Abstract

Climate change poses tremendous uncertainties to the supply and management of water resources. Given the importance of groundwater in agriculture and domestic water supply for numerous rural communities in South India, this paper seeks to address the impact of climate change on groundwater supplies and possible policy interventions to mitigate the problem. The study site is the Tamil Nadu state in South India where groundwater aquifers are already under severe stress due to poor management caused by perverse incentives such as fully subsidized electricity for groundwater pumping and absence of regulatory policy and/or institutions. This study attempts to quantify the impact of climate change and other man-made factors such as electricity pricing regime and well density on groundwater levels and groundwater irrigated area. Using panel data econometric approaches, the factors affecting depth to water table and area irrigated by wells were identified and quantified. The fixed effects panel data model and panel corrected standard errors methods were employed for analysis. Both current rainfall and lagged rainfall were found to have positive impact on groundwater table and area irrigated by wells, while the increase in number of wells (well density) and shift in electricity pricing from a pro-rata regime to a fully subsidized pricing regime lead to significant negative impact on water table and area irrigated per well. The study concludes that climate change and other anthropogenic factors such as increased exploitation of groundwater and ineffective pricing of electricity will clearly lead to unsustainable groundwater levels. Therefore, appropriate policies such as pro-rata pricing of electricity and regulation of well drilling will help to mitigate the twin-problems of declining water table and increasing externalities in groundwater irrigation.

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