From the PPIC:
Water marketing is an important tool for managing scarce supplies.
- In California’s water market, buyers and sellers trade water through short- and long-term leases as well as permanent sales of their water rights. Trading enhances flexibility in water management.
- Short-term transfers lessen the economic impact of shortages during droughts by shifting water to activities and places where the lack of water will be more costly. Long-term and permanent transfers accommodate geographic shifts in water demand as the economy changes and the population grows.
- Today, most trading involves surface water. Some groundwater trading occurs within specially managed basins; this is likely to expand as groundwater users in other basins implement the Sustainable Groundwater Management Act (SGMA).