27 February 2014

Markets for environmental water

Sari Sommarstrom writes:
I saw your reference to the Scott River Water Trust regarding the PERC article on us.

Yes, you came to Scott Valley to talk about AIA, but the reason it didn’t work here was not that we "didn't like such a transparent mechanism." Our water rights (under 3 decrees) and tributary priorities for where we need the water to help coho juveniles does not really allow for AIA – it's not just a mainstem issue.

But we’ve set our own water market values that vary by year and water year type, with incentive pricing added for adjacent diversions:

2013 Pricing per acre-foot depends on the Number of Contiguous Lessors (#CL)

#CLV. DryDryNormalWet
1 $65 $60 $55 $50
2 $70 $65 $60 $55
3 $75 $70 $65 $60
4 $80 $75 $70 $65
5 $85 $80 $75 $70
6 $90 $85 $80 $75

It's working pretty well, as seen here:

In 2011, it was a wet water year and price went down to $50/a-ft and less water was needed.

With 2014 being very dry, we may need another type of incentive bonus to get the little water available sooner than later.

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