The Regional Benefits of Water Trading in L.A. County as Recycled Water Production Increases

The Challenge

Los Angeles County contains 215 community water systems that are disconnected and fragmented. These water systems vary greatly in their local water resources including access to groundwater storage, stormwater capture, water re-use, infrastructure and potential for conservation. For instance, some systems contain more water resources than they need to meet their local demand. Other systems have limited resources and depend on a single source of imported water or groundwater aquifer. As a result, households face unequal access to affordable drinking water that is mainly determined by their geographical location. A feasible strategy to integrate these fragmented water systems is needed to address the inequities in pricing and ensure Los Angeles County can achieve 100% local water. 

The Solution

This project assessed the feasibility of creating a unified urban water trading strategy, OneWater market, for Los Angeles County. Developing such an exchange platform will provide the county’s 215 systems with access to new and often cheaper water supply options. The research team compiled detailed information on the county’s largest water managers and built an economically rigorous model to describe the benefits of water trading in the region. The OneWater market will create incentives for systems with abundant local water to expand their conservation, stormwater and recycled water programs. Those systems with scarce local water will also be given incentives and benefit from being able to purchase water from their neighbors, leading to a more county-wide integrated system. The opportunity to trade water efficiently within the county will thus improve regional equity and increase reliance on local water. 

Next Steps

This study will demonstrate how a water trading platform in Los Angeles County may work. Policy shifts will ultimately be needed to successfully implement the proposed system. 

Additional Outcomes to Date

The research team received additional funding from The Water Foundation. 

Publications and Reports

DeShazo J.R. & Pierce G. (2016). Quantifying the Benefits and Designing Governance Structures for a Water Market in Los Angeles County. UCLA Luskin Center for Innovation. Retrieved from https://innovation.luskin.ucla.edu/faculty/j-r-deshazo/page/2/