Law, environmental dynamism, reliability: the rise and fall of CALFED.

• Author: Owen, Dave
• Position: California-Federal water management projects under the Central Valley Project Improvement Act

1. INTRODUCTION II. CONCEPTUAL FRAMEWORKS AND DYNAMIC ENVIRONMENTS A. Traditional Paradigms B. Environmental Dynamism, Shared Resources, and a New Conceptual Approach III. CREATING THE TENSIONS: CONVENTIONAL FRAMEWORKS AND CALIFORNIA'S WATERS A. The Physical Environment B. Engineering Systems and Environmental Impacts C. The Legal Regime and Its Inherent Tensions 1. The Appropriative Rights System 2. Contracts 3. Environmental Statutes a. Substantive Constraints b. Procedural and Planning Laws 4. Water Conservation Laws D. The False Promise of Flexibility IV. THE CONFLUENCE OF TENSIONS--THE BAY-DELTA CONTROVERSY V. TOWARD MORE ROBUST SOLUTIONS VI. CONCLUSION I. INTRODUCTION

   Imagine a typical river somewhere in the American west. Farms rely on its waters and divert much of its flow to irrigated fields. Cities depend upon it for domestic and industrial water supply. Despite diversions, dams, and exotic invaders, native species survive, albeit tenuously. Many of those species are legally protected, and some are quite economically valuable, or at least could be if their populations recovered. A variety of agencies, both federal and state, manage the river in accordance with complex politics and laws. While the agencies' agendas differ in some ways, they share the common goal of achieving a stable balance among its competing uses, and they possess, at least in theory, the money and expertise to achieve that goal. If they fail, the consequences will be troubling: species may go extinct; non-compliance with environmental laws could lead to citizen suits or agency enforcement actions, which could leave irrigators or cities without badly-needed water; and litigation, political conflict, and economic and social dislocation are all but inevitable. (1) Yet, if this river is like many real rivers throughout the west, or like many forests, fisheries, air basins, or other natural systems presenting similar challenges to environmental managers, (2) the chances of such failure are high. This Article explores why those problems so often recur.

   The reasons are invariably complex, and this Article does not explore them all. Political process quirks, skewed economic incentives, ideological hostility to environmental protection, and a variety of other causes--all heavily analyzed by legal scholars--often contribute to failures. But the core thesis of this Article is that an additional factor deserves attention, and that the road to ruin is often smoothed by legal concepts. Flaws in our basic framework for understanding resource crises--a conceptual framework that both flows from and influences the legal schemes that govern resource management--play an important role in undermining efforts to achieve stability.

   Environmental managers often think they should balance environmental protection and resource consumption in a particular way: they think they should allow resource consumption right up to perceived blinks of illegality and should provide just enough protection to avoid legal violations, but no more. That understanding follows logically from our legal systems, which often encourage resource consumption and environmental protection but do little to promote preservation of margins for error. A variety of legal and policy responses flow from that conceptual approach, including selection of management systems designed to allow, facilitate, or subsidize increased consumption even of scarce resources, but also designed to penalize any activity that pushes environmental degradation beyond the perceived brink. But because environmental conditions often change, frequently in unexpected and dramatic ways, brinks of illegality can be shifting and difficult to discern, and resource management schemes deriving from that basic approach often require rapid adjustment. And if, as is often the case, adjusting is institutionally or politically difficult, (3) that traditional approach can lead to fragile solutions prone to costly collapses. This Article therefore articulates a different conceptual framework designed to preserve the durability and reliability (4) of resource allocations even in a changing, unpredictable world.

   This Article illustrates the importance of that conceptual shift by analyzing one of the nation's highest-profile environmental controversies. Approximately forty miles northeast of San Francisco, in California's Central Valley, the Sacramento and San Joaquin rivers flow through a maze of channels and sloughs before discharging into San Francisco Bay. The Bay-Delta, as that estuary is called, is one of California's most valuable natural resources. Its watershed supplies most Californians with drinking water, irrigates millions of acres of agricultural land, supports recreational uses ranging from birdwatching to wakeboarding, and provides crucial habitat for diverse fish and wildlife species, many of which are threatened or endangered. (5) Balancing these often-competing needs is challenging, and the watershed has generated some of the longest-lasting battles in California's water wars. (6)

   Those battles have created a legal laboratory, in which the state and federal governments have tested many approaches to environmental management. Dozens of published cases, many groundbreaking, have emerged from the Bay-Delta's conflicts. (7) Congress and the California Legislature have repeatedly intervened, first authorizing exploitation of the Bay-Delta and then drafting laws designed to protect it. (8) In the shadow of those legal constraints, agencies and interest groups employed novel institutional arrangements and innovative regulatory techniques, many in support of the recent "CALFED" program, which modestly described itself as "the largest, most comprehensive water management program in the world." (9) On a grand and expensive scale, CALFED devised a set of complex strategies for allowing increasing water consumption from an estuary where scarcity is common and variability endemic. Those strategies generated academic attention, with legal authors gravitating to Bay-Delta controversies like evolutionary biologists to the Galapagos. (10) Almost without exception, their scholarship has described CALFED's innovations as models of creative pragmatism. (11)

   But those innovations have not succeeded. (12) Despite many advantages--regulatory creativity and cooperation, sometimes substantial funding, attention from high-level officials, and an impressive confluence of government and private expertise--the federal-state programs designed to redress the Bay-Delta's resource conflicts have so far produced a fiasco,

   Some efforts show preliminary signs of progress, (13) but within just a few years of implementation, key environmental parameters took significant turns for the worse. (14) Already-suffering fisheries suffered "dramatic declines;" (15) new species were listed under the federal Endangered Species Act; the Bay-Delta's levees remained dangerously prone to collapse; (16) and by 2005, just five years after the CALFED agencies approved their long-term program, the Bay-Delta's ecological health by some measurements appeared worse than ever before--notwithstanding benign weather. (17) As one Environmental Protection Agency (EPA) scientist then stated, "[s]omething is really, really wrong. It is not just the sensitive fish. The cockroaches are dying off." (18) By 2007, the situation was even worse. Annual fish counts revealed steep declines from even the 2005 record lows, and biologists described conditions as "very bad ... quite a step down from what was alarmingly bad from previous' surveys." (19) To avoid total extermination, California's State Water Project, which supplies most of the state's people with at least some of their water, briefly shut down its pumps, and then resumed only at levels far below normal. (20) Then, in late summer, a federal judge ordered another major cutback, which water suppliers estimated would reduce deliveries by a million acre-feet per year or more. (21) One lobbyist for water supply agencies described it as "the single largest court-ordered redirection of water in state history." (22)

   Those ecological declines coincided with an institutional collapse, (23) The CALFED bureaucratic structure, though praised by legal scholars, was selectively ignored by key participants in the Bay-Delta controversies; (24) received withering critique from independent reviewers and legislators; (25) and struggled to obtain anticipated levels of funding. (26) The Bay-Delta Authority, the joint federal-state agency created to coordinate CALFED's implementation, fairly quickly saw its relevance evaporate. (27) The judiciary began filling the void. Along with the record low smelt counts, the immediate triggers for the first 2007 pump shutdown were two court orders that undermined the California Department of Water Resources' (DWR) pretensions of compliance with the California Endangered Species Act; the second set of limits came directly from a court order. (28) By 2007, CALFED was a widely-acknowledged failure, and stakeholders on all sides seemed to agree only that the present management approach must be replaced by something dramatically different. (29)

   Yet many of the key conflicts that originally necessitated CALFED persist. California's water wants continue to grow; even as the crisis escalated, the federal and state agencies responsible for delivering Bay-Delta water proposed to increase pumping levels. (30) Such export pumping contributed to both historic and recent ecological declines, (31) and if those declines are not reversed soon, the CALFED agencies could lose species or leave the hub of California's water supply system an injunction away from another major shutdown, this one perhaps of more lasting duration--exactly the outcomes the CALFED process attempted to prevent. In 2005, California's Little Hoover Commission summarized the situation bluntly: "CALFED was forged from a crisis, and to a crisis...