California’s Complex Water Market Faces New Challenges

Institutional Investor

California has an intricate and multifaceted system of water management. The state’s $1.1 billion water market allocates a concentrated supply to the areas that need it most. From farming to landscaping and personal consumption, there is a constant tension in the state’s supply and demand of this life-sustaining resource.

Rivers, Lakes and Aquifers

In addition to stored supply, water in California is obtained through several avenues. Precipitation supplies approximately 75 million acre feet of usable water to California each year, mostly from December to March. Additionally, snowpack in the Sierra Nevada mountains can account for up to 30% of California’s water supply– as temperatures warm in the spring, snow from the mountain range thaws and trickles down, collecting in reservoirs and basins. Lastly, the Colorado River is a large supply source for California water, especially for southern California. All three of these sources are potentially compromised by a changing climate.

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