sh species oversimpli es current policy debates. Utilities and water contractors focus on this myth because it implies that a science-based, quanti able solution exists with reasonable certainty. It allows  nancially strapped  sh- ery agencies to continue monitoring  ows using existing
356stream gauges, rather than expanding e orts to measure  sh populations. Elected o cials also rely on this myth because it is easy to communicate and understand.  e result has been a discussion of environmental  ows discon- nected from other  sh needs and less e ective in support- ing  sh populations.
357The Reality
358 e myth that more water is su cient for healthy  sh populations rests on a basic truth: To state the obvious,  sh need water.32 Stream ow diversions and groundwater pumping have signi cantly diminished  sh numbers, with great e ects on Central Valley, Lahontan, and Central Coast and South Coast rivers and streams (Moyle, 2002; Moyle et al., 2009). Perhaps the most striking example
359is the complete dewatering of the San Joaquin River and the resulting extirpation of spring-run Chinook salmon (Brown, 2000; Moyle, 2002). Clearly, in some cases more water is necessary for improving  sh stocks.
360But more water alone is rarely su cient.  e best answer to the question “How much water do the  sh need?”—one that re ects the reality of allocating water to the environment—is the maddeningly vague “It depends.”
361First, more water is not always better for  sh. If the water is of the wrong quality—in terms of temperature, sediment, nutrients, and contaminants—it does little
362good and may do harm. Less water of better quality might support larger and healthier desirable  sh populations.33 Fishes adapted to cold, clear waters, such as salmonids,
363do not bene t from higher releases of warm, nutrient-rich water (National Research Council, 2005b). Alternatively,  shes that evolve in warmer waters tend to do poorly when water temperatures are made arti cially cold by releases from dams (Clarkson and Childs, 2000).
364Second, without su cient physical habitat, more water does little good and may cause harm. Habitat needs con- nectivity and complexity, along with the ability to adjust to changing conditions (Graf, 2001; Zedler, 2000). For example, increasing winter and spring  ows on leveed or channelized rivers cut o  from the  oodplain provides little bene t and may even harm scarce in-channel habitat.
365  www.ppic.org
366 ird, poorly timed  ows can be ine ective or counter- productive. Water allocations for the environment should be viewed di erently from irrigation water allocations, with yearly or monthly allocations at some  xed  ow rate. California’s Mediterranean climate has large seasonal, annual, and spatial variations in  ows, temperatures, and physical habitat. Few e orts to manage ecosystems, much less individual  sh species, adequately account for this variability when prescribing increases in  ow (Baron et al., 2002; Moyle et al., 2009).
367The best answer to the question “How much water do the  sh need?” is the maddeningly vague “It depends.”
368Fourth, many factors can a ect wild  sh populations, such as salmon and steelhead, that migrate between rivers and the ocean.  ese factors range from ocean conditions, to rates and timing of pumping from the South Delta pumping plants, to interactions with  sh of hatchery origin (Moyle and Bennett, 2008).  us, putting more water down a river without addressing problems at other locations may not signi cantly improve  sh populations.
369Finally, science simply cannot accurately and precisely predict how much water the  sh need. Large uncertainties are unavoidable in assessing the magnitude, timing, fre- quency, and duration of ecological  ows. To address these uncertainties, adaptive management strategies, which view all environmental  ows as experimental and establish procedures for adjusting them, will be required (National Research Council, 2004). To date, no major California water projects have successfully implemented adaptive management.
370Replacing the Myth
371Native aquatic species need more than water to prosper. To support native  sh populations, water  ows must have appropriate seasonal and interannual variability, abundant
372BigSToCkPhoTo
373Many factors can a ect wild  sh populations, such as these salmon, as they migrate between rivers and the ocean.
374and complex physical habitat, high water quality, and pro- tection from the e ects of invasive species.
375E ective water policy must pragmatically embrace this complexity. Solutions will need to be  exible, account for the natural variability of water and the surrounding environment, and account for the complexity of ecosystem responses. Fishery agencies will need greater resources to adequately monitor the e ects of changing  ows, or they will risk making serious errors in  ow prescriptions. Most challenging of all, e ective solutions will require greater  exibility and creativity on the part of agricultural and urban water providers and may reduce the reliability of water supplies.
376Myth 7: California’s Water
377Rights Laws Impede Reform and Sustainable Management
378The Myth
379 is myth promotes the idea that California cannot e ectively address its current and future water challenges because of its system of archaic and entrenched water rights. In this view, century-old water allocations and rules
380California Water Myths 17
381    www.ppic.org
38218
383California Water Myths
384 California water law embodies
385far more  exibility and potential for reform than is often understood.
386still dominate California water law. So, for example, ine - cient water uses are insulated from regulation except in the most egregious cases of waste. Likewise, seriously degraded aquatic ecosystems cannot receive su cient water because of longstanding water and contract rights. Belief in the rigidity of California water law has been a major impedi- ment to improving water policy and management.
387How the Myth Drives Debate
388Many impartial observers of California’s water rights sys- tem believe in this myth, but it is also perpetuated by those who stand to lose from changes in their water rights.  us, many groundwater users argue that the state has no author- ity to regulate their actions, and senior surface water rights holders furnish legal objections to being held accountable for environmental water  ows. Water rights holders and water contractors o en contend that the government must pay them just compensation when it restricts their water use
389to protect endangered species or water quality.  e di cul- ties of major legislative or constitutional reforms of water rights and the potential costs of compensation can appear as insurmountable obstacles to reform.
390The Reality
391California’s system of water rights is a complex, o en confusing, and sometimes incoherent amalgam.34 Chal- lenges to water use e ciency and to existing allocations of water can be problematic, both because of costs and delays of adjudication and because water and contract rights to water service are “property” under the California and fed- eral constitutions and cannot be “taken” unless the govern- ment pays just compensation to the owners.
392However, California water law embodies far more  ex- ibility and potential for reform than is o en understood. Far from being an absolute form of private property, water rights are shaped and constrained by a variety of rules designed to ensure that all water uses are reasonable and promote the public interest.
393 e “reasonable use” requirement of California’s Con- stitution is the foundation of the state’s water rights system and applies to all water rights.35  e California Supreme Court has held that “no one can acquire a vested right to the unreasonable use of water” (Barstow v. Mojave Water Agency, 2000; National Audubon Society v. Superior Court, 1983). Consequently, the state may enforce the reasonable use mandate without running afoul of the constitutional ban on “taking” property.36 Water users, as well as individ- ual members of the public, have the authority to challenge an existing water use as unreasonable.
394Reasonable use is a dynamic principle that can respond to changes in hydrology, technology, scienti c information, water demand, and economic and social conditions (Environ- mental Defense Fund v. East Bay Municipal Utility District, 1980).  e determination of reasonable use “depends
395on the entire circumstances of each case” and cannot be resolved in isolation from critical statewide considerations. As water becomes increasingly scarce, a paramount con- sideration is the “ever increasing need for the conservation of water” (Barstow v. Mojave Water Agency, 2000).
396  BigSToCkPhoTo
397The public trust doctrine was used to require Los Angeles to divert less water from Mono Lake to protect its ecosystem.
398www.ppic.org
399 e public trust doctrine further contributes to the  exibility of California’s water rights system.  e state has both the authority and the “a rmative duty . . . to protect public trust uses whenever feasible” (National Audubon Society v. Superior Court, 1983).  is means that the state “has the power to reconsider allocation decisions” even a er it has awarded a water right. As with the reasonable use requirement, the public trust doctrine is dynamic and “su ciently  exible to encompass changing public needs” (Marks v. Whitney, 1971).
400 e  exibility inherent in these fundamental rules of California water rights law has enabled the state to address ine cient or outdated water uses in a variety of settings.37  e doctrine of reasonable use may support several neces- sary changes in California water policy, including:
4011. Prevention of waste and improvement in water use
402e ciency. A property right in water wholly depends on its reasonable use.  e state has the authority to declare a variety of water practices unreasonable, even if they were considered acceptable in the past.38  is would not constitute a “taking” for which the state would need to pay just compensation.
4032. Creation of incentives to enhance water allocation e ciency.  e reasonable use mandate can be used to encourage the transfer of conserved water to other users through a water market.
4043. Compliance with environmental standards and pro- tection of the public trust. Because no constitutionally protected property right exists for an unreasonable use of water, when the state abates or reforms water prac- tices that unreasonably harm the environment, it may do so without payment of just compensation.
405Replacing the Myth
406 e legal tools for reform are already present in California’s water rights laws. Indeed, they have been there for many decades. We just have to use them.
407 e state legislature, as well as state agencies, courts, and private water users, have signi cant authority under current water law to meet the myriad challenges facing California.
408However, strong leadership will be required to over- come resistance to change.  e State Water Resources Control Board (SWRCB) needs political support and an adequate budget to supervise and to promote the reason- able use of water. And California needs to begin requiring the full range of water rights holders to disclose their water use. Accurate and current information about surface and groundwater use is essential to the task of better managing the state’s water resources.
409Myth 8: We Can Find a Consensus That Will Keep All Parties Happy
410The Myth
411 is myth is a modern-day reaction to the idea that Cali- fornia’s water problems will always result in “water wars”: hard-fought battles that result in winners and losers, most o en decided by the courts or public referenda. Achieving consensus is seen as a way to balance the competing goals of di erent stakeholders. But when consensus processes avoid inevitable tradeo s, they can lead to ine ective incre- mentalism and indecision on critical water policy issues.
412How the Myth Drives Debate
413Consensus-based decisionmaking was popularized during the CALFED39 decade, from the mid-1990s to the mid- 2000s, when diverse parties sought mutually compatible solutions for the environmental, water supply, and land use problems of the Delta. Although that process is widely considered to have failed in achieving its primary goals, consensus-based decisionmaking continues as the hall- mark of stakeholder-driven planning and policy processes. Many stakeholders support consensus processes to be
414sure they get a seat at the bargaining table, where they can defend their interests.
415The Reality
416Consensus is most promising where incremental changes to the status quo can allow all parties to improve their
417California Water Myths 19
418 www.ppic.org
41920 California Water Myths
420position without sacri cing their fundamental interests
421or positions. For instance, the California Urban Water Conservation Council (a group of water utilities, agencies, and environmental organizations) has had good success in fostering urban water conservation actions across the state.
422However, many major water policy choices facing Cali- fornia will not result in win-win outcomes and will require that some groups relinquish some of their fundamental positions or interests. For example, a peripheral canal can bene t the economy and the environment but will likely accelerate water quality losses for some Delta farmers and make it less likely that the state will provide large subsi- dies to shore up all of the Delta’s aging levees (Lund et al., 2008). To seek consensus on such water policy matters is
423to run the risk of maintaining the status quo rather than making hard choices.40
424Placing a consensus process within a legal, regulatory, or political framework and time line can motivate par-
425ties to be more earnest and timely in seeking consensus solutions. For instance, the San Joaquin River accord was reached by farmers and environmentalists under the threat of a court-ordered solution. If consensus processes fall short, some tough decisions need to be brokered by higher level authorities, with an aim to achieve signi cant buy-in, rather than to make all parties happy.
426Acknowledging inevitable tradeo s does not mean ignoring the consequences for a ected parties. When the best overall solutions involve losses to fragile groups, side
427Acknowledging inevitable tradeo s does not mean ignoring the consequences for a ected parties.
428payments—in cash or in kind—can help so en the costs of adjustment. Incentive payments are likely the best option for Delta landowners facing eventual loss of some islands to  ooding (Lund et al., 2007, 2008). Financial payments have so ened the e ects of structural changes in the
429economy that had severe rami cations for some industries (e.g., textiles and logging), and similar strategies have been used to address the  nancial e ects of water transfers in some California farm communities (Hanak, 2003).
430Replacing the Myth
431Consensus is not always feasible for achieving sustainable water policy outcomes. For some big decisions, tradeo s are inevitable and higher level authorities need to provide direction and mediate con ict.
432Although decentralized decisionmaking can be highly e ective for many local and incremental water management decisions, matters of broader public importance, involving many historically confrontational interests, will require strong state or federal leadership to broker solutions and achieve signi cant buy-in. Finding ways to acknowledge and address consequences to a ected parties—without ceding to unreasonable calls for compensation—is a central challenge for California’s water future.
433Moving Beyond Myth
434California faces major challenges in establishing a sus- tainable path for water resource management in the 21st century, as continued population growth, unmet environ- mental demands, and climate change will pose increasing strains on the state’s usable water resources, raise costs, and heighten already substantial con icts among various interest groups. Fortunately, California’s innovative water resource sector will help meet those challenges. Numer- ous local and regional water supply, quality, and  ood control agencies actively experiment with solutions and learn from each other to adapt to changing conditions and opportunities.
435Yet a signi cant downside of this decentralized system is the limited extent to which information is collected, shared, and analyzed on matters of statewide importance.  is setting fosters the persistence of water myths—a collection of partial truths, oversimpli cations, outdated notions, and misperceptions—which distort policy debates
436   www.ppic.org
437and impede the development of e ective policies. Myth is o en more convenient than reality, which forces society to confront hard choices.
438Available, up-to-date information—such as that pre- sented here—provides a basis for rebuilding public policy discussions on myth-free foundations. Some foundational facts include the following: First, California has passed the point where reasonably priced “new” water is available,
439and costly new infrastructure decisions must be weighed against alternatives that use existing infrastructure more e ectively, taking into account cost, reliability, and envi- ronmental consequences. Second, there are no villains: Water users in both the urban and agricultural sectors have been making strides to improve water use e ciency for some time, and environmental water uses provide eco- nomic and social bene ts.  ird, improving the conditions of our degraded aquatic ecosystems will require adaptive management approaches that may reduce the reliability of supplies. And fourth, although some management solutions will provide bene ts to multiple parties, many solutions will involve contentious tradeo s.
440To advance the policy process, California must improve the collection, analysis, synthesis, and dissemination of information to policymakers and the public. To help dispel the myths examined here and support a pragmatic assess- ment of solutions, we suggest some speci c actions:
441• Improve the  ow of existing information: Establishing
442a common understanding among the public and elected o cials requires organizing and disseminating available information, such as broad trends in water use by sector and region and the costs of water supply alternatives (Myths 1, 2, 4).
443• Collect and disseminate new information: To provide a sounder basis for using California’s water laws, e.g., ensuring reasonable use (Myth 7), California must col- lect and document more accurate water use information from the  eld.  is will require changes in the law, to
444require reporting by all surface and groundwater users, regardless of the nature of their water rights—an unpop- ular move for many water users.
445• Expand analyses: Moving forward o en will require signi cant new analysis to develop actionable informa- tion and understanding. Expanded data collection and analysis will be particularly important for improving ecosystem management (Myth 6), integrated water management portfolios (Myths 3, 4), and other purposes. More generally, a better understanding of the value of ecosystem services (Myth 5) and the tradeo s inherent in water policy decisions (Myth 8) can help clarify the policy choices California faces.
446To advance the policy process, California must improve the collection, analysis, synthesis, and dissemination of information to policymakers and the public.
447Information alone will not dispel California’s water myths. In a world of scarcity and tradeo s, myths provide convenient rhetoric for speci c stakeholder interests. How- ever, better technical and scienti c information, analysis, and synthesis will be an essential support to better policy. If the state’s leaders are serious about  nding solutions to Califor- nia’s water challenges, they must not shy away from requiring better reporting and analysis, even if stakeholders resist.
448Moving beyond myth will not end debate; many dif-  cult problems and areas of legitimate disagreement will remain. But when built on solid factual foundations, policy discussions can focus on a more realistic consideration of critical, long-term water management issues.  e challenges are many, and California’s future depends on facing them. ●
449California Water Myths 21
450  www.ppic.org
45122 California Water Myths
452Notes
4531 Moyle, Quinones, and Katz (forthcoming). Nine of the state’s 131 native  sh species have become extinct since California became a state.
4542 Isenberg et al. (2008b) report estimates from the SWRCB that allocations of surface water in the Sacramento and San Joaquin River watersheds amount to roughly eight times the average stream ow and three times the highest stream ow on record.
4553 Orang, Matyac, and Snyder (2008) report that surface irriga- tion use decreased by about 30 percent from 1972 to 2001 and drip/microsystem use increased by about 31 percent, mostly from reduced  eld crop and increased orchard and vineyard planting. Most of the switch occurred from the early 1990s onward. Using Department of Water Resources (DWR) data on applied water use and irrigated acreage, we estimate that water applied per acre has declined from an average of 3.5 acre-feet per acre in the 1960s–1980s to 3.2 acre-feet per acre from
4561990 to 2005.
4574 From 1972 to 1995, the real value of output per acre-foot of applied irrigation water increased by 19.3 percent when using the gross domestic product de ator to measure in ation,
458and by 92.6 percent when de ated using the U.S. Department of Agriculture index of prices received by farmers (Brunke, Howitt, and Sumner, 2005).
4595 DWR (2003, 2005). For information on water banking in the Semitropic Water Storage District, see www.semitropic.com, and for the Kern Water Bank, see www.kwb.org.
4606 Water management practices in other countries with similar climates also suggest ample scope for continued adaptation (Hanak et al., 2009).
4617 To assess the scope for adaptation, we simulated conditions
462in 2050 using the Statewide Agricultural Production Model (SWAP) as presented in Howitt, Medellin-Azuara, and MacEwan (2009a).  e simulation assumes a warm-dry scenario of climate change (28% decline in water supply from all sources), a modest increase in crop productivity relative to past trends (an average 29% cumulative increase for all crops, following Brunke, Howitt, and Sumner, 2005, and Howitt, Medellin-Azuara, and MacEwan, 2009a), and continued growth in demand for high value fruits and nuts. Irrigated acreage falls 20 percent statewide but statewide revenues from agriculture increase by 25 percent relative to 2005 levels.  e decline in water use does lower the
463growth in revenues by about two-thirds relative to conditions without climate change.
4648 Authors’ calculations using DWR data.
4659 For a discussion of the e orts of large urban water utilities, see California Urban Water Agencies (2008).
46610 A separate issue is whether federal crop subsidies create skewed incentives to grow certain crops. Some California crops bene t from these subsidies (notably rice, corn, about half of all cotton, and, indirectly, alfalfa, an input to the subsidized dairy industry). But most California acreage is planted to unsubsidized crops.
46711 Most farmers in California pay the operating cost of bringing water to their farms (even if they—like other water users— generally do not pay the external environmental costs from reduced steam  ows). Water delivered to farmers from the State Water Project, local water projects, and the Colorado River Project is essentially unsubsidized. In addition to its subsidized contractors, the CVP also delivers over 2 million acre-feet to “settlement” and “exchange” contractors, who received water before the CVP, at very low unsubsidized prices.
46812 When Congress passed the original Reclamation Act of 1902 (32 Stat. 388), the subsidies were seen as a way to make the desert bloom. Today, the environmental damage and undesirable e ects of that policy are apparent, and many reclamation projects have bene tted large rather than yeoman farmers (Pisani, 1984; Arax and Wartzman, 2003). But that does not reduce the fair- ness concerns of eliminating water subsidies on which CVP and other federal project farmers have long relied.
46913 Since the 1992 passage of the CVPIA, CVP contractors south of the Delta have received reduced deliveries in most years, as part of a mitigation program to better support salmon runs. Recent regulatory actions to protect delta smelt have caused further reductions (see Villain 3 and Figure 4). Many CVP farmers now base their cropping decisions on the much higher price of water in the water market, rather than on the price of water delivered by the CVP. Since the early 1990s, farmers have routinely paid more than $100 per acre-foot to purchase supple- mental water, and in the 2008 and 2009 seasons, some farmers on the west side of the San Joaquin Valley paid as much as $500 per acre-foot for supplemental water (authors’ communication from farmers and water brokers). In contrast, contract prices for CVP water on the west side range from $25 to $65 per acre-foot.
47014 For this reason, the Central Valley Project Improvement Act broadly authorizes CVP contractors to transfer water.
471 www.ppic.org
47215 For a discussion of the rulings, see Isenberg et al. (2008b).
47316 Moyle et al. (1998); Craig (2007); Sax et al. (2006).
47417 Information from CALFED Surface Storage Investigations
475as reported in DWR (2009a) and U.S. Bureau of Reclamation (2008a, 2008b).  e increased percentage of agricultural and urban deliveries is based on the authors’ calculations (0.33 mil- lion acre-feet per year, relative to average deliveries of 38 million acre-feet per year from 1980 to 2005; see Figure 1).
47618 For example, the San Joaquin River basin already has roughly 8.7 million acre-feet of storage capacity and average annual run- o  of only 6 million acre-feet.
47719  e $340 per acre-foot estimate assumes very high envi- ronmental bene ts and urban water quality bene ts. Without these bene ts, the net cost per acre-foot delivered rises to $616. (Authors’ calculations using data from the U.S. Bureau of Reclamation, 2008b). Even a projected cost of $340 per acre-foot is likely to be too expensive for most farmers.
47820 Some areas (notably Sacramento) would bene t from new surface storage as part of the  ood management system, espe- cially with climate warming and earlier spring runo  (Fissekis, 2008; Zhu et al., 2007). Increased surface storage might also enhance  sh habitat, particularly to support cold water releases and  ows during droughts. However, the details of such envi- ronmental enhancements have yet to be analyzed. For envi- ronmental purposes, it would also be relevant to compare the reoperation of existing or expanded dams with the removal of some dams to allow  sh to move upstream to colder water and spawning grounds.
47921 Even with signi cantly reduced exports, some form of periph- eral canal is likely to be much cheaper for water users (and the state’s economy) than the status quo or ending exports.  e analysis on which this conclusion is based allowed for export reductions by up to 40 percent relative to a baseline of 6 million acre-feet, with costs of a canal of nearly $10 billion in 2008 dol- lars (Lund et al., 2008). If canal costs prove to be substantially more expensive, this would lessen the economic advantages of continuing Delta exports.
48022  ese estimates are wide-ranging and uncertain because of dif- ferences in cost accounting methods (low estimates o en exclude subsidies or assume 100% capacity utilization), the evolving nature of the technology, and lack of experience with large-scale desalination in California (Cooley, Gleick, and Wol , 2006).
48123 Residential use is a component of total urban use (estimated at 201 gpcd in California in 2005—see Figure 2), which also includes commercial and industrial uses.
48224 State Water Resources Control Board (2009) addresses the governor’s call for a 20 percent reduction by 2020.  is goal is re ected in Senate Bill X7 7, signed into law in November 2009.
48325 Stream ow improvements can be signi cant locally even without net savings from conservation measures, because return  ows do not generally return to the same location as diversions.
48426 Agricultural areas draining to the Salton Sea are a major excep- tion, where any use reduction generates net water savings. For some crops (e.g., alfalfa and wine grapes), “stress irrigation”— which strategically waters crops less than is normal—can reduce consumptive use (creating net savings) by 10 to 15 percent.
48527  is issue arises because farmers pay for gross, not net,
486water use. Subsidizing irrigation e ciency improvements o en encourages these acreage extensions. See Scheierling, Young, and Cardon (2006); Ward and Pulido-Velazquez (2008); Hu aker (2008); Evans and Sadler (2008); Clemmens, Allen, and Burt (2008); Pfei er and Lin (2009).
48728 See Bowles and Lee (2007, 2008) for approval delays in Riverside County and Los Angeles Times (2008) and Steinhauer (2008) for a more general discussion.
48829 Of course, this water quality bene t also comes with the sig- ni cant environmental cost of  ooding the Hetch Hetchy valley in Yosemite National Park with reservoir construction in the early 20th century.
48930 A study of environmental water uses for the 2005 State Water Plan found that, in 2000 and 2001 (normal and dry years, respec- tively), the state failed to meet nine important environmental  ow objectives by almost a million acre-feet (Environmental Defense, 2005). And whereas urban and agricultural water use generally varies by no more than 10 to 20 percent between wet and dry years, environmental water use can drop by over 50 percent dur- ing droughts (DWR, 2009a).
49031 Annual losses in net agricultural revenues were estimated at $14.5 million to $38 million, depending on the extent of water marketing. Environmental bene ts included $45 million in increased value of recreation, plus improved water quality for downstream urban and agricultural users, and nonuse value from the restoration of the river (Hanemann, 2005).