Valuing Groundwater Recharge in an Urban Context

Cutter, William

doi:10.3368/le.83.2.234

Cited by 13 publications

(9 citation statements)

References 9 publications

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“…In others, the relevant marginal damages might be to urban users. Cutter (2007) estimates the marginal damage associated with reduced ability to withstand drought in groundwaterdependent urban areas; aquifer depletion in this study resulted from increased impervious surface due to urban land development, but the technique could be adapted to value the damages associated with competition from fracking for shared groundwater.…”

Section: Groundwater Depletionmentioning

confidence: 99%

The Economics of Shale Gas Development

2014

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In the past decade, innovations in hydraulic fracturing and horizontal drilling have fueled a boom in the production of natural gas (as well as oil) from geological formationsprimarily deep shales -in which hydrocarbon production was previously unprofitable. Impacts on U.S. fossil fuel production and the U.S. economy more broadly have been transformative, even in the first decade. The boom has been accompanied by concerns about negative externalities, including impacts to air, water, and quality of life in producing regions. We describe the economic benefits of the shale gas boom, including direct market impacts and positive externalities, providing back-of-the-envelope estimates of their magnitude. The paper also summarizes the current science and economics literatures on negative externalities. We conclude that the likely scope of economic benefits is extraordinarily large, and that continued research on the magnitude of negative externalities is necessary to inform risk-mitigating policies.3 INTRODUCTIONIn the latter part of the 20 th century, a small group of determined entrepreneurs (supported by decades of federal and private research and development investments) chased a dream -that they would be able to extract meaningful, economically valuable amounts of natural gas from shale deposits (Zuckerman 2013). These individuals were broadly ridiculed at the start, but when their determination paid off and large amounts of gas began to flow from the wells they had drilled, critics in the industry changed their tune. The methods used to unlock these enormous deposits include hydraulic fracturing, or "fracking"-the injection of water under high pressure to fracture lowpermeability shale -along with horizontal drilling. Both techniques had been used in the past; fracking was used commercially as early as 1950, and horizontal wells were common by the late 1970s (King 2012). But innovations in their joint use proved the key to unlocking massive stores of natural gas, which have transformed important parts of the U.S. economy.The substantial increase in economically recoverable reserves, mostly thus far in North America, has led to lower prices for residential and commercial consumers, increased reliance on natural gas to generate electricity, and increased reliance on natural gas as an input to industrial production (U.S. Energy Information Administration 2011, 2014a). As abundant shale gas displaces coal in electricity generation and other industrial uses, the shale boom could also have positive implications for local air pollution and the greenhouse gas emissions that are changing the global climate. At the same time, concerns have been raised about the potential for fracking's water intensity to place pressure on agricultural and municipal use of fresh water, as well as aquatic ecosystems. The chemicals added to the water before fracking, as well as significant wastewater produced, have prompted worries about the contamination of aquifers, rivers, and streams. Air quality impacts from the practice have a...

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Section: Groundwater Depletionmentioning

confidence: 99%

The Economics of Shale Gas Development

2014

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“…In the case of land development, urbanization has negative impacts on groundwater recharge, which reduces urban areas' ability to withstand drought. Thus it may be efficient to tax the increase in impermeable surface area that results from urbanization (Cutter 2007).…”

Section: Water Demand For Instream Usesmentioning

confidence: 99%

The Economics of Managing Scarce Water Resources

Olmstead

2010

Review of Environmental Economics and Policy

152

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“…There are a number of nonmarket valuation techniques available to assess values for impacts that are not directly reflected in market prices [ Bateman et al , 2002]. However, there are very few studies which are focused on valuing groundwater recharge [e.g., Acharya and Barbier , 2002; Cutter , 2007] or the impacts of better groundwater management [e.g., Hellegers et al , 2007]. An alternative to conducting primary nonmarket valuation studies for a benefit‐cost analysis is to transfer values from other similar studies for different components [ Brookshire and Neill , 1992; Brouwer , 2000; Rolfe and Bennett , 2006].…”

Section: Introductionmentioning

confidence: 99%

Valuing reductions in water extractions from groundwater basins with benefit transfer: The Great Artesian Basin in Australia

Rolfe

2010

Water Resources Research

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The management of groundwater to generate net community benefits is challenging because of the complexity of impacts that can be involved, the varying interests of different stakeholder groups, time lags between changes in extraction rates and aquifer levels, and the level of technical and scientific uncertainty. In an economic framework, decisions about conserving groundwater reserves by limiting extraction rates should be made by comparing the benefits of conservation activities with the associated costs. However, limited information about benefits and costs makes it difficult to apply a benefit‐cost framework to issues of groundwater management. This can be addressed to some extent by sourcing nonmarket values from other studies in a benefit transfer process. In this paper, benefit transfer techniques are applied to an evaluation case study about limiting extractions from the Great Artesian Basin in Australia. The results demonstrate some of the issues with the benefit transfer approach and confirm that the publicly funded bore capping program in Australia has been delivering net benefits to the community.

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Valuing Groundwater Recharge in an Urban Context

Cited by 13 publications

References 9 publications

The Economics of Shale Gas Development

The Economics of Shale Gas Development

The Economics of Managing Scarce Water Resources

Valuing reductions in water extractions from groundwater basins with benefit transfer: The Great Artesian Basin in Australia

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