Adaptation to Climate Variability and Change: Markets, Policy, Technology, and Information

Project Dates

This project examines the potential for market mechanisms to facilitate voluntary reallocation of scarce water across different uses, specifically from agricultural to environmental purposes. It considers the scope for using reverse water auctions to obtain water for riparian restoration. This includes study of the economic theory behind reversed auctions as well as lessons from applications. It also examines the scope of the USDA Conservation Reserve Enhancement Program (CREP) to complement state and local programs for environmental water acquisitions.

Researchers at the University of California, Riverside have access to proprietary data on prices and quantities of water market trades. A hypothesis of the CLIMAS research is that USDA data on crop rental rates can be used to assess what likely water transfer prices will be. We plan to collaborate in the coming year, combining data to test this hypothesis.