Water From the Desert: Entrepreneurs Tap into Unlikely Water Sources

Saturday, January 4, 2014

Water is a scarce and contentious resource in California. Its allocation frequently breeds conflicts over endangered species, land use, and public health. Unfortunately, the state’s water laws and bureaucracies often encourage fighting between competing water users. Water markets offer a way to resolve such conflicts without harming the environment or infringing on the rights of others. As the Cadiz Valley Water Conservation, Recovery, and Storage Project demonstrates, water markets also motivate entrepreneurs to develop new water sources and deliver the scarce resource to the places that need it most.

With less than a foot of rainfall each year, the Mojave Desert is not an obvious place to look for water. An innovative proposal to pump groundwater from the Mojave and move it to nearby Southern California municipalities could change that perception.

The proposal comes from Cadiz Inc., a publicly traded company that owns forty-five thousand acres of Mojave Desert land overlying a large aquifer at the base of two watersheds. The Cadiz Valley Water Conservation, Recovery, and Storage Project—now Cadiz Inc.—would capture groundwater flowing from the watersheds before it filters through the aquifer and is lost to evaporation and salt contamination at nearby dry lakes. Cadiz hopes to capture this otherwise unused water and pipe it to the Colorado River Aqueduct, a direct conduit to the rapidly growing and thirsty municipalities of Southern California.

The Cadiz project has plenty of supporters, most notably Southern California water utilities looking to bolster their supplies and facilitate growth. The company also has several opponents who are using the political process to delay and potentially kill the project altogether. Whether the Cadiz project overcomes these political obstacles or not, the idea exemplifies the sort of entrepreneurial vision that is necessary to maximize the value of California’s scarce water resources.

Read the case study online (PDF).

Reed Watson is the executive director at PERC. His research focuses on the implementation of market-based solutions to natural resource conflicts focusing particularly on public lands, water, and wildlife issues. With Terry Anderson and Brandon Scarborough, he co-authored Tapping Water Markets (RFF Press, 2012).Watson holds a J.D. and M.A. in...
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