Limiting pumping from the Edwards Aquifer: An economic investigation of proposals, water markets, and spring flow guarantees

Abstract

Abstract. The Edwards Aquifer, near San Antonio, Texas, is an important water source for both pumping and spring flow, which in turn provides water for recreation and habitat for several endangered species. A management authority is charged with aquifer management and is mandated to reduce pumping, facilitate water markets, protect agricultural rights, and protect the species habitat. This paper examines the economic dimensions of authority duties. A combined hydrologic-economic model is used in the investigation. The results indicate that proposed pumping limits are shown to have large consequences for agricultural usage and to decrease the welfare of current aquifer pumping users. However, the spring flow habitat is found to be protected, and the gains from that protection would have to exceed pumping user losses in order for the protection measures to increase regional economic welfare. Agricultural guarantees are shown to cause use value differences, indicating the opportunity for emergence of an active water market. Fixed quantity pumping limits are found to be an expensive way of insuring adequate spring flow. There has been considerable concern regarding EA management (see the Water Strategist [1996] or the San Antonio Water System web page, available at http://www.saws.org/ other/htm, for a more detailed history). In the late 1950s the Edwards Underground Water District was formed to manage the EA. In the late 1980s the western agricultural counties seceded from the district because of disagreements about drought management plans. In the early 1990s lawsuits were filed asserting that the EA should be declared an underground river and that endangered species in the springs should be protected by maintaining spring flow. The Texas Water Commission declared the EA an underground river subject to surface water law during mid-1992, but this declaration was overturned by the courts during the fall of 1992. In early 1993 the district federal court upheld the endangered species lawsuit and ordered that pumping limits be imposed to protect The EAA formally began operation in fall 1996 and, as of this writing, is expending substantial efforts on water rights establishment. (EAA activities and charter are set out on the EAA home page, available at http://www.e-aquifer.com). This paper provides results from an analysis of issues regarding EAA duties. We report an economic evaluation of the 1257

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