In Search Of A Drought Strategy, California Looks Down Under

In Search Of A Drought Strategy, California Looks Down Under

10:08pm Aug 21, 2015

Judging by some of the most pessimistic reports from California these days, the place is doomed. You can read all about the folly of trying to build cities in a desert.

Just this week, economists at the University of California, Davis, estimated that water shortages will cost the state's economy $2.7 billion this year. Many farmers are limiting the economic damage by ransacking the environment instead, draining underground aquifers.

But let your mind wander a bit. Think about Australia. It's drier than California even in normal years, and recently, it suffered through a truly epic drought, longer and deeper than California's.

Australia survived, though. It came through that drought "with no discernible decline in the quality of life!" says David Feldman, professor of policy, planning and design at the University of California, Irvine. "I think there's a lesson there."

Feldman and some of his colleagues have taken several trips to Australia in recent years, trying to figure out what that lesson might be. It's an increasingly popular destination, in fact, for Californians who are seeking answers to burning drought questions.

"Australia is seen as a model that has prevailed, and has created a kind of resiliency," Feldman says.

The Australian accomplishment that most impressed Feldman was the level of public awareness about the country's water situation, especially in cities like Melbourne.

"On the billboards, there were actually postings about the level of water remaining in the city's reservoirs," he says.

Australians now treasure their water in a way that most Californians still don't, Feldman says. In Melbourne, in recent years, the average person has been using just half as much water as the average person in LA. You don't see nearly as many of those green, grassy lawns.

A bigger challenge lies outside the cities. The biggest use of water by far, in both Australia and in California, is irrigation on farms. Agriculture is a huge industry in both places.

Some water experts say the single most important thing that Australia did was to create a new way of allocating that irrigation water.

The old system in Australia looked a lot like the one that's still in place in California.

If you were a farmer, and owned irrigated fields, you had the right to use a certain amount of water either from wells or nearby rivers.

"It was seen as something that would just come to your property. It was joined to the land," says Tom Rooney, the founder of an Australian water trading company called WaterFind.

But in the years before the drought began, Australia carried out a giant reset of its water rights.

First, the government put a cap on the total amount of water available for farmers. Then, farmers received shares of that total supply. Each farmer got a share of the Australian water supply. It's similar to the way stockholders own shares of a publicly traded company. And those water shares are no longer tied to any particular piece of land.

"Just like you have a title for your property, we have got a title for water," says Rooney. And just as people can buy and sell shares in a company, people in Australia can buy and sell shares of the nation's water supply.

So when the drought hit, reducing the total amount of water available, this market became a valuable way to distribute this scarce resource. Farms that were growing the most valuable crops were willing to pay more for water. They bought more shares. As the water price increased, other farmers found that selling their water shares was more profitable than growing a crop with it.

The end result: more efficient use of the country's water, and less economic pain.

Richard Howitt, an economist at the University of California, Davis, has been pushing for greater use of water markets in California. "The idea was very heretical a few years ago. I can remember being disinvited from meetings for saying it," he says.

Now, in part because of the Australian example, it's gaining ground, he says.

California probably won't adopt something as radical as Australia's national water market, Howitt says. But it already is getting more common for farmers to trade water in California. And he thinks people will be ready to adopt reforms that at least make it much easier to carry out such transactions.

Rooney must think so. His company, WaterFind, which played a key role in creating water markets in Australia, now is setting up an American subsidiary based in Sacramento.

Copyright 2015 NPR. To see more, visit http://www.npr.org/.

Transcript

AUDIE CORNISH, HOST:

Sometimes when you're facing a crisis, it helps to hear how someone else dealt with a similar situation, say, a really severe drought. That's why scientists from California have been getting on planes to Australia. NPR's Dan Charles explains.

DAN CHARLES, BYLINE: California and Australia have a lot in common. They're both warm, sunny places, relatively prosperous. Australia is drier than California, though, even in normal times. But from 1995 to 2009, it suffered through the so-called Millennium Drought, longer and deeper than anything California has seen. And yet, says David Feldman from the University of California Irvine, Australia came through it...

DAVID FELDMAN: With no discernible decline in the quality of life. I think there's a lesson there.

CHARLES: Feldman and several colleagues have taken several trips to Australia in recent years trying to figure out what that lesson might be. Lots of Californians, in fact have gone on this pilgrimage.

FELDMAN: Australia is seen as a model that has prevailed, has created a kind of a resiliency.

CHARLES: Feldman says the thing that really struck him in Australia was the level of public awareness about water.

FELDMAN: On the billboards, there were actually postings about the level of water remaining in the city's reservoirs.

CHARLES: Australians now treasure their water in a way that most Californians still don't, Feldman says. In Melbourne, the average person has been using just half as much water as the average person in LA, and you won't see nearly as many of those green, grassy lawns. But the biggest use of water, by far, in both Australia and California is for irrigation on farms. Agriculture is a huge industry in both places. And a lot of water experts say the single most important thing that Australia did was to create a new way of managing all that irrigation water. The old system in Australia was a lot like how it still works in California. If you owned a particular piece of land, you had a right to a particular amount of water, either from wells or from rivers.

TOM ROONEY: It was really just seen as something that would come to your property. It was joined to the land.

CHARLES: Tom Rooney is the founder of an Australian water trading company called Waterfind. He says even before the drought hit, Australia had done a giant reset of water rights. The government put a cap on the total amount of water available for farmers, and then farmers got shares of that total amount. A farmer owns a share of the Australian water supply the same way you own shares of a company.

ROONEY: Just like you have a property title or a deed for your property, we have got the same title or deed now for water in Australia.

CHARLES: And farmers can buy and sell those shares. So when the drought hit, water became scarce. The price of each share went up. Farms where water was most valuable because those farms were growing the most valuable crops bought more shares. Other farmers found that selling their water was more profitable than growing the crop. The end result - more efficient use of the country's water and less economic pain. Richard Howitt, an economist at the University of California, Davis, has been pushing for something similar in California.

RICHARD HOWITT: This idea was very heretical a few years ago. And I can remember being disinvited from meetings for saying it.

CHARLES: Now, he says, thanks to the Australian example, it's gaining ground. It is getting more common for farmers to trade water in California, although it's still cumbersome and secretive. And Tom Rooney, whose company helped set up the Australian water market, now is setting up a branch of his water management company in Sacramento. Dan Charles, NPR News. Transcript provided by NPR, Copyright NPR.

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