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Groundwater Management in the Presence of Greenhouse Gas Mitigation Incentives for Agriculture


  • Baker, Justin Scott
  • Murray, Brian C.


This study explores the interactions of groundwater extraction, quality, and greenhouse-gas (GHG) emissions within a productive agricultural region. Two conceptual models are proposed. In the first, GHG emissions are managed at the local level, and an efficient level of abatement is solved for endogenously to the system. Here, regional management of GHG emissions offers an alternative policy tool for managing quantity/quality by internalizing the costs of a common externality associated with both groundwater extraction and nitrogen fertilizer application. A simple numerical simulation is used to illustrate the potential groundwater co-benefits of managing agricultural GHG emissions within the system. The second model reflects the reality that GHG mitigation efforts will occur at the national or international level; agricultural markets and production will respond according to the scope of the policy mechanism and the anticipated effect on agricultural markets and input costs. For this scenario, the impacts of GHG mitigation on regional groundwater supplies are ambiguous. A set of scenarios is derived in which groundwater co-benefits or co-costs can be expected within a region. Groundwater managers should be cognizant of the indirect market pressures created by agricultural GHG mitigation and bioenergy development, and should adapt conservation and quality protection measures accordingly.

Suggested Citation

  • Baker, Justin Scott & Murray, Brian C., 2009. "Groundwater Management in the Presence of Greenhouse Gas Mitigation Incentives for Agriculture," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49481, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:aaea09:49481

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    References listed on IDEAS

    1. Matthew J. Kotchen & Michael R. Moore & Frank Lupi & Edward S. Rutherford, 2006. "Environmental Constraints on Hydropower: An Ex Post Benefit-Cost Analysis of Dam Relicensing in Michigan," Land Economics, University of Wisconsin Press, vol. 82(3), pages 384-403.
    2. Edward B. Barbier, 1996. "The Economics of Soil Erosion: Theory, Methodology and Examples," EEPSEA Special and Technical Paper sp199601t2, Economy and Environment Program for Southeast Asia (EEPSEA), revised Jan 1996.
    3. Dixon, J.A. & Talbot, L.M. & Le Moigne, G.J-M., 1989. "Dams And The Environment - Considerations In World Bank Projects," Papers 110, World Bank - Technical Papers.
    4. Ribaudo, Marc & Horan, Richard D. & Smith, Mark E., 1999. "Economics of Water Quality Protection from Nonpoint Sources: Theory and Practice," Agricultural Economics Reports 33913, United States Department of Agriculture, Economic Research Service.
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    More about this item


    Groundwater; GHG Mitigation; Environmental Economics and Policy; Resource /Energy Economics and Policy; Q25; Q53; Q54;

    JEL classification:

    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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