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Open Access Publications from the University of California

Water Transfers and the Imperfect Water Industry in California


Market ideology often obscures public choices about rea­ sonable and beneficial uses of water. Current debates in California water policy reflect the tug of war between the potential efficiency and flexibility of water transfers (often called ·water marketing") and the desire for a stable and re­ liable California water system. The water industry's para­ mount concern remains the protection of the reliability and stability of operations of its complex socio-technical sys­ tems for delivering water, particularly at a time when envi­ ronmental concerns over instream uses of water are increas­ ing. Loosening restrictions on water transfers while protecting appropriative rights is a flexible approach to meeting long-term water demand. But given such market imperfections as oligopoly and redistributive land rents, state regulation of transfers of California's most political natural resource-for example, through a drought water bank-remains likely in the future.

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