Environmental Economics and Policy Studies

, Volume 16, Issue 3, pp 263–278 | Cite as

Optimal groundwater management when recharge is declining: a method for valuing the recharge benefits of watershed conservation

  • Kimberly Burnett
  • Christopher A. Wada
Research Article


Demand for water will continue to increase as per capita income rises and the population grows, and climate change can exacerbate the problem through changes in precipitation patterns and quantities, evapotranspiration, and land cover—all of which directly or indirectly affect the amount of water that ultimately infiltrates back into groundwater aquifers. We develop a dynamic management framework that incorporates alternative climate-change (and hence, recharge) scenarios and apply it to the Pearl Harbor aquifer system on O‘ahu, Hawai‘i. By calculating the net present value of water for a variety of plausible climate scenarios, we are able to estimate the indirect value of groundwater recharge that would be generated by watershed conservation activities. Enhancing recharge increases welfare by lowering the scarcity value of water in both the near term and the future, as well as delaying the need for costly alternatives such as desalination. For a reasonable range of parameter values, we find that the present value gain of maintaining recharge ranges from $31.1 million to over $1.5 billion.


Groundwater management Climate change adaptation Watershed conservation 

JEL Codes

Q25 Q54 



This research was supported by the United States Geological Survey (USGS) Grant No. 2012HI361B through the University of Hawaii at Manoa (UHM) Water Resources Research Center (WRRC). Our conclusions should not be attributed to USGS, UHM, or WRRC.


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Copyright information

© Springer Japan 2014

Authors and Affiliations

  1. 1.University of Hawai‘i Economic Research OrganizationHonoluluUSA

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