Economic Value of Groundwater Protection: Implications for Drought Mitigation

Abstract:

In many arid regions, including parts of California, a common pattern of groundwater use is to cultivate crops needing high levels of irrigation annually and accept unsustainable drawdown of groundwater levels in the near term. Reducing current pumping rates to create a protected reserve of groundwater could produce an economic benefit by mitigating the high cost of future droughts. The objective of our investigation is to quantify the economic benefits of reducing current pumping rates to protect groundwater as a backup irrigation source for long-term conditions. We describe the development and use of an integrated model of aquifer pumping, surface-water use, and economic conditions to identify economic values of groundwater protection as a drought mitigation measure. An optimization framework is developed using GAMS software to investigate conjunctive use of surface water and groundwater and to solve an integrated economic model of crop irrigation and production. Data requirements for the analysis include precipitation, aquifer recharge, crop water requirements, size of groundwater reserve, surface water supplies, and economic factors such as crop prices, pumping costs and efficiency, and yields for selected crops. Our results indicate that economic values of groundwater reserve protection increase with future higher prices of crops and reduced costs of production. These economic values also increase with potential reductions in streamflows from future drought and climate variability that could raise the cost of irrigated agriculture. Results from the integrated GAMS optimization model are comparable to those obtained from simulations of the same conditions performed with MODFLOW-GWM software.