UC Berkeley CLEE Report – Trading Sustainably: Critical Considerations for Local Groundwater Markets Under SGMA

UC Berkeley CLEE

The 2014 Sustainable Groundwater Management Act (SGMA) calls for the creation of local Groundwater Sustainability Agencies (GSAs) and tasks them with developing and implementing Groundwater Sustainability Plans (GSPs) to achieve sustainable groundwater management. Because SGMA allows GSAs to assign groundwater extraction allocations to pumpers within their jurisdictions and to authorize transfers of these allocations under certain circumstances, it potentially opens the door for the development of local groundwater markets. However, SGMA does not provide guidance about when such markets might be useful and appropriate management tools. A report, Trading Sustainably: Critical Considerations for Local Groundwater Markets Under the Sustainable Groundwater Management Act, by the Wheeler Water Institute within the Center for Law, Energy & the Environment at the UC Berkeley School of Law outlines a set of considerations designed to help decision makers and stakeholders evaluate whether and under what conditions a local groundwater market might be a viable tool. Considerations for developing a groundwater market are organized into three groups:

  • Foundational considerations – These considerations relate to measuring groundwater extractions, setting overall pumping limits, and establishing individual groundwater extraction allocations.
  • Market-specific considerations – These considerations relate to market goals, groundwater rights questions, the potential impacts of trading, trading rules, and the trading system and transfer approval process.
  • General considerations – These considerations relate to establishing and maintaining a monitoring system, oversight and enforcement authority to ensure program compliance, evaluate program effectiveness, address problems by making needed changes, and maintain transparency and public engagement throughout.

The report also discusses legal ambiguities and other sources of uncertainty that may present challenges for those seeking clarity about market programs.

The Trading Sustainably: Critical Considerations for Local Groundwater Markets Under the Sustainable Groundwater Management Act report is available here.

More information may be obtained from Nell Green Nylen, Senior Research Fellow, Wheeler Water Institute, Center for Law, Energy & the Environment at ngreennylen@berkeley.edu.