A State Role in Supporting Groundwater Trading with Safeguards for Vulnerable Users: Findings and Next Steps

In those parts of California where groundwater pumping has long exceeded replenishment, people are striving to bring groundwater basins into sustainable conditions within 20 years, between 2040 and 2042, as the Sustainable Groundwater Management Act (SGMA) requires. In some areas, groundwater sustainability agencies (GSAs) – the local agencies tasked with sustainable groundwater management – are beginning to work with other entities and stakeholders to discuss and experiment with the idea of giving groundwater pumpers allocations – allowances to remove a certain amount of water from a groundwater basin – and allowing them to either use their allocation individually or trade allocations between specified parties. Ideally, groundwater trading could ease the economic disruption of cutting back the overall amount of water pumped from a groundwater basin; growers who have less need for pumping could sell their allocation to others willing to pay for it, helping buyers keep their operations functional while compensating sellers. But the concept of groundwater trading raises many questions: How would wetlands, streams, and other ecosystems fed by aquifers be treated in a groundwater trading program? Would operators of farms who lack the resources of larger neighbors be able to benefit from trading? How might trading affect people who depend upon a household well or communities that need reliable groundwater supplies for homes and businesses? How can GSAs work with local stakeholders to develop, implement, and oversee trading programs that help with sustainable groundwater management? There is a State interest behind all of these questions – and a clear need for a focused discussion about groundwater trading.