Trading Water: Can Water Shares Help Save California’s Aquifers?

California is by far the United States’ most populous state, as well as its largest agricultural producer. Increasingly, it is also one of the country’s most parched places.

But Edgar Terry, a fourth-generation farmer in Ventura County, just outside Los Angeles, thinks he has a key to reversing worsening water stress: establishing tradeable rights to shares of fast-depleting groundwater aquifers.

Doing so would turn aquifer water into a more valuable asset that could be traded on a market, similar to “cap-and-trade” systems that have been set up to regulate air pollution, conserve fisheries and manage other such common resources.