We think there is a place for a structured water market in many western jurisdictions, because the alternative–if we do nothing–is the continuation of the regulatory taking of water that has occurred over the last 25 years in the West. So we have to find a better way to protect agriculture’s access to the resource, and a well-structured, somewhat limited water market may be the best way to go. It is not without pitfalls.

Look at the Australian experience. Some policy wonks paint that as the model, but they gloss over the fact that there several farm communities, and many farmers who are completely shut down. Investors came in, bought up the water, and moved it to urban areas, and that’s that. That’s exactly what we’re trying to avoid here.

It’s a tricky conversation. There’s a place here for compensated and incentivized water efficiency and aggregation of conserved water to be delivered to cities or even to neighboring ag water districts. But it has to be done in a way that protects farmers underlying access to the resource. Whether that’s an individual water right held by the farmer, or water right held by the irrigation district serving many farmers.