A panel analysis of groundwater use in California

Groundwater is a relevant source of drinking and agricultural water in many regions of the world, but many aquifers have been unsustainably over-drafted and polluted. This has significant environmental, health, and economic implications. We rely on panel analysis, with small-sample corrections for cluster-robust variance estimation and hypothesis testing, to investigate the dynamics of groundwater extraction. We focus on California, yet our approach could be helpful to analyze the dynamics of groundwater extraction in other groundwater-reliant regions of the world. In California, over-reliance on groundwater has led to significant overdraft, affecting long-term water supply reliability and groundwater pumping costs. It further caused subsidence and infrastructure damage, harmed groundwater-dependent ecosystems, and threatened the sustainability of groundwater resources in the state. We use panel data of the 56 California Water Plan planning areas over the 1998–2015 period. We concentrate on agricultural and urban water use and the major water projects in the state, to provide a better understanding of the relationships between groundwater extraction and water use and supply. Results suggest that reducing agricultural water in Central California and urban water in Southern California could reduce groundwater extraction in these regions by approximately the same amount of the reduced water. Other opportunities to reduce the stress on the groundwater resources in the state are available for other regions, yet with lower benefits. Results also suggest that a decrease in deliveries from the Central Valley Project to the southern part of the Central Valley would increase groundwater extraction by approximately the same proportion. Changes in deliveries from the major water projects in the state, as well as from other sources of surface water, would also have some, yet lower impacts on groundwater extraction in the Central and Southern California.