Downside risk of aquifer depletion

Abstract

Groundwater aquifers support agricultural production in many parts of the world. Rapidly declining aquifer levels can have significant negative implications for the sustainability of irrigated agriculture. In this paper, we study the effects of declining well capacities on the downside risk of irrigated agricultural production, defined as the standard deviation of profits that are below the average profit. We simulate seasonal crop yield and profits for three different crops, namely, maize, wheat, and grain sorghum and five different soil types for Finney County in Kansas which overlies the high plains aquifer under current climatic conditions and under the projected climate change scenario with RCP4.5. We find that lower well capacities not only result in lower average profits for all three crops, but they also result in an increase in downside risk. However, we also find that there is significant heterogeneity in downside risk across different crops and soil types. Our results highlight the importance of downside risk for the sustainability of irrigated production under declining aquifer levels and climate change.