From the Public Policy Institute of California– Adding more water to rivers, wetlands, and streams at key times can support California’s struggling native fishes and birds. Regulation is one way to do this, by requiring water users to leave a certain amount of water instream. A complementary approach is water trading. Paying water users to make water available can enhance the environment while reducing conflict over the allocation of scarce supplies. Despite trading’s promise, however, there are questions about the path forward. Purchasing water to improve ecosystems (e-water) started in the 1980s, and gained significant momentum in the 1990s (Figure 1). From 1984–2019, some 6 million acre-feet (maf) of e-water were acquired, about a quarter of all purchases on California’s water market. In today’s dollars, almost $775 million went to this effort, with nearly half from state and federal taxes, and the remainder from surcharges on water use. But e-water purchases peaked in the 2000s, and by 2019 they were lower than any time since the late 1990s. (more)