Direct and indirect impacts of a zero groundwater depletion policy on a regional economy

In response to appeals to forestall the declining water table of the Ogallala Aquifer, Northwest Kansas Groundwater Management District No. 4 has proposed a policy designed to gradually limit withdrawals until a "zero depletion" state in which groundwater discharge equals recharge occurs. The policy is based on establishing Maximum Depletable Reservoirs of saturated thickness and Related Management Areas which represent clusters of wells with similar hydrologic conditions.; This study assesses the direct and indirect economic impacts of the policy on the Northwest Kansas region, which includes six counties lying within the district's boundaries. The model comprises three components: a water budget which estimates each county's water table decline given irrigation withdrawals; a linear program which forecasts the direct impacts of increasing water costs, declining well yields, well abandonment, and artificial water availability constraints on total county crop production; and input-output analysis to forecast the indirect impacts or multiplier effects of declining irrigated crop production. The model is calibrated for each five-year period between the years 1989 and 2039.; Empirical results show that under a baseline scenario in which no artificial constraints were imposed, total irrigated and dryland crop production will decline by an estimated 10 percent in 50 years, with total regional withdrawals reduced by approximately one-half through the natural process of well abandonment and declining well yields. Under a first policy scenario in which pumping constraints were imposed given a policy goal of conserving 58 percent of remaining water, nearly one quarter of baseline water in storage is retained, with final total regional crop production reduced by an additional eight percent over that of the baseline. Finally, the most restrictive policy scenario with pumping constraints imposed given a policy goal of conserving 78 percent of remaining water leads to a savings of 44 percent of baseline water in storage, with an ensuing 12 percent reduction in total regional crop production over baseline reductions. Indirect impacts are relatively small since leakages in the local economy are great, dampening multiplier effects in sectors linked to irrigated agriculture.