by Robin Meadows
Water diversions can harm aquatic ecosystems, riparian habitat, and beaches fed by river sediment. But the people who use water don’t bear the cost of this ecological damage.
“The public pays for it,” says Karrigan Börk, a University of California, Davis law professor who has a PhD in ecology. He is also Co-Director of the California Environmental Law and Policy Center and an Associate Director of the UC Davis Center for Watershed Sciences.
Börk presents a new solution to this problem in a recent Harvard Environmental Law Review paper. His idea was sparked by the fact that developers are required to help pay for the burden that new housing imposes on municipal services.
To likewise link water infrastructure and diversions with their costs to society, Börk proposes requiring water users to pay towards mitigating the environmental harm they cause. This work won the 2024 Morrison Prize as “the most impactful sustainability-related legal academic paper published in North America” published in 2023.
To learn more, Robin Meadows spoke with Börk about how this solution would work, examples of similar approaches already established in the Western water world, and ways of putting this approach in place in California. This conversation has been edited for conciseness and clarity.
Your paper is a bit daunting for those of us who aren’t lawyers. Is there a simple way to explain your argument?
Karrigan Börk [laughing]: Nobody reads legal papers—I can give you the five-point “too long, didn’t read” summary:
- Water infrastructure and use impose a lot of costs.
- These costs are externalities—that is, they are external to the person building the infrastructure or using the water—and the public pays for them.
- These costs can sometimes be mitigated with careful water management or engineering solutions.
- Exactions—fees or other conditions imposed to offset public costs when issuing development permits—could be applied to water rights. This would make mitigation costs internal to those who divert or use the water.
- Water permitting agencies should impose exactions on new and existing water rights based on the public costs associated with water infrastructure and use.
How did you get this idea?
We spend so much time arguing over constitutional issues of water law because there isn’t always clarity. I was looking around at exactions, which come from a land use context and have a lot of legal clarity.
Developers need a permit from the city to build new housing. If a development goes in, it imposes costs on the city such as more wear and tear on roads, and needing more schools for students and more police officers. These costs are externalities to developers, meaning they don’t pay them and don’t consider them when deciding whether to build a new development.
To impose some of the public costs of development on the developers, cities can condition permits to include exactions, which can include contributing money toward public costs or a piece of their property for a park. Exactions provide dedicated resources to mitigate the problem developers create.
Everyone agrees that property rights in law are strong, but the courts are very clear that exactions are OK. They just have to be closely related to and roughly proportional to the harm of the proposed development. In a 2013 Supreme Court case, for example, Justice Samuel Alito noted, insisting that landowners “internalize the negative externalities of their conduct is a hallmark of responsible land use policy, and we have long sustained such regulations against constitutional attack.”
I thought, maybe we can bring some clarity here to water use regulation. I don’t know why we wouldn’t be able to have exactions as a condition for water use permits—if we could focus on that instead of fighting over water rights, we’d have much better water management. We know from other studies that people use less water when they pay more for it. Exactions would make water users help pay for mitigation and, because these external costs would be internalized, exactions would encourage people to use less water.
Why do you think this approach would work?
By looking in the literature and asking my colleagues, I found several water use-related examples in the West that function like exactions. They aren’t called exactions but they work the same way.
Upper Colorado River Endangered Fish Recovery Program: One example is in the upper basin of the Colorado River, where water users pay for their environmental impacts. The Colorado River has four fish that are found nowhere else—the humpback chub, bonytail chub, razorback sucker, and Colorado pikeminnow—and are super adapted to giant flows in the spring and low, warm flows in the summer.
When the dams went in, they disrupted that pattern and eventually the U.S. Fish and Wildlife Service (USFWS) listed these fish as endangered under the federal Endangered Species Act.
USFWS initially said they wanted Upper Colorado water users to replace their diversions one-to-one but ultimately, in the late 1980s, negotiated a compromise called the Upper Colorado River Endangered Fish Recovery Program.
New, large diversions created environmental water banks to replace the water they take out, giving it back when the fish need it, for example, during spawning. New small diversions pay fees that are tied to permits and that fund habitat improvements, conservation hatcheries, and other recovery efforts.
Much like exactions, these water permit requirements address the external costs of the fish becoming endangered. The fees fund about half of the recovery program, and two of the four fish species are seeing gains: the humpback chub and razorback sucker have done really well and are getting downgraded to threatened.
Oregon Conserved Water Program: Another example is in Oregon. Permits to use water are tied to a time and a place but, under the state’s Conserved Water Program, users can conserve water and then use it elsewhere or sell it. The program accelerates permitting, creates a separate water right for the conserved water, and allows for its transfer.
The similarity to exactions is that as a condition of these conserved water permits, the state gets at least one-quarter of the water that users save. It’s working—it’s putting water back into rivers in Oregon. It’s a creative approach!
Mono Basin Stream and Stream Channel Restoration Plan: A third example is in California’s Mono Basin, where Los Angeles diverted so much water from tributaries to Mono Lake that channels were overgrown and riparian wetland was lost. The habitat was just wrecked.
In a famous 1983 public trust case, the California Supreme Court ordered reconsideration of Los Angeles’s water right. The California State Water Resources Control Board eventually reevaluated Los Angeles’s right to this water in the Mono Basin Decision. The Water Board said that to keep using water, Los Angeles had to take less water and do habitat restoration.
Again, this looks like an exaction. As a condition of its permit for continued water diversions, the Water Board required Los Angeles to pay some of the external costs of environmental harm it caused.
How could exactions be tied to permits for water use in California?
It’s pretty easy for new water rights because the state Water Board already has to consider the public interest when issuing water rights, which includes evaluating the public costs. That doesn’t do us a whole lot of good for states in the West, though, because most of the water is already spoken for. In California, most water is allocated by decisions people made more than 110 years ago. The majority of water use is governed by pre-1914 water rights and riparian rights, neither of which need a permit.
That said, the state Water Board reexamines rights when, for example, water use is curtailed because of drought, or when protecting water uses under the Porter-Cologne Act, which projects water quality and beneficial uses. This might include examples like the Bay-Delta Water Quality Control Plan.
Reductions in use ordered as part of these actions could make water users want to participate in exactions, encouraging them to say, “Maybe I can do something that allows me to keep more water.” It’s not just more water that is needed to mitigate ecological damage. It’s functional flows― more water on the right habitat, at the right time, doing the right thing. Exactions could be part of that equation.
What are you working on now?
One of the worries cities have about exactions is that the developer will build crummy infrastructure. If the developer goes out of business, the city will bear the cost of ripping out and rebuilding that infrastructure.
To protect against this, cities require performance bonds for exactions. The bonds guarantee that, for example, the roads a developer builds as a condition of their permit will last a certain number of years.
In California, a group of state agencies, environmental interests, and water users is negotiating voluntary agreements, where water users commit to protecting and restoring aquatic habitat. The water users hope that, in exchange, the state will allow them to use more water than it would otherwise. But voluntary agreements give water users the benefit of exactions―that is, permits to use water―while putting the risk of mitigation failure on the public.
Voluntary agreements could include performance bonds that hold water users responsible for their environmental mitigation. This risk reallocation should lead to better outcomes for ecosystems.
