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As Ventura County struggles to cope with the long-term shortage of water, water trading has promise as a viable way to redistribute water under a free-market system that will provide an economic return on conservation, incentives to create new water supplies and flexibility as regulators reduce extraction to sustainable levels.
A water market is a way to transfer the allocation of groundwater pumping between water users. It is an administrative process that enables people who have excess water allocation to sell it to people who need it. Both sellers and buyers participate in the water exchange voluntarily.
Several states in the U.S., as well as countries including Australia, Chili and South Africa, have successfully implemented water markets as an equitable way to improve reliable water supplies, even amid devastating drought. With involvement of agricultural, municipal and environmental stakeholders, Ventura County is developing the first water market of its kind, created as a response to new groundwater regulation, the Sustainable Groundwater Management Act (2014).