What Do the Gulf of Mexico, the American Economy and the Bay-Delta Have in Common?

The obvious answer, of course, is that all three are a mess.  But they have something else in common.  The decline of all three has been made possible, in significant part, by ineffective regulatory agencies.  In the case of the Bay-Delta, one such agency is the State Water Resources Control Board, which has long suffered from political pressure, insufficient staff and inadequate enforcement tools.  Last year, the legislature gave the board 25 new staff for their water rights program.  But a more ambitious proposal to strengthen their underlying enforcement authority died in the closing hours of the legislative session, as the legislature finalized the water policy reform package.  All involved saw that effort as unfinished business.  That effort is back as SB 565 (Pavley), and it faces a key test on Tuesday.

This bill would increase the Board’s fines for illegal diversions (which have not been updated in nearly 20 years) to keep pace with inflation.  It would provide other enforcement related tools as well. An effective enforcement program would increase the incentives to discourage illegal water diversions.  This, of course, would help the troubled Bay-Delta system and other degraded rivers.  But it would also benefit legal diverters, who can face water shortages and increased regulatory burdens as a result of illegal pumping.  Not surprisingly, environmental and fishing groups support it.  So do some urban water agencies.  But some agricultural and urban water interests have launched a campaign to kill the bill.

SB 565 couldn’t come at a better time.  In the last few years, we have seen drought, ecosystem collapse and a closed salmon fishery.  Water agencies, the legislature and the public are aware of the importance of improved water management.  The provisions of the bill come directly from the Delta Vision Task Force Strategic Plan.  The task force’s recommendations have carried great weight in the legislature. 

On Tuesday, SB 565 will be heard by the Assembly Water, Parks and Wildlife Committee.  The outcome of the vote is far from clear.

Effective regulatory agencies are central to fair play, as well as a strong environment and economy.  They level the playing field.  They catch those who cheat or take dangerous risks, which can have dire consequences for others.  And they provide incentives for honest players to remain honest. This is not a lesson confined to the environmental arena.  In the world of commercial fishing and collateralized debt obligations, effective regulatory agencies and enforcement programs are essential to protecting the public from disastrous collapses.