The economics of aquifer protection plans under climate water stress: New insights from hydroeconomic modeling

Abstract

Where surface and groundwater are managed conjunctively, the stress on water supplies from climate change can significantly influence water use patterns as well as the economic value and sustainability of those uses. However, aquifer protection can be an expensive proposition because water uses that currently rely on aquifer pumping may produce considerable economic value that would be lost if protection measures are carried out. Evidence from climate-stressed regions has attracted research addressing the costs and benefits of aquifer protection plans. Despite these efforts, few peer-reviewed papers have examined water use patterns that minimize the economic costs of aquifer protection. This work presents an original approach to address that gap by developing and applying a basin scale hydroeconomic optimization model of North America’s Middle Rio Grande Basin to explore impacts of new policies not yet implemented supporting aquifer protection. It also gives model access to readers or stakeholders to experiment with their own scenarios to assess impacts of alternative aquifer protection plans. The model accounts for surface and groundwater storage, irrigation, urban, environmental, and recreational demands, surface water inflows under various climate scenarios, groundwater pumping and recharge, substitute water prices, crop water use, evaporation, as well as institutional constraints governing water use. The objective is implemented by finding the optimized discounted net present value of economic benefits summed over uses, sectors, and regions from use of surface water and connected aquifers. Results are shown for each of six water supply scenarios, two substitute water prices, and two system operation rules. To address impacts of aquifer protection targets, groundwater sustainability targets are specified and enforced as constraints for each of the region’s two major aquifers. We assess total and marginal cost of achieving two targeted aquifer protection levels by identifying optimized surface use and groundwater pumping for each of 24 scenarios. Results show that climate change, in the form of reduced and highly variable inflows, considerably drives up the cost of protecting aquifer sustainability, amplified by the conjunctive nature of the system. Future work points to a need to assess economic performance of various water conservation measures as well as reducing costs of substitute water through measures such as technical advance in desalination, recycling and reuse, substitution of other resources for water, better characterization of existing aquifers, and development of new groundwater supplies.