Can Recycled Water Cure All? Groundwater Quality, Crop Choice, and Implications for the Cost of Sea-Level Rise

• Agricultural Economics Workshop

Date and Location

Thursday, November 4, 2021, 4:10 PM - 5:30 PM
Online Meeting, Zoom

Abstract

In the face of drought and climate change, many coastal agricultural regions are at risk of sea-level rise and the depletion of groundwater resources. When combined, these issues lead to seawater intrusion of the underlying groundwater storage, which is detrimental to agricultural production and difficult to combat. In a setting where alternative water resources are prized, one possible strategy to mitigate seawater intrusion is through the development of a municipal treated wastewater program. This paper is the first to empirically evaluate the benefits of recycled water in agriculture. I measure the direct effects of recycled water deliveries, evaluating crop choices and welfare gains for growers receiving water, using a panel mixed logit model. I then measure the indirect impacts, using event studies to measure how recycled water changes the salinity of the underlying water basin. I evaluate the effects for growers that receive recycled water, as well as those who do not have access to recycled water, but farm in the same region. In a high-value agricultural region, I find that growers receiving recycled water shift towards salt-sensitive, profitable crops, with welfare gains of $16 million dollars annually for 5500 acre-ft in delivered water. Salinity of the underlying aquifer, measured using total dissolved solids, improves near parcels receiving delivered water by up to 570 mg/L, and these changes occur in years where aquifer salinity levels are highest. Overall findings suggest that for delicate, profitable produce, recycled water is a promising strategy in mitigating damages from seawater intrusion and groundwater overdraft.