This is the Cato Daily Podcast for Thursday, December 22nd, 2016.

I'm Caleb Brown.

Many of the problems of drought aren't caused by drought, but by the ways in which water rights are allocated.

Reed Watson is Executive Director at the Property and Environment Research Center.

In Nashville in October, we discussed some ways water could be more efficiently allocated.

Describe to me what the problem is with water in California beyond drought.

I mean obviously drought is a problem, but what are the next series of problems that occur when you have

drought conditions and the current setup for allocation of water?

It's rigid.

It doesn't allow for flexibility, it doesn't allow for changing prices in water.

It just simply says, basically, let's take a snapshot in time, say 50 years ago,

and we'll allocate water to its highest value used then, we'll continue to

allocate water that way now and we're not allowing for cities to acquire water

as they might want to, for farmers to acquire water as they might want to, and most

importantly from Perks perspective for

environmental interest to acquire water simply because we're locked into

this bureaucratic malaise and water market software alternative to that.

So what prevents a robust market in water right now in California?

A number of things.

We actually, the title of this report is six policy reforms.

And so we actually address, we think the six, maybe not the biggest, but the ones that are

most easily changed and improved.

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