In examining the South Platte system in Colorado where surface water and groundwater are used conjunctively for irrigation, we find the actual installed well capacity is approximately sufficient to irrigate the entire area. This would appear to be an overinvestment in well capacity. In this paper we examine to what extent groundwater is being developed as insurance against periods of low streamflow. Using a simulation model which couples the hydrology of a conjunctive stream aquifer system to a behavioral-economic model which incorporates farmer behavior in such a system, we have investigated the economics of an area patterned after a reach of the South Platte Valley in Colorado. The results suggest that under current economic conditions the most reasonable groundwater pumping capacity is a total capacity capable of irrigating the available acreage with groundwater. Installing sufficient well capacity to irrigate all available acreage has two benefits: (1) this capacity maximizes the expected net benefits and (2) this capacity also minimizes the variation in annual income: it reduces the variance to essentially zero. As pumping capacity is installed in a conjunctive use system, the value of flow forecasts is diminished. Poor forecasts are compensated for by pumping groundwater.
Additional publication details
|Publication Subtype||Journal Article|
|Title||Conjunctive use of groundwater and surface water for irrigated agriculture: Risk aversion|
|Series title||Water Resources Research|
|Publisher||American Geophysical Union|
|Other Geospatial||South Platte River|