Charging California farmers for groundwater use could yield massive conservation gains, researchers find

California farmers are willing to cut back on groundwater usage when their local governments start charging for this formerly free resource, new research has found.

Historically, Golden State farmers have kept their crops irrigated amid extreme heat and drought by tapping into groundwater beneath their properties — at no charge, other than the costs of pumping.

That practice has fueled concerns about the depletion of the state’s available water sources as climate change drives worse and more frequent drought.

Some local agencies, seeking to address those concerns, have begun to change their operating strategies in recent years, following the passage of a significant revamp to statewide groundwater regulations, according to the authors of a new working paper, published by the University of Chicago’s Energy Policy Institute.

The widescale implementation of such shifts could lead to a reduction in acreage of the state’s thirstiest fruits and nuts by nearly a quarter, while encouraging massive transitions to less consumptive alternatives, per the paper.

“Water does have value, and we learn that lesson when there is less of it to go around—but it shouldn’t get to the point where some are starved for water,” co-author Fiona Burlig, an assistant professor at the University of Chicago Harris School of Public Policy, said in a statement.

To meet the lofty goals of California’s 2014 Sustainable Groundwater Management Act, the authors estimated that users statewide will need to reduce groundwater pumping by about 19.2 percent by 2042. Local agencies have therefore begun instituting a variety of discretionary policy mechanisms — including taxes, fees, pumping limits and conservation incentives. More than half of these agencies, the researchers found, are opting to put some type of price on groundwater.

To quantify changes in both water extraction and pumping costs, the authors combined data on groundwater levels, pump efficiency and electricity consumption linked to pumping across California’s Central Valley, the state’s agricultural core.

From there, they were able to model how farmers respond to changing groundwater costs over different time frames by evaluating their crop choices and water use. 

Ultimately, the researchers found that every 10-percent surge in groundwater pumping prices comes with a 1.4-percent reduction in land containing fruit and nut perennials, a 0.72-percent increase in land left fallow and overall groundwater pumping reductions of about 3.6 percent.

“While farmers don’t change crops in response to short-lived price changes, due mostly to the nature of farming, they do start changing what they grow — and whether they grow at all— when they are charged permanent fees,” co-author Louis Preonas, an assistant professor at the University of Maryland, College Park, said in a statement.

Meeting statewide targets of reducing pumping by 19.2 percent would require a groundwater pumping tax of about 60 percent — or about $30 per acre-foot of water used, according to the paper.

The implementation of such a tax, the authors found, would lead to an almost 9-percent switch in cropland to less-consumptive alternatives, as well as a 24-percent plunge in fruits and nuts and a 50-percent rise in land left fallow. 

Evaluating these findings, Burlig stressed the importance of putting a price on groundwater and of treating “water as a commodity that should be conserved.”

Through such a shift in perspective, farmers are more likely to adopt cultivation strategies that are “more suitable to the land conditions and natural resources that we all have to share — rather than using up natural resources for free to make the greatest profit,” Burlig added.