Ellen M. Bruno, University of California, Berkeley
Industry Impacts of Pricing Pollution: Groundwater Externalities and Agricultural Land Use
Date and Location
Thursday, December 10, 2020, 4:10 PM - 5:30 PM
Online Meeting,
Zoom
Abstract
Groundwater externalities pose a critical threat to the future availability of water supplies. This paper analyzes a volumetric pricing program that was implemented to address water quality and quantity externalities arising from groundwater irrigation. We use panel data on farm-level land and groundwater use to identify the short-run effects of this water pollution tax on groundwater use, crop choice, land fallowing, and land conversion. We find that farmers responded to an increase in prices with a 10-15% decrease in overall groundwater extraction and a 17% decrease in total agricultural land. Crop switching towards high-value crops also occurs. We provide empirical evidence that volumetric groundwater pricing can lead to significant resource reallocation, with movement out of agricultural production.
Contact Us
2116 Social Sciences and HumanitiesUniversity of California, Davis
One Shields Avenue
Davis, CA 95616
Main Office: 530-752-1515
Student Advising Services: 530-754-9536
DeLoach Conference Room: 530-752-2916
Main Conference Room: 530-754-1850