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Optimal extraction of water from a groundwater system with two linked aquifers

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  • Hafi, Ahmed
  • Cao, Liangyue

Abstract

With the increase in cost of surface water, groundwater extraction for irrigation has become more competitive. Due to the interdependence of different water resources in a catchment, the management of all water resources should be integrated. An illustrative model is formulated of the dynamic system of two linked aquifers with stochastic recharge, water demand and extraction cost. For each aquifer area, the optimal pumping policy for each state of the overall groundwater system is derived and this policy is applied over a large number of years to derive the expected development over time of extraction and the state of the groundwater system. The implications of the optimal extraction policy for any review of existing allocations and trade arrangements are discussed. Optimal taxes to replace existing allocations are also derived and discussed

Suggested Citation

  • Hafi, Ahmed & Cao, Liangyue, 2002. "Optimal extraction of water from a groundwater system with two linked aquifers," 2002 Conference (46th), February 13-15, 2002, Canberra, Australia 125096, Australian Agricultural and Resource Economics Society.
    • Handle: RePEc:ags:aare02:125096
    DOI: 10.22004/ag.econ.125096
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    References listed on IDEAS

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    1. Knapp Keith C. & Olson Lars J., 1995. "The Economics of Conjunctive Groundwater Management with Stochastic Surface Supplies," Journal of Environmental Economics and Management, Elsevier, vol. 28(3), pages 340-356, May.
    2. Provencher Bill & Burt Oscar, 1993. "The Externalities Associated with the Common Property Exploitation of Groundwater," Journal of Environmental Economics and Management, Elsevier, vol. 24(2), pages 139-158, March.
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