UC Merced

Groundwater overdraft is a major problem globally and has been a growing problem for California for decades. This overdraft is predominantly driven by the economic value of water for agricultural production and cities. Spurred by the recent drought, California passed legislation requiring the elimination of groundwater overdraft by 2040. This paper employs a statewide hydroeconomic optimization model to explore potential water supply effects of ending long-term groundwater overdraft in California's Central Valley for several general water policies with historical and warmer-drier climates. The model minimizes agricultural, urban scarcity, and operating costs over 82 years of historical hydrologic variability, given today's infrastructure and environmental flow constraints. The model results assess effects of overdraft and Delta policies for different climates on water deliveries, economic costs, environmental flows, water market operations, and the economic value of expanding infrastructure capacities. Prohibiting long-term overdraft leads to reduced agricultural water use and reoperations, and reduced outflows to the sea from the Sacramento-San Joaquin Delta, where water availability policies become important. In combination with a warmer-drier climate, ending overdraft further exacerbates water scarcities, increases environmental and economic costs, and increases the marginal economic value of water exports from the Delta, which are likely to worsen water conflicts and illustrate connections of California's groundwater and surface water problems. Economically useful adaptation actions include more water transfers involving the Delta, water markets, and trades; conjunctive use of surface water and groundwater; and recycled wastewater supplies for coastal urban users.