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Bill Golden Troy Dumler Danny Rogers Jeff Johnson

Potential Economic Impact of Water Use Changes in Southwest Kansas. Bill Golden Troy Dumler Danny Rogers Jeff Johnson. Ogallala Aquifer Program Workshop Amarillo, Texas March 5, 2013.

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Bill Golden Troy Dumler Danny Rogers Jeff Johnson

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  1. Potential Economic Impact of Water Use Changes in Southwest Kansas Bill GoldenTroy DumlerDanny RogersJeff Johnson Ogallala Aquifer Program Workshop Amarillo, TexasMarch 5, 2013 This project is funded “in-part” by the State of Kansas Water Plan Fund, GMD#3, and the Ogallala Aquifer Project

  2. Governor’s Initiative #2

  3. Research Focus • Impacts of groundwater policy on: • Producers • Rural economies • Ogallala aquifer • The value of conserved groundwater • Research Tools • Inter-temporal simulation models • Basic econometrics • IMPLAN

  4. Model Area: Three High Priority Areas

  5. Scenario 1a – Practical Pumping Rates – 2008

  6. Scenario 1a – Practical Pumping Rates – 2017

  7. Scenario 1a – Practical Pumping Rates – 2068

  8. Major Assumptions • 0% Discount Rate – economists have different opinions about this. • 0.5% Productivity Growth Rate – economists have different opinions about this. • Valuation of Conserved Groundwater –economist agree this should be done but have not agreed on a method.

  9. Can We Predict Growth in Productivity ? 0.4% for1975-1999; 9.7% for 2000-2011; 3.5% for 1975 - 2011

  10. Major Differences Between Subareas • S.Q. Rainfall (17.9”, 21.2”, 18.6”) • Starting Well Capacity • Dryland Crop Mix • S.Q. Water Use Reduction (9.5%, 31.7%, 14.7%) • Non Uniform Hydrology (KGS Model) • Different rates of dryland conversion • Different rates of well capacity decline

  11. Ground Water Use Constraints(KGS Model)

  12. Weather Constraint

  13. Ground Water Use Constraints

  14. Simulation Results

  15. Simulation Results

  16. Summary of Simulation Results

  17. Conclusions • Impacts of future drought condition can be mitigated by groundwater conservation today. • When the remaining groundwater is not valued both producers and communities experience negative impacts. • When the remaining groundwater is valued both producers and communities may experience positive impacts depending on: • The magnitude of reductions • Dryland options • Current hydrology

  18. Conclusions • Valuation of conserved groundwater is necessary in policy analysis • The benefits of conservation may be significantly understated if a 0% growth rate in productivity is assumed. • We need to prepare for a future where wheat is the dominant crop. (What about grain sorghum?)

  19. Need for Additional Research • Team effort to develop a simulation tool to predict the agronomic, economic, and hydrological impacts of “cropping systems” under variable future climatic conditions.

  20. Questions • Full Economic Report: http://www.agmanager.info/policy/water/EconomicImpact_WaterUseChanges_SW-KS.pdf • Full KGS Report http://www.kgs.ku.edu/Hydro/Publications/2012/OFR12_3/index.html

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