Exporting Scarcity? Sustainable Groundwater Regulation in an International Marketplace

• Agricultural Economics Workshop

Date and Location

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

Abstract

California's Sustainable Groundwater Management Act (SGMA) seeks to limit groundwater withdrawals to sustainable rates. The first Groundwater Sustainability Plans (GSPs) required by SGMA were approved for implementation in June of 2021. We use a combination of econometric and simulation modeling to investigate the effects of SGMA on production, trade, and water usage in the international market for almonds. We find that-in the long run-SGMA will reduce California land area devoted to almond coverage by between 0.44-1.32%. The associated water savings in California is between 22-67 million cubic meters of water per year. Downstream almond prices increase by 1.34-4.03%. The policy also increases irrigated almond acreage in Spain by between 0.09-0.27%, requiring an additional 1-2.5 million cubic meters of water per year.