Groundwater Banking in Aquifers that Interact With Surface Water: Aquifer Response Functions and Double‐Entry Accounting1

Abstract

Contor, Bryce A., 2009. Groundwater Banking in Aquifers That Interact With Surface Water: Aquifer Response Functions and Double‐Entry Accounting. Journal of the American Water Resources Association (JAWRA) 45(6):1465‐1474.Abstract: Increasing worldwide demands for water call for mechanisms to facilitate storage of seasonal supplies and mechanisms to facilitate reallocation of water. Markets are economically efficient reallocation and incentive mechanisms when market conditions prevail, but special hydrologic and administrative conditions of water use and allocation interfere with required market conditions. Water banking in general can bring market forces to bear on water storage and reallocation, improving economic efficiency and therefore the welfare of society as a whole. Groundwater banking can utilize advantages of aquifers as storage vessels with vast capacity, low construction cost, and protection of stored water. For groundwater banking in aquifers that interact with surface water, an accounting system is needed that addresses the depletion of stored volumes of water as water migrates to surface water. Constructing such a system requires integration of hydrologic, economic, and legal principles with principles of financial accounting. Simple mass‐balance accounting, even with allowances for depletion, is not adequate in these aquifers. Aquifer response functions are mathematical descriptions of the impact that aquifer pumping or recharge events have upon hydraulically connected surface water bodies. Double‐entry accounting is a financial accounting methodology for tracking asset inventories and ownership claims upon assets. The powerful innovation of linking aquifer response functions with double‐entry accounting technologies allows application of groundwater banking to aquifers where deposits can be depleted by migration to hydraulically connected surface water. It honors the hydrologic realities of groundwater/surface water interaction, the legal requirements of prior appropriation water law, and the economic requirements for equitable and efficient allocation of resources.