A Case Study on Voluntary Agreements for Water and Habitat in California’s Bay-Delta Watershed
California has increasingly focused on developing voluntary agreements (VAs) with water users to achieve regulatory goals in some watersheds. Ideally, voluntary agreements combine the protectiveness of regulation with the creativity and flexibility of negotiation, potentially achieving better outcomes faster and with less conflict than traditional regulatory methods. These potential benefits include faster implementation of measures, reduced conflict among stakeholders, and the ability to adapt to changing conditions. However, this ideal has only sometimes been realized in practice.
The report, Five Guiding Principles for Effective Voluntary Agreements, was written to help agencies, potential signatories, and the interested public assess proposals for voluntary agreements and forge a viable path toward achieving critical regulatory goals. Written by former chair of the State Water Board Felicia Marcus (Visiting fellow at Stanford University), Nell Green Nylen (Berkeley Law), Dave Owen (UC Law San Francisco), and Michael Kiparsky (Berkeley Law), the report details concern for the voluntary agreements as proposed, and outlines five policy recommendations for moving the process forward to a successful outcome.
The authors note that while the principles are derived from the Bay Delta voluntary agreement process, they can be applied in other similar processes.
The long process to update the plan: 15 years and counting
In 2009, the State Water Board initiated the current round of Bay-Delta Plan updates, and since then, the process has proceeded with delays and irregular fits and starts. The latest round of emphasis on voluntary agreements began in 2011, with efforts to negotiate the current proposed VAs beginning in earnest in 2017. Yet after more than twelve years of negotiations, it remains uncertain if adequate agreements and regulatory backstop for those agreements will emerge.
The state has repeatedly paused long-needed updates while the voluntary agreement process played out, which has, in essence, functioned as a long-term waiver of the increased regulatory protections the Board and others have long agreed are necessary. Meanwhile, native fish populations and ecosystems continue to decline.
Those declines could continue under the proposed VA approach as the VAs also suggest waiting another eight years to see if their approach works before the State Water Board can take remedial action rather than requiring review and course correction on an annual or biannual basis.
Report notes flaws in the Voluntary Agreements
The report outlines concerns with the voluntary agreements as proposed. Among the concerns, voluntary agreements propose scrapping numeric flow objectives in favor of narrative objectives and creating two pathways: the flow and non-flow measures included in the voluntary agreements would form one implementation pathway for signatories to the VAs, and any numeric flow requirements would be included in an “additional” implementation pathway applicable only to entities not covered by a voluntary agreement. In other words, the VAs, as proposed, would not even have any minimum numeric flow requirements. This shift raises concerns about meeting regulatory goals and ensuring adequate ecosystem protection under the Clean Water Act.
The report states: “In sum, leading with VAs as a solution for balancing human and environmental needs for water in the Bay-Delta watershed—rather than first, or simultaneously, pursuing a regulatory pathway to achieve key biological goals—is a perilous strategy that risks continued environmental degradation and legal noncompliance.”
The analysis of the proposed voluntary agreements uses a different baseline than the State Water Board for analyzing Bay-Delta Plan updates. The MOU and term sheet describe the VAs’ potential benefits relative to the 2019 regulatory landscape, which includes Water Right Decision 1641 and the 2019 biological opinions, which, notably, the state has challenged, arguing that biological opinions are insufficiently protective and legally deficient. The September 2023 Draft Staff Report analyzed impacts relative to a baseline based on aspects of recent state and federal water project operations that Board staff considered likely to continue absent Bay-Delta Plan updates. A more appropriate baseline for assessing VA adequacy is comparing likely VA outcomes and the outcomes expected from regulatory pathways.
The report also notes that the proposed voluntary agreement needs more details and leaves significant unanswered questions, such as an adaptive management plan, the adequacy of the flow regime, proposed habitat restoration plans, and information on how such activities would be funded. The proposed VAs include minimal milestones for assessing progress and insufficient opportunities for Board oversight and intervention. They are inconsistent with the Board’s statutory responsibility to regularly review water quality control plans.
Five principles for effective Voluntary Agreements
The report offers five principles to guide the appropriate use and evaluation of VAs. The authors note that these principles would be relevant whenever voluntary agreements are being considered as an option for implementing regulatory requirements designed to achieve biological goals.
Principle 1: The State Water Board must establish a strong regulatory foundation for voluntary agreements. For voluntary agreements to be viable, the State Water Board needs to set the stage with strong regulation, either in advance of or in parallel with voluntary agreement development. This is required to satisfy the State Board’s legal obligation to develop and implement water quality requirements and establish the basis for measuring the adequacy of the voluntary agreements. The absence of a solid regulatory foundation undercuts water users’ incentives to reach an agreement.
Principle 2: Voluntary agreements must achieve comparable environmental outcomes to the outcomes default regulatory requirements are expected to produce. The voluntary agreements aim to provide outcomes for water users and at least equivalent protection for aquatic ecosystems and water quality; otherwise, the VA would unacceptably reduce legally required protections. Relatedly, the level of protection that the default implementation pathway would provide for particular regulatory requirements cannot be viewed as the state’s initial negotiating position, to be bargained downward during negotiations. Instead, it is the state’s baseline responsibility to ensure that VAs also achieve at least that level of protection.
Principle 3: Voluntary agreements must articulate clear, specific biological goals and measures of success. VAs need to be structured around clear goals with appropriate performance measures for assessing progress and success to ensure that they achieve equal or better environmental outcomes. In the Bay-Delta context, these will include specific biological objectives and measurable indicators related to outcomes for native fish populations. Achieving those goals is the state’s legal responsibility, and such achievement must start with understanding and articulating the outcomes to be achieved.
Principle 4: Voluntary agreements and actions taken under them must be well-supported by the best available scientific information. The proposed VAs and assessment of those VAs must use the best available scientific information about relevant species and ecosystems. The best available scientific information will necessarily change over the course of implementation, so the best available scientific evidence must inform assessments and course corrections throughout the implementation of the voluntary agreements.
Principle 5: Voluntary agreements must include robust and transparent accountability mechanisms. Voluntary agreements must include provisions for monitoring, assessment, and adjustment and be explicit about responsible parties, timelines, and the consequences for what happens when goals aren’t achieved. Voluntary agreements need regular public reports, reviews, assessments, and a clear path for the State Water Board to intervene when necessary.
In conclusion …
The report argues that the VAs must meet basic standards and cannot be substituted for regulatory requirements. The negotiation of successful, durable VAs depends directly on the existence of a solid regulatory foundation to drive agreement and assure implementation.
“In this policy paper, we have articulated basic principles that should guide the state’s present and future efforts to negotiate effective VAs, review VA adequacy, and provide effective oversight. The most important of these principles is that VAs can complement but not replace underlying regulations.
VAs can seem like an attractive alternative to regulatory business as usual. But they will only work if the parties commit to a viable structure that combines the desired flexibility with appropriate clarity and limits. The principles described in this policy paper give some direction for developing effective VAs. If state negotiators—or state regulators—ignore these principles or give them short shrift, they will fail to uphold their responsibilities to ensure adequate environmental protection and support effective resource management. The good news is that the principles in this policy paper offer a pathway for success.”
Click here for the report.
