Environmental Challenge
California’s Sacramento Valley (the northern half of the Central Valley) is a crucial rest stop for birds migrating along the Pacific Flyway, one of the longest migrations in the world. Historically, these birds have relied on wetlands created by seasonal flooding of the Sacramento River as a place to rest, feed, and breed.
Ninety-five percent of the Central Valley’s historic wetlands have vanished, due to agricultural development and intensive management of the river, i.e. dams and levees. This habitat loss has caused bird populations to decline to less than a quarter of historic populations due to lack of food and increased disease from overcrowding. These birds need more habitat, but the region is also critical to humans, both the farmers whose livelihoods depend on their land, and the people like us who eat the crops they grow. The limiting factor is not just land but, more importantly, water. How can we create more wetland habitat for migratory birds without permanently removing water and land from productive uses such as growing our food? |
Project Background
The Nature Conservancy (TNC) has created a program called BirdReturns to provide habitat for birds when and where they need it most, by paying rice farmers to flood their fields for just a few weeks in the spring and fall. However, farmers don't always have enough water to spare to flood their fields during non-growing times. To address this, we explored acquiring water for the environment through a Water-Sharing Investment Partnership (SIP).
How a Water Sharing Investment Partnership Works:
1. Purchase water rights directly through a water market or by working with farmers to reduce their consumption of water by changing how they use and apply it.
2. Use water to create temporary habitat and/or lease to other users.
3. Profits from leasing water pays back investors.
Note: Allocation of water to each purpose can vary year-to-year and season-to-season, depending on shifting environmental and financial needs.
Bird Returns
TNC California has worked to conserve migratory birds in the state for over 50 years and in February 2014 they initiated the BirdReturns Program to create temporary wetland habitat for birds of the Pacific Flyway. The program works throughout the Central Valley to pay rice farmers to temporarily flood their fields for 2-10 weeks during migrations to be used as habitat for a variety of waterfowl. To date, the program has provided 40,000 acres of temporary habitat and hopes to create at least 10,000 acres per year and enroll more landowners moving forward. The program has identified water availability as the main constraint to increasing the number of acres flooded in the program and believes that a SIP may be a viable option for acquiring water necessary to expand their impact. This project will help the BirdReturns program better understand the availability of water in the Sacramento Valley that could be acquired or utilized by the program and evaluate the applicability of a SIP as a mechanism for securing water to expand BirdReturns.
Project Objective
The objective of this project is to determine whether The Nature Conservancy’s (TNC) impact investment-based Water Sharing Investment Partnership (SIP) model can be an effective way to fund BirdReturns. BirdReturns is a project which provides migratory bird habitat in California’s Sacramento Valley.
There are three key questions this project will address:
There are three key questions this project will address:
- Evaluate mechanisms for acquiring water rights in the Sacramento Valley.
- Identify mechanisms for transferring water to create habitat for birds and generate returns for investors.
- Create a tool that TNC can use to assess discrete opportunities to acquire and transfer water.