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Recommendations to Ensure Drinking Water Protections for Communities ©CWC 2020

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Recommendations to Ensure Drinking Water Protections for Communities ©CWC 2020 Groundwater Markets: Recommendations to Ensure Drinking Water Protections for Communities ©CWC 2020. This work may be distributed under the terms of the Creative Commons Attribution License (CC- BY). The Community Water Center requests that you provide appropriate credit on all reprinted materials. Acknowledgments This white paper was made possible through generous support from Proposition 1 Sustainable Groundwater Planning grant funding from the California Department of Water Resources as well as with the support from the Water Foundation. Thank you to the many individuals who contributed their time and expertise to the development of this white paper including: Community Water Center: Debi Ores Adriana Renteria Self-Help Enterprises: Liesbet Olaerts The Nature Conservancy: Sandi Matsumoto Environmental Defense Fund: Christina Babbitt Ana Lucia Garcia Briones Ann Hayden Union of Concerned Scientists: Coreen Weintraub Thanks to Kelsey Hinton for formatting and layout. Table of Contents Introduction - Groundwater Markets and Drinking Water Sources ................................................ 1 What is a Groundwater Market? .................................................................................................. 3 Understanding the Potential Harms and Benefits of a Groundwater Market ................. 3 Groundwater Allocations and Considerations for Equitable Distribution of Resources .......... 6 Tradable Allocations ........................................................................................................................ 8 Accounting for Adequate Community Growth ........................................................................ 8 Best Management Practices ..................................................................................................................... 11 Tools to Protect Community Water Sources ............................................................................. 11 Incentivizing Projects to Promote Drinking Water Resilience ............................................ 12 Monitoring Networks ..................................................................................................................... 13 Establishing Triggers and Implementing Solutions ............................................................... 14 Stakeholder Engagement ............................................................................................................. 18 A Wrap-Up: Recommendations and Closing .................................................................................... 20 Appendix ..................................................................................................................................................... 24 Introduction - Groundwater Markets and Drinking Water Sources Through the implementation of the Sustainable historical pumping patterns through the many Groundwater Management Act (SGMA), local management actions and projects that will be groups called Groundwater Sustainability implemented over the next 20 and more years. Agencies (GSAs) are tasked with managing their One potential management action and project, and groundwater basins sustainably and addressing focus of this white paper, is to develop a system to groundwater overdraft — which occurs when more trade groundwater pumping allocations.2 Though groundwater is pumped out of the aquifer than is the trading or transfer of surface water is a fairly replenished either by rain, snow melt, or through common practice, trading groundwater is a recharge basins. In order to do this, GSAs will newer endeavor in California that requires the develop Groundwater Sustainability Plans (GSPs development of thoughtful frameworks and rules or plans) that specify how they will sustainably to ensure that all groundwater-dependent manage groundwater in their areas. communities are protected.3 Under SGMA, sustainability is defined as avoiding In the Southern San Joaquin Valley, over 95 unreasonable impacts of these six undesirable percent of residents depend on groundwater for at results: chronic lowering of groundwater levels, least part of their drinking water supply and many degraded water quality, depletion of communities are entirely reliant on groundwater as interconnected surface water, reduction of their drinking water source.4 groundwater storage, seawater intrusion, and land subsidence. GSPs will address three major components: 1) description of the plan area and In the Southern San Joaquin Valley, basin setting, 2) defining sustainability criteria, over 95 percent of residents depend on and 3) projects and management actions which groundwater for at least part of their will help the GSA achieve the goals indicated under sustainable criteria, including projects, drinking water supply and many management actions, mitigation measures, and communities are entirely reliant on monitoring plans.1 GSPs will be submitted in 2020 groundwater as their drinking water and 2022 (depending upon basin prioritization) to the Department of Water Resources (DWR) who source. will be reviewing and approving or disapproving Further, California’s Human Right to Water law GSPs. states that “every human being has the right to safe, clean, affordable, and accessible water SGMA is likely to result in significant changes in adequate for human consumption, cooking, and 1 See www.groundwaterexchange.org for more information on 3 While this paper solely focuses upon the impacts to drinking the components of a GSP (URL: https://groundwaterexchange water supplies, markets must also be designed to protect other .org/developing-a-groundwater-sustainability-plan/). beneficial uses such as groundwater-dependent ecosystems. 2 The first pilot groundwater market under SGMA was launched 4 Carolina Balazs et al. Social Disparities in Nitrate-Contami- by Fox Canyon Groundwater Management Agency in Ventu- nated Drinking Water in California’s San Joaquin Valley, Environ- ra County in 2019. For more information, see: SGMA’s First mental Health Perspectives, Vol. 119, pgs. 1272-73 (2011) (URL: Groundwater Market: An Early Case Study from Fox Canyon https://perma.cc/JX8V-DHXC). (URL: https://groundwaterresourcehub.org/groundwater-mar- 5 Water Code §106.3. kets/). 1 - Groundwater Markets: Recommendations to Ensure Drinking Water Protections for Communities Figure 1 Source: Environment and Climate Change Canada sanitary purposes”.5 While this does not apply rights to pump groundwater or surface water sup- directly to GSAs, it does apply to DWR. plies to meet basic needs. Therefore, before any management action or project is implemented, including a groundwater The purpose of this white paper is to: market, it is important for GSAs to consider the possible implications and proactively plan to avoid 1. Provide an overview of some of the major ele- or mitigate impacts to communities dependent on ments to consider when developing a well-de- groundwater supplies. signed groundwater market. Historically, many low-income rural communities 2. Introduce tools to help community stakeholders have struggled with access to safe and affordable engage in the market design and implementa- drinking water and a well-run market can tion process. assist, though not solve, in addressing this issue. However, negative impacts are also possible 3. Hold decision makers accountable in develop- and must be avoided or mitigated. Often those ing groundwater management strategies that most vulnerable to the negative impacts from are protective of community needs. groundwater management decisions are those reliant upon shallow wells, including communities This white paper prioritizes key recommendations reliant upon domestic wells. for the protection of drinking water sources where groundwater markets are adopted. These same stakeholders often lack the financial resources to secure additional sources of water through means such as by purchasing additional Groundwater Markets: Recommendations to Ensure Drinking Water Protections for Communities - 2 groundwater users, ensuring that stakeholder input What is a Groundwater is solicited and actively considered in the design of Market? the market. Groundwater markets, also referred to as Unlike surface water markets where “groundwater exchanges,” “groundwater trading,” surface water is traded and physically or “groundwater sharing,” facilitate the transfer of groundwater between users. Compared to top- conveyed via canals and ditches from down regulatory approaches, trading programs can one water user to another, groundwater provide groundwater users with more choices and markets allow users to trade the ability flexibility on a voluntary basis to meet groundwater management objectives. to pump additional groundwater— not necessarily physically trading or moving To develop a groundwater market, GSAs will first groundwater. establish a total cap on pumping for their entire jurisdiction that is related to the sustainable yield How groundwater markets impact drinking water of the basin, which is the amount of groundwater supplies depends upon how the market and the that can be pumped without causing undesirable GSP as a whole are structured and implemented. results. Once the sustainable yield and total cap A poorly designed market can result in negative of pumping is established, the GSA would then impacts to both quantity and quality of supply, assign individual pumping allocations defining whereas a well-managed market can not only how much groundwater each user in their GSA protect but improve drinking water
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