California Water Misallocation Report Released

A new working paper from the National Bureau of Economic Research, 'Measuring Water Misallocation in United States — California,' reveals that United States — California's water system is inefficient and ill-suited for future climate realities. The study, using satellite imagery and crop data, shows water is more valuable south of the United States — Sacramento–San Joaquin River Delta but difficult to move due to legal and physical constraints. Annual water trading is negligible, and water is locked into long-lived crops, limiting reallocation. This inefficiency is linked to inequity, as senior water rights holders are protected while low-income communities and communities of color disproportionately face shortages and contamination. The report sparks a debate between focusing on efficiency (e.g., new conveyance like the Bethany Reservoir Pumping Plant and expanded water trading) and justice (prioritizing human needs, tribal rights, and protecting vulnerable communities). David Sathuluri and Marco Tedesco co-authored an opinion piece discussing these findings.