The final incentive, which is possibly the most powerful, and probably the least accepted so far, is generating a new revenue stream from the transfer of saved water. We’ve deployed SWIIM in the Imperial Irrigation District, and it’s one example we can point to where growers can be paid directly for the water savings they show in their operation. If you’re a grower in Imperial you don’t lose that allocation. It’s voluntary. If you choose to subject yourself to some level of accountability for conservation, at the grower level, and show a reduction–which many of SWIIM’s clients do– you get paid. If they want their full allocation–whether it’s efficient or not–they get it, and Imperial won’t take it back from them.
It’s a real pressure point for growers. When they start conserving, and there’s a question of, “They see I can perform my cropping activities with less water, does that mean they’re going to pull it back in the future in perpetuity?” That’s a real risk, and it needs to be addressed any time you’re talking about these types of programs, or you’re not doing justice to the real fears, and the real risk that you’re exposing growers to under such a system. If you just added a new risk to their table, without any form of compensation, there’s no business person I am aware of who would make that decision. And that’s what sometimes growers are asked to do, when they’re asked to conserve, without any thought to the risk, or any kind of remuneration for conserving that allotment of water.
What we’re offering is a completely voluntary system, and you find a good number of growers participating. If there’s any risk in the permanent loss of allocation, you can forget wide adoption. We see the trend moving in other areas, where irrigation districts are willing to consider these direct-to-grower incentives, and we believe that as this trend continues to mature, and continues to gain momentum, you’ll see more conservation, as long as it comes without the risk of the loss of allocation in perpetuity. More districts are considering direct-to-grower payment.
Why is SWIIM catching on?
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.