Association for Public Policy Analysis & Management

Groundwater table levels are in deep despair in California with seawater intrusion, subsidence, and dry wells. Water reliant stakeholders panic due to groundwater allocation restricts from the state 2014 Sustainable Groundwater Management Act (SGMA). In Ventura County, farmers, the Fox Canyon Groundwater Management Agency, the Nature Conservancy, and California Lutheran University have formulated a tool to comply with regulations. The Fox Canyon Groundwater Pilot has incorporated a transparent groundwater trading network into the local farming community. Data was gathered through interviews with the most prominent water stakeholders throughout Ventura County. The pilot has exemplified that groundwater trading: a. provides flexibility to farmers in business; b. encourages engagement between stakeholders; c. incentivizes resource conservation; d. distributes water to minimize seawater intrusion; and e. encourages new water supply innovation. With the completion of phase I and II of the pilot, a permanent market is underway with solutions for a more effective market. The first solution is to educate all stakeholders on the water market before launching the program. The second solution is to establish the SGMA regulations prior to setting up the market. The third solution is all stakeholders must benefit in the market without compromising. The fourth solution is that urban users should be incentivized into the market. The fifth solution is to establish more funding for the groundwater management agency. The sixth solution is to add environmental users into the market to support Groundwater Dependent Ecosystems (GDE). The seventh solution is to add adjacent basins into the market to expand the pilot. Water markets are a tool to bring California counties complying with SGMA regulations into sustainability. The Fox Canyon Groundwater Pilot exemplifies the first California County that incorporated a trading scheme to aid stakeholders with new regulations.