Uncertainty effects on Ogallala aquifer withdrawal: Is regulation needed?
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The regional and local economies of the Texas High Plains rely on economic activity resulting from irrigated crop production, variously conditioned by the local decline and availability of groundwater stocks. Public interest in the remaining stocks (significantly diminished, but still relatively bountiful in aggregate) has increased during recent years, with a continuing trend. Society, through actions of government and quasi-government institutions, has proposed, endorsed, mandated, and affected increased public regulation of groundwater resources in the region, resulting in landowner opposition to the interference in private property rights. As landowners generally recognize the value of the groundwater stock to be capitalized into the value of the land, policy considerations that use positive conservation incentives (market leasing and purchase of water rights) may prove effective and equitable mechanisms for extending the life of groundwater stocks. Consideration of differences in landowner and aquifer outcomes under the regulatory policy and a policy of limited regulation is fulfilled through a dynamic nonlinear programming model employed to evaluate outcomes of decision makers in a framework of differentiated versus non-differentiated aquifer characteristics conditioned by market-based opportunities for sharing risk and uncertainty through voluntary conservation transactions. A status quo, minimal regulation, baseline policy is used for contrast.