Targets and trade-offs: Designing environmental water transactions to navigate compounding competition on the San Saba River in Texas

In river basins experiencing water scarcity, water demands for freshwater ecosystems and water users increasingly compete with one another. Environmental water transactions (EWT) offer a mechanism for resolving this competition via a voluntary agreement in which existing water users are paid to modify the time, place and/or volume of their water right to provide an environmental benefit. However, the disconnect between surface water and groundwater management creates barriers to implementation and scaling of EWTs. We study EWTs addressing water scarcity in Texas’s San Saba River, focusing on targeting the location and timing to fulfill conservation objectives. We integrate recent hydrological studies to identify trends in groundwater-surface water interaction, prioritizing stream reaches for intervention and considering both geologic and anthropogenic drivers of scarcity. We analyze water rights and well data to estimate consumptive water demands during the irrigation season. We quantify the volumetric contribution of different portfolios of water rights paired with different types of EWT to assess their contributions to flow targets, including costs and benefits associated with each portfolio. Results demonstrate that the effectiveness of EWTs relies on coordinated spatial and temporal targeting within the context of hydrogeological settings and water users. We provide cost estimates for implementing four types of EWTs ranging from one season to perpetuity ($32,040 and $404,722 respectively) that can provide 3 cubic feet per second (cfs) (0.085 cubic meters) to help meet subsistence flows in the height of irrigation season (June-Aug). These costs are contextualized within a broader water governance context that considers the benefits to producers and the environment and underscores the importance of future policy to integrate groundwater-surface water interaction.