August 7, 2015
By Martin Merz, Sustainable Water Markets Fellow
University of California, Santa Barbara’s Bren School of Environmental Science & Management
As part of the Water for Food Institute’s policy and social innovation programing, visiting scholars from the University of California, Santa Barbara’s Bren School of Environmental Science & Management are working with the institute to research innovative approaches to water management, taking into account potentially controversial situations and the need to understand many stakeholder perspectives — from farmers to state officials.
Many rivers and creeks in the Western United States are over-allocated, with consistently more demand on their waters than is available. This can lead to several issues between competing users, especially in years of drought: transboundary water conflicts, threats to public water supply and perilous conditions for species that depend on river habitats. Various mechanisms have been used to address these challenges, which include interstate compacts, state and federal Endangered Species Acts and local water management institutions. But when these mechanisms are absent or don’t do enough to preserve streamflow, local water trusts and environmental nonprofits have acted to supplement streamflow for wildlife.
Our team, made up of five master’s students from the UCSB Bren School of Environmental Science & Management, is working under the guidance of the Water for Food Institute’s Nicholas Brozovic and Richael Young to investigate the challenges water trusts and other stakeholders face when balancing competing water demands, and to explore whether market-based mechanisms can benefit stakeholders and instream flow targets.
In practice, leasing water rights to supplement streamflow requires outreach, negotiation and detailed knowledge of the laws and frameworks within which instream flow leases and contracts can occur, which vary by state and region. These can all be thought of as transaction costs. Furthermore, navigating through erratic hydrologic cycles, and depending upon fluctuating donor support leads to great instability for water trusts; as a fixed sized business, having inconsistent funding and different roles to play in the spectrum between extreme drought and extreme wet makes for a great challenge.
As part of our customer discovery research, team member Patricia Song and myself spent a month of our summer traveling the West to conduct interviews with high level water trust practitioners, water rights holders, state officials, and farmers, among others. We traveled to Nebraska, Colorado, Arizona and Montana.
On June 15, we kicked off a week-long visit in Nebraska. Our experience was a fascinating and personalized short course on the state’s water management and instream flow issues. We first met with University of Nebraska-Lincoln agricultural economist Karina Schoengold, who provided background on Nebraska water issues, along with different crop values and rights structures that might benefit from environmental lease markets. To gain the perspective of Nebraska’s environmental NGOs, we met with the Nature Conservancy’s Jason Skold and Audubon Nebraska’s Marian Langan. Those conversations helped us understand the legal framework of instream flow transactions and the role NGOs can play within this framework and political climate.
The Nebraska Game and Parks Commission and the state’s 23 Natural Resources Districts are the only entities allowed to hold instream flow permits, and the Nebraska Department of Natural Resources must approve such requests. Meeting with representatives from these entities was important for our project. The Nebraska Game and Parks Commission’s Gene Zuerlein described the Commission’s efforts to gain instream flows and the heavy opposition they often face, as well as how the Commission works with other organizations to push the issue forward. Glenn Johnson from the Lower Platte South Natural Resources District in Lincoln discussed the conjunctive management of surface and groundwater, which became Nebraska’s method of water management in 2004, and how his organization considers and manages for instream flows. We also had the opportunity to meet with water experts at the Twin Platte Natural Resources District. We enjoyed hearing their perspectives and learning about agricultural diversions and irrigation systems. To wrap up our Nebraska visit, we met with Jim Schneider and Jen Rae Wang from the Nebraska Department of Natural Resources to discuss the entities in Nebraska that are responsible for instream flows, and the various regulations and incentives surrounding this issue.
Following our trip, we have a deeper understanding of how water trusts operate and the dynamics between the different agencies. Visiting field sites and conducting interviews have helped us identify common themes, opportunities and barriers to instream flow lease transactions. We have also learned how to work with various stakeholders to understand their viewpoints, needs and concerns regarding water use. As we continue our research this summer, we hope to connect the dots further and envision a platform or product that will best fit the needs of water rights holders, water trust practitioners and others in the leasing process.
In the fall, we will reconvene to synthesize our interview findings and work to identify strategic case studies for which we can simulate dry year instream flow lease markets. The case studies will help us determine which characteristics may lead to a successful market platform, such as staff size, funding stability, geographic scope and current market activity of a water trust. They will form the basis for a business model, illuminating the water trust and target basin characteristics and scenarios within which an online lease market platform might be an appropriate tool for water trusts. Our team plans to present our findings at the Bren School in the spring.
On behalf of the group, I wish to thank the Water for Food Institute for its mentorship during this project. The institute’s expertise on water markets and helpful coordination served to advance our research – and make for a valuable visit to Nebraska.
Tags: education, Nebraska, surface water