able for a variety of uses. The economic attractiveness of treated municipal wastewater as a source of supply has focused increasing attention on the possibility of using it to recharge aquifers. Historically, treated wastewater has been used on a modest scale both to augment ground water supplies and as a means of protecting aquifers in coastal regions from seawater intrusion.

The Economics of Ground Water Use

There is a substantial and varied literature on the economics of ground water use (see, for example, Burt, 1970; Cummings, 1970; Gisser, 1983; Bumess and Martin, 1988; Provencher and Burt, 1993). A number of common principles related to the use and management of ground water are developed and characterized in this literature. For example, ground water is most efficiently used when it is extracted at rates such that the net benefits (total benefits net of total costs) from use are maximized over time. The benefits are typically determined by the use to which the water is put. In the short term, costs include the cost of extracting ground water and the opportunity, or user, cost.

The cost of extracting ground water is usually a function of energy cost, pump efficiency, and the depth from which the water must be pumped. Extraction cost increases as energy cost and pumping depth increase, and it declines as pump efficiency increases. The opportunity cost of extraction is the cost of extracting the water now rather than leaving it for later use. The opportunity cost, which is frequently called a user cost, captures the fact that water pumped in the current period results in a lowered ground water table for all future periods if pumping rates exceed safe yields of the aquifer. The incremental cost of pumping from a lowered water table in the future must be accounted for if current extractions are to be economically efficient. Much of the economic literature on ground water resources focuses on the fact that where ground water is treated as a common property resource, extractions tend to occur at rates that are inefficient. When pumpers fail to account for all of the costs of extraction, including the user cost, the rates of extraction are greater than the economically efficient rate.

In the long run, the rates of extraction for any given aquifer cannot exceed the rate at which the aquifer is recharged—the safe yield—without overdrafting the aquifer. Overdrafting can brings costs: land subsidence, greater risk of flooding, greater risk of salt water intrusion in coastal areas, and the increased costs of reaching and pumping the water from the lowered water table. When over-drafting is persistent, the ground water table is progressively lowered until a point is reached at which the cost of extracting the ground water from any lower depth is greater than the benefits that could be obtained from any of the uses to which that water might be put. At this point, it is no longer economical to continue pumping and further declines in the ground water table are arrested. Ultimately, proper management of the relative magnitudes of the pumping cost

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