In a new report, researchers at the Public Policy Institute of California look at how water markets can play a larger role in helping water users adapt to the Sustainable Groundwater Management Act.

The design of a water market is critical for supporting low-cost trading and groundwater banking while protecting drinking water, they find. A range of roadblocks, however, is currently hampering the effectiveness of markets. Yet swift action now to establish allocations, minimize collateral impacts and refine regulations can build resiliency sooner.

“Farmers will need to adapt as groundwater becomes scarcer, especially during drought,” the researchers write in a blog post. “Trading can help facilitate this adaptation.”