californiaKirsten James is the Senior Manager for California Policy and Partnerships at Ceres based in the San Francisco program office. James leads the development of strategy and policy objectives for Ceres’s California-focused work, including the business-led California water campaign, Connect the Drops. James also maintains and builds Ceres’ business and investor partnerships within California and mobilizes them in support of public policies that call for sustainable water management, clean energy and greenhouse gas emissions reductions in California.

Christopher P. Skroupa: Why are companies engaging in water policy?

Kirsten James: Water is an economic imperative yet clean water supplies are diminishing around the world. Every day we hear reports of water crises—from California, to Brazil, to India, and to South Africa. Just last week for example, the UN stated that 23 million farmers are in need of urgent assistance in drought-stricken Southern Africa.

NASA satellite data has shown that the world’s largest underground aquifers are being depleted at alarming rates. Climate change, water pollution and exploding population growth will add further pressure on freshwater resources.

No company or industry, regardless of the amount of water it uses, can thrive without a stable, reliable supply of good quality water. In fact, the World Economic Forum recently identified water crises as the most significant long-term threat to the global economy.

Californiain its fifth year of a drought, exceeding historic proportions, has many forward thinking businesses that are focused on water stewardship, but they also recognize the need to engage in discussion to create a sustainable water path.

These companies understand that a fundamental imbalance between supply and demand has becomes the new normal. They realize that their individual actions are not enough to ensure their long-term growth. Water is a shared resource; even when a company does everything within its four walls to optimize water efficiency, if others drawing from the same watershed do not, that can cause ramifications for everyone.  Smart water policies are essential for long-term water sustainability and companies want to be part of helping to shape them.  Companies have joined Ceres’ Connect the Drops campaign to engage in California policy discussions.

Skroupa: What are the biggest barriers to sustainable water management in California?

James: One of the largest barriers is the lack of data for making sound water management decisions. Historically, California has not had the appropriate monitoring systems in place to know where, when and how much water was used. You could say the water system has been managed like an unbalanced checkbook, with thousands of “withdrawals” and “deposits” from surface water and groundwater supplies, without a sufficient accounting system to understand the overall “balance” of water resources. 

This is beginning to change with the passage of recent laws, such as the Sustainable Groundwater Management Act in 2014. Another law passed last year that authorizes the State Water Resources Control Board to develop measurement and reporting requirements for a substantial number of surface water “diverters” or users (e.g., farmers). However, the state still has a long ways to go.

A second barrier is the improper management of the state’s vast groundwater reserves. Pumping is occurring far faster than replenishment (i.e. through rain, snow melt, flood irrigation practices). In fact, groundwater was allowed to be pumped at whatever volume in California until the recent passage of the Sustainable Groundwater Management Act.

Because groundwater can be pumped without charge, it evokes a third barrier: water is simply undervalued. For example, many water utility pricing schemes, do not incentivize conservation or water recycling projectsencouraging waste. Inefficient pricing signals are a key reason why the state is in dire straits today.

Lack of financing for the creation of resilient water infrastructure is a fourth challenge. A recent Public Policy Institute of California report identified a $2 to $3 billion annual funding gap in five key water management areas, including storm water capture and integrated water management. California voters approved a $7.5 million water bond in 2014 that can help address some of this need, however it does not go far enough.

Skroupa: What are good strategies or policies for overcoming these barriers?

James: California is moving to get the right policies in place. The Senate Bill AB 1755 (up for vote this month) would require the State Water Resources Control Board to create, operate and maintain a statewide data platform that integrates multiple databases on water—helping to solve the problem of inadequate data for management decisions.

Second, implementation of the Sustainable Groundwater Management Act is key. This Act establishes the process for creating management plans for priority basins. For each watershed region, all stakeholders must be at the table for these discussions.

Third, the state must enable municipal water providers to devise water-pricing schemes that address water scarcity and ensure that our water infrastructure funding needs are met. On a limited scale, California does this already, but some water agencies perceive that Proposition 218 ties their hands in creating new pricing schemes. We need to amend Proposition 218.

Last, we need to manage our limited funds to create a more resilient water infrastructure that is focused on smart water projects, such as water conservation, recycling and groundwater recharge. The California Water Commission should ensure that watershed restoration and groundwater recharge projects have the same opportunity for accessing funds from the Water Bond as the construction of additional surface storage (e.g., reservoirs).