"Our assessment of the current water situation [in California] is bleak," says Ellen Hanak, a Public Policy Institute of California economist. "California has essentially run out of cheap, new water sources."

The institute has released its findings in a publication written by a team of scientists, engineers, economists and legal experts from three University of California campuses and Stanford University, AAA ScienceMag.org reported Thursday.

Their report says water quality is deteriorating, pollution from agricultural runoff is increasing, and efforts to manage water and species recovery are hampered by a fragmented system of hundreds of local and regional agencies responsible for water supply, water treatment, flood control and land-use decisions.

"Today's system of water management, developed in previous times for past conditions, is leading the state down a path of environmental and economic deterioration," Hanak says. "We're waiting for the next drought, flood or lawsuit to bring catastrophe."

To stave off such a catastrophe, the report says, California needs to reform the way it manages water.

However, the study's authors say numerous entrenched interests, such as farmers, utility companies and landowners, have already proven reluctant to make sweeping changes.

"It's not going to be easy," says Jay Lund, a study co-author and director of the UC Davis Center for Watershed Sciences. "It's not going to be popular."

However, he says, the current system is failing. "This is an approach that is not working. We need to take a longer view of it."

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