Economic and Groundwater Use Implications of Climate Change and Bioenergy Feedstock Production in the Ogallala Aquifer Region

The sustainable water use especially for irrigated agriculture in the Texas Panhandle Region is a major concern. A semi-arid climate and average low rainfalls results in little surface water being available year-round. The Ogallala Aquifer is the primary source of irrigation water in this region. The intensive irrigated agricultural production and growing livestock industry have led to substantial decline of water tables. Furthermore, climate change and growing bioenergy feedstock productions exacerbates the water shortage and quality problems. Given the critical dependence of the regional economy on Ogallala Aquifer, underground water use is an intergenerational issue that must be evaluated in terms of the sustainability of agricultural activities in the long run. This paper develops a dynamic multi-county land allocation optimization model which integrates three sectors: agriculture, climate and hydrology. The sustainable water use and associated irrigated agricultural economic consequences under climate change are analyzed. This model also serves as a policy tool in evaluating economic impacts of alternative bioenergy expansion policies and water saving technologies in Ogallala Aquifer Region. The simulation results show that availability of extractable water has a direct impact on optimal land allocation. Deficit irrigation for major crops is an effective short-run strategy for water sustainability. In the longer run, dryland and pastureland farming will dominate. Climate change has heterogeneous impacts on agricultural production over counties and sub-counties because of the non-uniform hydrological characteristics.