American Journal of Agricultural Economics Advance Access published July 15, 2011
DAVID A. NEWBURN, NICHOLAS BROZOVIC, AND MARIANO MEZZATESTA Conclusion and Policy Implications
We analyze the potential effects of ESA listing on the joint decision of land use and water management using parcel-level data in coastal California. Our empirical results are distinct from the perverse effects of ESA listing found in earlier studies that focus exclusively on land use and emphasize preemptive habitat destruction by landowners (List,Margolis,and Osgood 2006;Lueck and Michael 2003).
In the period after stricter regulations, our results suggest that agricultural producers may have shifted the timing of their water use away from winter storage of surface water toward summer groundwater pumping and riparian use during periods of peak demand. Such an inter seasonal shift has important implications for instream flows, particularly in upland watersheds with seasonal streams.
Given the hydrologic flow regime typical of seasonal streams (figure 2), both groundwater pumping adjacent to streams and summer diversions with riparian rights can cause significant impact to juvenile rearing areas for endangered fish. Whereas the intent of the California SWRCB has been to reduce stream flow impacts on winter adult migration by restricting on-site reservoir construction, our results suggest that this policy may have negative consequences on summer instream flows that are also required for juvenile survival.
Water management policies must be appropriately tailored to agricultural producers in upland watersheds versus agricultural areas with water supplies from dam releases. In the period prior to species listing, vineyard landowners in upland watersheds were the most reliant on water security from on-site storage. Because these landowners were topographically isolated from water released by major dam projects, the stricter regulations created an incentive for a shift from on-site storage to groundwater pumping and summer diversion to maintain water security.
Rather than discouraging storage, this study suggests that in some parts of the region, it may be desirable to allow on-site storage as a way to preserve flows during the summer drought period.
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