Economic optimization of a single‐cell aquifer

Brown, Gardner; Deacon, Robert T.

doi:10.1029/wr008i003p00557

Cited by 88 publications

(62 citation statements)

References 8 publications

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“…They found that net benefits from groundwater management could amount to over $100 per acre but noted that these benefits would decline with increases in interest rate. Brown and Deacon (1972) derived a formula for a tax that should be imposed on groundwater (pumped) in order to yield the optimal control solution. Then, Brown (1974) recognized the issue of congestion externality in aquifers with open-access characteristics and suggested a charging tax to accommodate this externality.…”

Section: Gisser-sa´nchez Effectmentioning

confidence: 99%

Current Issues in the Economics of Groundwater Resource Management

Koundouri

2004

Journal of Economic Surveys

182

125

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Abstract. The issue of groundwater management remains a practical concern in many regions throughout the world, while water managers continue to grapple with the question of how to manage this resource. In this article, we attempt to bring the most advanced and appropriate tools to bear on the issue of resource allocation involving groundwater. Our objective is to demonstrate the state of the art in the literature on ways to think about this complex resource and to deal with the important economic issues emanating from its complexity. We present the conceptual framework within which economists examine the elements interacting in the management of groundwater resources, indicate why the role of the market is limited with respect to the price of this very complex resource, and point to the mechanisms that can pull competitive groundwater price and quality-graded quantity of groundwater in line with their equilibrium levels. In particular, we critically review economic models of groundwater use, examine the potential for groundwater management, discuss the difficulties encountered in the estimation of the relevant control variables of such models, and identify the advantages and limitations of the instruments devised for the efficient use (allocation) of this resource. Finally, we argue that devised regulatory schemes usually ignore the information and knowledge needed for their implementation, and we suggest a core of conditions necessary for successful groundwater management reforms.

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Section: Gisser-sa´nchez Effectmentioning

confidence: 99%

Current Issues in the Economics of Groundwater Resource Management

Koundouri

2004

Journal of Economic Surveys

182

125

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“…We analyze the case of an exogenously growing demand. Since in this model water withdrawals are discretely indexed by time and space, we represent growth as an increase in the number of these spatial points of withdrawal over time instead of assuming a specific demand growth structure (Brill and Burness 1994;Brown and Deacon 1972), thus focusing on the implications of the endogenous well location decision. Hence, the problem becomes one of choosing both optimal extraction paths and locations for new wells.…”

Section: The Modelmentioning

confidence: 99%

Groundwater Spatial Dynamics and Endogenous Well Location

Katic¹

2014

Water Resour Manage

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Groundwater economic models have refined optimal extraction rules while lagging behind in the study of optimal spatial policies. This paper develops a theoretical model to estimate welfare gains from optimal groundwater management when the choice variable set is expanded to include well location decisions as well as optimal groundwater extraction paths.Our theoretical results show that if there is spatial heterogeneity in groundwater, the welfare gains from optimal location of wells are substantial even if extraction rates are unregulated. Furthermore, second-best economically defined spacing regulations may possibly have better efficiency results (and lower implementation costs) than first-best uniform taxes or quotas. An application of the model to a real-world aquifer shows the importance of including well location decisions in spatially differentiated groundwater models and the need for (1) robust estimates of the gains from optimal management and; (2) spatially explicit regulations.

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“…There is an extensive economic literature on the subject. Early studies [2,3] investigated optimal groundwater withdrawals from a single-cell aquifer. Welfare implications of extraction under common property and groundwater property rights were studied by Gisser and Sanchez [4].…”

Section: Introductionmentioning

confidence: 99%

Dynamic‐spatial management of coastal aquifers

Kan

Leizarowitz

Tsur

2009

Optim Control Appl Methods

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We analyze the management of a coastal aquifer under seawater intrusion (SWI) using distributed control methods. The aquifer's state is taken as the water head elevation (vis-à-vis sea level, say), which varies with time and in space since extraction, natural recharge and lateral water flows vary with time and in space. The water head, in turn, induces a temporalspatial SWI process, which changes the volume of fresh water in the aquifer. Under reasonable conditions we show that the optimal state converges to a steady-state process that is constant in time. We characterize the optimal steady-state process in terms of a standard control problem (in space) and offer a tractable algorithm to solve for it. * * This equation is related to the porous medium equationand its generalization, the filtration equation,For a discussion of these equations see [35].in which case it is super-quadratic in the sense that F(z, u) z 2 c 0 for some c 0 , and for every z >M, for some M>0.

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Economic optimization of a single‐cell aquifer

Abstract: Optimal economic use of an aquifer over time is analyzed under conditions of economic growth, inequality of groundwater withdrawal and consumption, and availability of surface water and artificial recharge. The value of an aquifer as a natural water quality treatment facility is derived.

Cited by 88 publications

References 8 publications

Current Issues in the Economics of Groundwater Resource Management

Current Issues in the Economics of Groundwater Resource Management

Groundwater Spatial Dynamics and Endogenous Well Location

Dynamic‐spatial management of coastal aquifers

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