Projecting the Economic Impact and Level of Groundwater Use in the Southern High Plains under Alternative Climate Change Forecasts Using a Coupled Economic and Hydrologic Model

This research estimates the impact that eight alternative climate change scenarios are likely to have on agricultural returns and the useful life of the Ogallala aquifer in the Southern High Plains (SHP) over a 90-year planning horizon, relative to the situation where climate conditions are maintained at the historical average condition for 1960 to 2009. The empirical analysis is accomplished with the aid of an integrated water policy model that couples a dynamic economic optimization model to a detailed aquifer model of the Southern Ogallala Aquifer. The integrated model controls for the effects of spatial heterogeneity in land use practices and aquifer characteristics. For each climate scenario, changes in annual economic returns, irrigated acres, water use, and aquifer storage levels are measured relative to respective estimates derived from the historic no change climate scenario. The annual 90-year time path of economic returns, water use, and cropping patterns under the eight climate change scenarios significantly varies from the baseline forecast. Moreover, relative to a baseline condition that estimates significant annual decreases in economic returns due to continued groundwater mining, the climate change scenarios generally suggest climate change will mitigate the cost of increasing groundwater scarcity due to a complimentary effect between crop yields and the various climate change scenarios.