California is in the fourth year of a severe, hot drought—the kind that is increasingly likely as the climate warms. Although no sector has been untouched, impacts so far have varied greatly, reflecting different levels of drought preparedness. Urban areas are in the best shape, thanks to sustained investments in diversified water portfolios and conservation. Farmers are more vulnerable, but they are also adapting. The greatest vulnerabilities are in some low-income rural communities where wells are running dry and in California’s wetlands, rivers, and forests, where the state’s iconic biodiversity is under extreme threat. Two to three more years of drought will increase challenges in all areas and require continued—and likely increasingly difficult—adaptations. Emergency programs will need to be significantly expanded to get drinking water to rural residents and to prevent major losses of waterbirds and extinctions of numerous native fish species, including most salmon runs. California also needs to start a longer-term effort to build drought resilience in the most vulnerable areas.

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Building Drought Resilience

The ongoing drought has served as a stress test for California’s water management systems, and continuing drought will test them further. Managers and businesses are employing an array of tools and strategies. Many of these have helped California reduce drought impacts. Others will need refinement and further investment.

Current drought actions fall into three general categories: those that are working well and may need minor improvements; those that are still works in progress, requiring support and refinement; and those that require substantial policy reforms or investments.

What’s Working

  • Diversified water portfolios: Historic investments in diversifying water supply sources and managing demand have yielded great benefits. Further investments could be aided by streamlined permitting, as with recent CEQA exemptions for recycled wastewater standards.
  • Regional infrastructure: Coordinated infrastructure development among multiple agencies has built regional diversity in water supplies and reduced vulnerability.
  • Coordinated emergency response: Unprecedented coordination among state, federal, and local agencies has improved emergency response and reduced the economic costs of the drought.

Works in Progress

  • Mandatory conservation: Although highly successful at reducing urban use, statewide conservation mandates can have unintended economic and social consequences if they are not implemented with some flexibility. They can reduce local financial capacity and appetite for new supply investments, and they can cost jobs if they are not considerate of business water use. They can also convey an overly negative impression about urban water conditions in the state—potentially dampening future business investments.
  • Water pricing: Many urban utilities have encouraged conservation with tiered water pricing, but they now face significant uncertainty about the legality of these rates. Low-income households are vulnerable if utilities make up for lost water revenues with higher fixed monthly fees. Legal reforms to Proposition 218 may be needed to support both efficient and equitable pricing.67
  • Rural community supplies: Some domestic and small community water supplies will always be vulnerable during droughts, and emergency response has improved. But the mechanisms to report dry wells should be strengthened and response times shortened for getting water to affected residents. Continued progress is also needed to provide long-term safe water solutions to rural communities.
  • Groundwater management: Groundwater is a vital drought reserve, and extra pumping has reduced the economic costs of the drought. The new Sustainable Groundwater Management Act will boost the long-term drought resilience of California’s farming sector and reduce negative impacts of unsustainable pumping. State and federal support for key technology and tools—such as groundwater models and well metering—can enable locals to move faster in implementing the law.68 Addressing acute short-term impacts of pumping, such as infrastructure harm from sinking lands, may require charging new pumping fees or limiting new wells in some areas.
  • Water trading: Water trading has helped reduce the economic costs of the drought so far, and it will be vital if the drought continues. But the market is not sufficiently transparent or flexible. Processes for approving trades are complex and often opaque. Little information is publicly available about trading rules, volumes, or prices.69
  • Waterbird management: The risks to waterbird populations can be reduced by coordinating the management of water on refuge wetlands and flooded farm fields. State and federal investment in creative approaches, such as programs that pay farmers to flood fields, can yield great benefits with limited water and funds.

Difficult Work Ahead

  • Improving the curtailment process: In principle, California’s seniority-based water-rights system is designed to handle droughts. But making it work well will require better information on water availability and use, clearer state authority, and more effective enforcement.
  • Modernizing water information: To facilitate all facets of water management—including trading, curtailments, and environmental flows—the state will need to make major investments in the collection, analysis, and reporting of water information.70 This includes updating models to consider the extreme temperature and flow conditions of modern droughts.
  • Managing wildfires: The stopgap measure of suppressing fires during drought may work in the short-term, but a long-term strategy of improved forestry and fire management—with strong federal participation—is needed.
  • Managing surface water trade-offs: The state and federal governments have not gone through the difficult exercise of defining and prioritizing objectives among competing uses of scarce supplies, especially when managing reservoirs. The difficulties of managing Shasta Reservoir to protect wild salmon highlight the need to do better forecasting and build in a margin of safety for environmental flows.
  • Avoiding extinctions of native fish: Continued drought will likely lead to multiple extinctions of native fish species in the wild, and California lacks a plan to address this. More cautious strategies to save reservoir water for environmental flows may help, and purchasing water to boost flows could reduce conflicts. It may also be prudent to make immediate investments in conservation hatcheries.
  • Building environmental resilience: Beyond stopgap measures, California also needs to invest in improving the capacity of our native biodiversity to weather droughts and a changing climate. This requires a plan and the funding to put it into action.71


Since statehood, California has developed water supply infrastructure and supporting laws to manage water scarcity during droughts. Yet the intensity and duration of the ongoing drought is stress-testing the state’s management systems. In many respects, this drought is California’s dry run for a drier, warmer future.

Californians at all levels have shown a commitment to reducing the economic, social, and environmental harm from the drought with many successes. Yet if the drought continues for another two to three years, the challenges will grow. Addressing the most pressing threats will require stopgap measures—for instance, delivering drinking water supplies to rural residents with dry wells, setting up conservation hatcheries to prevent fish extinctions, and making spot decisions about tough trade-offs. But the state also needs to leverage the lessons of the past four years to build longer-term drought resilience. That way, we will be more prepared for future droughts and have less need for stopgap, emergency solutions.

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