As water supplies tighten in California, the value of information and markets increases. We need more information because we need to know what little we have, and we need markets to reallocate what little we have to those who value it most.

That’s why I think it’s a good idea for politicians to allow, promote and facilitate water markets — but only for those buyers and sellers who publicly post verified data on their water supplies (both surface and ground) and consumptive water use.

I don’t care that some district has a lot of water from either source; I don’t care what they use it for or how much they use; I care that those who are selling water are selling sustainable water — not water that they “replace” by mining groundwater.

This carrot and stick idea is an award of the right to sell (money = the carrot) to those who report these data (not being able to sell = the stick). The idea seems a reasonable way to end the widely-acknowledged, ongoing failure to track groundwater use in California — something I bitched about two days ago.

We need to have these data because it’s important to prevent overdrafting groundwater (something bad in general) as well as “stealing” water from neighbors on the same aquifer.

Bottom Line: Markets will not be efficient if sellers do not have clearly-defined property rights.