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At the turn of the century, irrigators in San Luis Valley (SLV), Colorado confronted a reality of precipitously dropping water levels of their shared groundwater resource stemming from their collective overextraction. Rather than continuing with business as usual—risking further declines and potential state intervention—they decided to self-organize and agreed to adopt a pumping fee, substantially increasing the cost of water—one of their key agricultural inputs. This innovative approach to conservation departs from those commonly championed by many groundwater stakeholders, who tend to favor conservation policies that decrease—not increase—costs, such as subsidizing more efficient irrigation technology or paying farmers to fallow their land. Despite few empirical examples of the introduction of a pumping fee, there are sound economic reasons to consider this approach. In this article, we review the adoption of this home-made policy, discussing the process and reasoning behind the stakeholders’ choices, the economic theory that supports it, and some of the agricultural, hydrological, and social outcomes that have resulted from it. The case study illuminates the potential benefits of a groundwater fee but also highlights that policy choices are multifaceted and what works in one scenario does not imply it is a panacea. The article concludes with a discussion of a recent and surprising policy move: SLV farmers have decided to increase the primary groundwater pumping fee exponentially to $500 per acre-foot (10 times the original fee in 2009). We discuss how this new policy represents a shift from a Pigouvian tax structure to what resembles more of a cap-and-trade system. While the results of this latest policy innovation are still unknown, the eventual results promise to be instructive not only to SLV but also to other areas facing similar water scarcity issues.
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Market-oriented solutions for groundwater commons through collective-action
Abstract Groundwater scarcity poses threats to communities across the globe, and effectively managing those challenges requires designing policy that achieves institutional fit. Collective action is well-suited to match rules with local context, and multiple pathways exist for communities to achieve reductions in groundwater use. To better understand how local conditions influence rule design, we examine two groundwater-reliant communities in the Western US that engaged in collective-action to arrive at distinct groundwater management rules. We consider: what drove stakeholders in Northwestern Kansas (NWKS) and San Luis Valley, Colorado (SLV) to adopt local groundwater policies, and why were different management pathways chosen? Further, why is more heterogeneity observed between local management organizations in SLV as compared to NWKS? To investigate these questions, we employ grounded theory to interpret the rules in reference to local hydro-agro-economic statistics and interviews with stakeholders (n= 19) in each region selected by expert sampling. We find that the additional goals of groundwater rules in SLV, partially driven by key contrasts in the resource system compared to NWKS, and higher resource productivity in SLV, creates both the need for and efficacy of a price-centered policy. Furthermore, variation in the resource systems and associated farm characteristics between subdistricts drives higher heterogeneity in rule design between local management districts in SLV compared to NWKS. More generally, we find the local flexibility afforded through the collective-action process as critical, even if it were to arrive at alternative, non-economic based incentives.
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- Award ID(s):
- 2108196
- PAR ID:
- 10406686
- Publisher / Repository:
- IOP Publishing
- Date Published:
- Journal Name:
- Environmental Research Letters
- Volume:
- 18
- Issue:
- 4
- ISSN:
- 1748-9326
- Format(s):
- Medium: X Size: Article No. 045006
- Size(s):
- Article No. 045006
- Sponsoring Org:
- National Science Foundation
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