Unexpected water reallocations

Read aguanomics http://www.aguanomics.com/ for the world’s best analysis of the politics and economics of water Damian used to blog with me here. He just published a paper that’s worth your time

Park, Damian (2017) “California water reallocation: where’d you get that?” Natural Resources Journal 57:183.

Abstract: When thirsty, Californians often avoid going to the market for more water. Instead, they might borrow some from their rich neighbors, they might sue them or more commonly, they simply take more from users without much of a voice (e.g. the fish or future generations). These alternatives are often superior to using markets.* Within markets, a surprising detail emerges – it is uncommon for farmers to fallow fields in order to sell water to another user. Rather, many water transfers are structured so sellers can have their cake and eat it too. While some of these transfers rightly bring about jealousy and criticism, they likely do facilitate efficient water use. In discussing these points, I provide a more holistic description of how water users reallocate water as well as a richer understanding of how California’s water market actually works.

* My interest in this paper comes here, where you see that political feasibility trumps economic efficiency and/or social justice. That’s a major point in my paper on desalination.