Withdrawing Water from an Aquifer: The Economics
Water is a renewable natural resource. Driven by solar energy and gravity, the global water cycle indefinitely circulates water through the atmosphere, over continents, and across oceans. On a more local level, however, water sometimes has more of a nonrenewable character because it can be depleted, at least to some degree. Withdrawing too much water from an aquifer that has only limited recharge, for example, diminishes stored water. This note discusses groundwater withdrawal, how it is optimally done, and how it depends on the particular institutional setting.