Public Policies in Water-Resource Use: Their Effect on Groundwater Mining and Surface-Water Imports

摘要

Both Federal policy determining the price of surface-water imports and State policy influencing groundwater mining (use) can affect the rate of groundwater mining and the date that surface-water imports begin. The study develops a theoretical economic model to analyze the influence of public policies on the groundwater mining rate. The model is also used to analyze the timing of groundwater use and of surface water imported into the area to satisfy regional water demand. The study finds that, for a given import price, surface-water imports will begin earlier when groundwater reserves are managed optimally rather than as resources that farmers own in common. The study also finds that imports will begin increasingly later as the price charged for imported surface water rises.