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Optimal groundwater management when recharge is declining: a method for valuing the recharge benefits of watershed conservation

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  • Kimberly Burnett
  • Christopher Wada

Abstract

Demand for water will continue to increase as per capita income rises and the population grows, and climate change can exacerbate the problem through changes in precipitation patterns and quantities, evapotranspiration, and land cover—all of which directly or indirectly affect the amount of water that ultimately infiltrates back into groundwater aquifers. We develop a dynamic management framework that incorporates alternative climate-change (and hence, recharge) scenarios and apply it to the Pearl Harbor aquifer system on O‘ahu, Hawai‘i. By calculating the net present value of water for a variety of plausible climate scenarios, we are able to estimate the indirect value of groundwater recharge that would be generated by watershed conservation activities. Enhancing recharge increases welfare by lowering the scarcity value of water in both the near term and the future, as well as delaying the need for costly alternatives such as desalination. For a reasonable range of parameter values, we find that the present value gain of maintaining recharge ranges from $31.1 million to over $1.5 billion. Copyright Springer Japan 2014

Suggested Citation

  • Kimberly Burnett & Christopher Wada, 2014. "Optimal groundwater management when recharge is declining: a method for valuing the recharge benefits of watershed conservation," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 16(3), pages 263-278, July.
    • Handle: RePEc:spr:envpol:v:16:y:2014:i:3:p:263-278
    DOI: 10.1007/s10018-014-0077-y
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    1. Basharat A. Pitafi & James A. Roumasset, 2009. "Pareto-Improving Water Management over Space and Time: The Honolulu Case," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(1), pages 138-153.
    2. Eli Feinerman & Keith C. Knapp, 1983. "Benefits from Groundwater Management: Magnitude, Sensitivity, and Distribution," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 65(4), pages 703-710.
    3. Darrell Krulce & James A. Roumasset & Tom Wilson, 1997. "Optimal Management of a Renewable and Replaceable Resource: The Case of Coastal Groundwater," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(4), pages 1218-1228.
    4. Roumasset, James A. & Wada, Christopher A., 2012. "Ordering the extraction of renewable resources: The case of multiple aquifers," Resource and Energy Economics, Elsevier, vol. 34(1), pages 112-128.
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    Cited by:

    1. Nathan DeMaagd & Michael J. Roberts, 2020. "How Will Climate Change Affect Water Demand? Evidence from Hawaii Microclimates," Working Papers 202020, University of Hawaii at Manoa, Department of Economics.
    2. Wada, Christopher A. & Pongkijvorasin, Sittidaj & Roumasset, James A. & Burnett, Kimberly M., 2023. "Solving Optimal Groundwater Problems with Excel," Applied Economics Teaching Resources (AETR), Agricultural and Applied Economics Association, vol. 5(2), May.
    3. Nathan DeMaagd & Michael J. Roberts, 2020. "How Will Climate Change Affect Water Demand? Evidence from Hawai‘i Microclimates," Working Papers 2020-2, University of Hawaii Economic Research Organization, University of Hawaii at Manoa.
    4. Olkeba Tolessa Leta & Aly I. El-Kadi & Henrietta Dulai, 2018. "Impact of Climate Change on Daily Streamflow and Its Extreme Values in Pacific Island Watersheds," Sustainability, MDPI, vol. 10(6), pages 1-22, June.

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    More about this item

    Keywords

    Groundwater management; Climate change adaptation; Watershed conservation; Q25; Q54;
    All these keywords.

    JEL classification:

    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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