Groundwater Economics

Tim Hammerich

News Reporter

Although it should go without saying, farmers in California need water to sustain their livelihoods. Without surface water allocations, farmers who are able will turn to groundwater. Although this is an economic decision, they also have no other choice to keep crops alive. Recent findings by the University of California Cooperative Extension indicate this with data that higher prices on groundwater have little impact on withdrawals. Here’s extension specialist Ellen Bruno.

Bruno… “A 10% increase in the price of groundwater would lead to about a 1.5% decrease in extraction. You know, that's not a huge price increase, just leads to a tiny change in extraction. And so that would mean if you wanted to use prices or taxes as a tool to actually dis-incentivize pumping, you would need a really big price increase in order to elicit a reduction in groundwater (pumping).”

Bruno hopes more creative and collaborative solutions can be developed to best utilize groundwater resources.

Bruno… “There are lots of opportunities for local agencies to implement cost-effective policies that give flexibility to farmers, and yet impose incentives to conserve that can help bring basins into balance.”

Reach out to your local groundwater sustainability agency to get involved.