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

Justin Scott Baker and Brian Murray

No 49481, 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin from Agricultural and Applied Economics Association

Abstract: 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.

Keywords: Environmental Economics and Policy; Resource/Energy Economics and Policy (search for similar items in EconPapers)
Pages: 46
Date: 2009
New Economics Papers: this item is included in nep-ene and nep-env
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea09:49481

DOI: 10.22004/ag.econ.49481

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