Programs > Water Management > Water Transfers

Water Transfers

The western United States has a scarce and variable water endowment that is locked up in an allocation system that favors early rather than best uses. Today’s heightened appreciation of environmental sustainability requires a reallocation of some portion of previously vested rights. Market transfers of water accomplish that objective through voluntary rather than coercive means.

NHI was an author of the statutory mechanism for reallocating existing water rights to the environment (Water Code Section 1707) and devised the institutional arrangement for such transfers known as the Environmental Water Account, which now accounts for roughly half of all water transferred in California. NHI is currently working on a new toolbox of rights-based transactions in water to meet the next era of management challenges, such as reservoir operation rights, groundwater storage rights, and floodplain inundation rights.

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