California’s resilience to drought

Given my profession, I’m incentivized to freak out about drought. If I thought it wasn’t a big deal, I’d have to find something else to write about. But in darker moments, I wonder if I’m overdoing the freakout.

Chris Austin’s writeup of Ellen Hanak’s comments at this week’s California water bond hearing raise the question anew:

Ellen Hanak, senior fellow at the Public Policy Institute of California, gave a retrospective of how the state managed during the recent drought. “California has lived through droughts before,” she began, noting that when they looked at the impact of drought on the state’s economy, “the conclusion was that because of our variable climate, we are set up as an economy to manage droughts pretty well.”

“One key reason why the economy is fairly resilient to drought is because a lot of the economic activity is in the urban sector, which is not that reliant on large quantities of water as a production input,” she said. Urban utilities manage droughts by compressing at the residential level first, and not shorting the industries, commerce or key public health and safety sectors like hospitals, so the job losses in the urban sector aren’t many.

“Agriculture tends to suffer more during a drought because water is such a key production input and agriculture is a big user of water, but from the standpoint of the statewide economy, that’s not such an issue as it is such a small share of the economy. It’s about 1 or 2% depending on how you count it,” she said.

I like Hanak’s phrase: “demand compression”.


  1. The specter of drought is worth freaking out about.
    “demand compression” is an interesting choice of words, however, Ellen Hanak’s comments merely point out what is already known.

    The real question is how do we get out of the cycle of repeating history over and over again while hoping for a different outcome ?
    As long as California’s water supply continues to to be so grossly and intentionally over appropriated no new infrastructure project or conservation measure will serve to really solve anything.
    No amount will ever satisfy the insatiable thirst of the agricultural sector.
    It’s a funny thing.
    Water conserved in the non agricultural markets can be reallocated to meet many needs including the inevitable urban growth that occurs.
    Water conserved by agriculture only serves to promote more crop production.
    How many almonds do we really need ?

  2. Nothing wrong with healthy perspective, but that “demand compression” can be a big deal for urban residents’ day-to-day lives. As for the economic impact of farming in California, sure, it’s relatively small overall, but it’s very big in certain regions, and the pain of drought is not evenly spread. Some farmers’ get near-full irrigation deliveries in dry years, while their unlucky neighbors might be shut down entirely.

    To Chris Gulick: Water conserved in ag is frequently sold to urban areas. Matt Jenkins wrote an outstanding article on the subject of Metropolitan Water District’s water deals with farmers in High Country News two or three years ago.

  3. To Bruce Ross: Your point is well made and illustrates what I think is a contributing factor to how we got into this mess.
    Was the water conserved or was a determination made that more profit was to be had selling water rather than irrigating crops ?
    Other than the actual owners, who should be allowed to profit from the sale of Public Trust Resources ?
    I’m not sure the pain of drought should be evenly spread.
    I would think the more senior your water rights the less pain you should feel.
    The more junior your water rights the more likely you are to come up short.

  4. Pingback: Another Week of GW News, March 17, 2013 – A Few Things Ill Considered

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