Yet the state's largest demand for additional water consumption is in its growing cities. While growth of this magnitude would present a whole range of other problems, there clearly is enough water already developed in this state to meet demands well into the future if only it were allocated in a more economically efficient way. A key question is how to bring about the changes necessary to achieve improved efficiency in a way that benefits farmers, city dwellers, and the environment. The answer is water marketing. Sellers benefit by receiving a profit on their water.
Buyers benefit by obtaining new supplies at relatively low cost.
A water market also benefits the environment. Meeting new demands by shifting water from existing uses will reduce the need for new, environmentally damaging dams and water diversions. Transfers of water are becoming increasingly common in other Western states, but have not occurred frequently in California. A notable exception is a 1988 agreement between the Metropolitan Water District of Southern California and the Imperial Irrigation District, which EDF strongly advocated. The Governor's New Plan Governor Pete Wilson's plan to respond to the drought involves a form of water marketing in California.