Agricultural Economics Department


Date of this Version



Cornhusker Economics, July 1, 2015,


Copyright 2015 University of Nebraska.


Concerns about groundwater depletion in the High Plains Aquifer and other aquifers throughout the world have been well documented in the media and the scientific literature. A recent study found that groundwater use exceeds recharge in about one-third of the world's largest aquifers (Barringer, 2015). Thus, developing appropriate groundwater management policies that encourage conservation and preserve the long-run viability of aquifers is of paramount importance in many regions. However, policies and institutional arrangements in many areas may exacerbate aquifer depletion by encouraging groundwater consumption. Policies that subsidize the cost of energy inputs may increase groundwater extraction. Subsidized electricity or diesel rates for irrigators are pervasive in many countries including India, Mexico, and Tunisia (among many others). Concerns about neighbors using groundwater and depleting a shared aquifer may lead to all irrigators using more water than if the aquifer was not shared. Using inefficiently large amounts of groundwater is a concern as it can lead to the depletion of existing aquifers and an increase in future costs as groundwater tables are drawn down.