Windows of Opportunity for Groundwater Management

Abstract:

To date, there has been little attention focused on how the value and effectiveness of groundwater management is influenced by the timing of regulatory intervention relative to aquifer depletion. To address this question, we develop an integrated framework that couples an agro-economic model of farmers’ field-level irrigation decision-making with a model of a groundwater abstraction borehole. Unlike existing models that only consider the impact of aquifer depletion on groundwater extraction costs, our model also captures the dynamic changes in well productivity and how these in turn affect crop yields and farmer incomes. We use our model to analyze how the value of imposing groundwater quotas is affected by the prior level of depletion before regulations are introduced. Our results demonstrate that there is a range of aquifer conditions within which regulating groundwater use will deliver long-term economic benefits for farmers. In this range, restricting abstraction rates slows the rate of change in well yields and, as a result, increases agricultural production over the simulated planning horizon. Contrastingly, when current saturated thickness is outside this range, regulating groundwater use will provide negligible social benefits and will impose large negative impacts on farm-level profits. We suggest that there are ‘windows of opportunity’ for managing aquifer depletion that are a function of local hydrology as well as economic characteristics. Regulation that is too early will harm the rural economy needlessly, while regulation that is too late will be unable to prevent aquifer exhaustion. The insights from our model can be a valuable tool to help inform policy decisions about when, and at what level, regulations should be implemented in order to maximize the benefits obtained from limited groundwater resources.