National Academies Press: OpenBook
Suggested Citation:"Front Matter." National Research Council. 1997. Valuing Ground Water: Economic Concepts and Approaches. Washington, DC: The National Academies Press. doi: 10.17226/5498.
×

Valuing Ground Water

Economic Concepts and Approaches

Committee on Valuing Ground Water

Water Science and Technology Board

Commission on Geosciences, Environment, and Resources

National Research Council

NATIONAL ACADEMY PRESS
Washington, D.C.
1997

Suggested Citation:"Front Matter." National Research Council. 1997. Valuing Ground Water: Economic Concepts and Approaches. Washington, DC: The National Academies Press. doi: 10.17226/5498.
×

NATIONAL ACADEMY PRESS
2101 Constitution Avenue, NW Washington, DC 20418

NOTICE: The project that is the subject of this report was approved by the Governing Board of the National Research Council, whose members are drawn from the councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The members of the committee responsible for the report were chosen for their special competences and with regard for appropriate balance.

This report has been reviewed by a group other than the authors according to procedures approved by a Report Review Committee consisting of members of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine.

Support for this project was provided by the U.S. Department of Energy, U.S. Environmental Protection Agency Grant No. C-R-823279-01-3, U.S. Department of Defense/Defense Supply Service Grant No. DASW01-95-M-6159, and the National Water Research Institute.

Library of Congress Cataloging-in-Publication Data

Valuing ground water : economic concepts and approaches / Committee on Valuing Ground Water, Water Science and Technology Board, Commission on Geosciences, Environment, and Resources, National Research Council.

p. cm.

Includes bibliographical references and index.

ISBN 0-309-05640-3

1. Groundwater—Valuation. I. National Research Council (U.S.). Committee on Valuing Ground Water.

HD1691.V35 1997

333.91′04—dc21 97-4837

Valuing Ground Water: Economic Concepts and Approaches is available from the
National Academy Press,
2101 Constitution Ave., NW, Box 285, Washington, DC 204185 (1-800-824-6242; http://www.nap.edu).

Cover art by Y. David Chung. Chung is a graduate of the Corcoran School of Art in Washington, D.C. He has exhibited his work throughout the country, including the Whitney Museum in New York, the Washington Project for the Arts in Washington, D.C., and the Williams College Museum of Art in Williamstown, Massachusetts.

Copyright 1997 by the National Academy of Sciences. All rights reserved.

Printed in the United States of America

Suggested Citation:"Front Matter." National Research Council. 1997. Valuing Ground Water: Economic Concepts and Approaches. Washington, DC: The National Academies Press. doi: 10.17226/5498.
×

COMMITTEE ON VALUING GROUND WATER

LARRY W. CANTER, Chair,

University of Oklahoma, Norman

CHARLES W. ABDALLA,

Pennsylvania State University, University Park

RICHARD M. ADAMS,

Oregon State University, Corvallis

J. DAVID AIKEN,

University of Nebraska, Lincoln

SANDRA O. ARCHIBALD,

Hubert H. Humphrey Institute of Public Affairs, Minneapolis, Minnesota

SUSAN CAPALBO,

Montana State University, Bozeman

PATRICK A. DOMENICO,

Texas A&M University, College Station ( from September 1994 to November 1995)

PETER G. HUBBELL,

Water Resources Associates, Inc., Tampa, Florida

KATHARINE L. JACOBS,

Arizona Department of Water Resources, Tucson

AARON MILLS,

University of Virginia, Charlottesville

WILLIAM R. MILLS, JR.,

Orange County Water District, Fountain Valley, California

PAUL ROBERTS,

Standford University, California

THOMAS C. SCHELLING,

University of Maryland, College Park

THEODORE TOMASI,

University of Delaware, Newark

WSTB Liaison

HENRY J. VAUX, JR.,

University of California, Riverside

Staff

STEPHEN D. PARKER, Study Director (September 1994 through January 1996)

SHEILA D. DAVID, Study Director (January 1996 through April 1997)

ETAN GUMERMAN, Project Coordinator (September 1994 through October 1996)

MARY BETH MORRIS, Senior Project Assistant (September 1994 through July 1996)

ELLEN A. DE GUZMAN, Project Assistant (July 1996 through April 1997)

Consultant

JOEL DARMSTADTER,

Resources for the Future (September 1994 through June 1996)

Suggested Citation:"Front Matter." National Research Council. 1997. Valuing Ground Water: Economic Concepts and Approaches. Washington, DC: The National Academies Press. doi: 10.17226/5498.
×

WATER SCIENCE AND TECHNOLOGY BOARD

DAVID L. FREYBERG, Chair,

Stanford University, California

BRUCE E. RITTMANN, Vice Chair,

Northwestern University, Evanston, Illinois

LINDA ABRIOLA,

University of Michigan, Ann Arbor

JOHN BRISCOE,

The World Bank, Washington, D.C.

WILLIAM M. EICHBAUM,

The World Wildlife Fund, Washington, D.C.

WILFORD R. GARDNER,

University of California, Berkeley

EVILLE GORHAM,

University of Minnesota, St. Paul

THOMAS M. HELLMAN,

Bristol-Myers Squibb Company, New York, New York

CHARLES D. D. HOWARD,

Charles Howard and Associates, Ltd., Victoria, British Columbia

CAROL A. JOHNSTON,

University of Minnesota, Duluth

WILLIAM M. LEWIS, JR.,

University of Colorado, Boulder

JOHN W. MORRIS,

J. W. Morris, Ltd., Arlington, Virginia

CHARLES R. O'MELIA,

The Johns Hopkins University, Baltimore, Maryland

REBECCA T. PARKIN,

American Public Health Association, Washington, D.C.

IGNACIO RODRIGUEZ-ITURBE,

Texas A&M University, College Station

FRANK W. SCHWARTZ,

Ohio State University, Columbus

HENRY J. VAUX, JR.,

University of California, Riverside

Staff

STEPHEN D. PARKER, Director

SHEILA D. DAVID, Senior Staff Officer

CHRIS ELFRING, Senior Staff Officer

JACQUELINE A. MACDONALD, Senior Staff Officer

GARY D. KRAUSS, Staff Officer

JEANNE AQUILINO, Administrative Associate

ANITA A. HALL, Administrative Assistant

ANGELA F. BRUBAKER, Research Assistant

ELLEN A. DE GUZMAN, Project Assistant

Suggested Citation:"Front Matter." National Research Council. 1997. Valuing Ground Water: Economic Concepts and Approaches. Washington, DC: The National Academies Press. doi: 10.17226/5498.
×

COMMISSION ON GEOSCIENCES, ENVIRONMENT, AND RESOURCES

GEORGE M. HORNBERGER, Chair,

University of Virginia, Charlottesville

PATRICK R. ATKINS,

Aluminum Company of America, Pittsburgh, Pennsylvania

JAMES P. BRUCE,

Canadian Climate Program Board, Ottawa, Ontario

WILLIAM L. FISHER,

University of Texas, Austin

JERRY F. FRANKLIN,

University of Washington, Seattle

THOMAS E. GRAEDEL,

Yale University, New Haven, Connecticut

DEBRA KNOPMAN,

Progressive Foundation, Washington, D.C.

KAI N. LEE,

Williams College, Williamstown, Massachusetts

PERRY L. McCARTY,

Stanford University, California

JUDITH E. McDOWELL,

Woods Hole Oceanographic Institution, Massachusetts

RICHARD A. MESERVE,

Covington & Burling, Washington, D.C.

S. GEORGE PHILANDER,

Princeton University, New Jersey

RAYMOND A. PRICE,

Queen's University at Kingston, Ontario

THOMAS C. SCHELLING,

University of Maryland, College Park

ELLEN SILBERGELD,

University of Maryland Medical School, Baltimore

VICTORIA J. TSCHINKEL,

Landers and Parsons, Tallahassee, Florida

E-AN ZEN,

University of Maryland, College Park

Staff

STEPHEN RATTIEN, Executive Director

STEPHEN D. PARKER, Associate Executive Director

MORGAN GOPNIK, Assistant Executive Director

GREGORY SYMMES, Reports Officer

SANDI FITZPATRICK, Administrative Associate

MARQUITA SMITH, Administrative Assistant/Technology Analyst

Suggested Citation:"Front Matter." National Research Council. 1997. Valuing Ground Water: Economic Concepts and Approaches. Washington, DC: The National Academies Press. doi: 10.17226/5498.
×

The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished scholars engaged in scientific and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare. Upon the authority of the charter granted to it by the Congress in 1863, the Academy has a mandate that requires it to advise the federal government on scientific and technical matters. Dr. Bruce M. Alberts is president of the National Academy of Sciences.

The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achievements of engineers. Dr. William A. Wulf is president of the National Academy of Engineering.

The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examination of policy matters pertaining to the health of the public. The Institute acts under the responsibility given to the National Academy of Sciences by its congressional charter to be an adviser to the federal government and, upon its own initiative, to identify issues of medical care, research, and education. Dr. Kenneth I. Shine is president of the Institute of Medicine.

The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academy's purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Academy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Council is administered jointly by both Academies and the Institute of Medicine. Dr. Bruce M. Alberts and Dr. William A. Wulf are chairman and vice chairman, respectively, of the National Research Council.

Suggested Citation:"Front Matter." National Research Council. 1997. Valuing Ground Water: Economic Concepts and Approaches. Washington, DC: The National Academies Press. doi: 10.17226/5498.
×

Preface

Ground water, while providing much of the nation's supplies of water for domestic, industrial, and agricultural purposes, is surprisingly underappreciated and usually undervalued. Water managers at various levels of government are faced with an array of decisions involving development, protection, and/or remediation of ground water resources. Examples of questions basic to such decisions at the local level include:

  1. Should ground water be used singly or in conjunction with surface water supplies to meet increasing water usage requirements?

  2. Should a comprehensive water conservation program be implemented in order to extend the availability of ground water and minimize or preclude ground water depletion?

Examples of questions basic to decisions at the state or federal level include:

  1. Are the benefits of ground water protection programs greater than their costs, and how should such wellhead protection efforts be funded?

  2. How should ground water remediation projects be prioritized given that the costs of remedial actions typically far exceed available funding? Should the value of ground water resources be considered in deciding if remediation efforts should be undertaken at a site?

Valuation of ground water resources is critical in determining an efficient outcome in each of these examples as well as many other ground water development, protection, and/or remediation projects, programs, or policy decisions. However, the ground water resource, a nonmarket good, is difficult to value;

Page viii Cite
Suggested Citation:"Front Matter." National Research Council. 1997. Valuing Ground Water: Economic Concepts and Approaches. Washington, DC: The National Academies Press. doi: 10.17226/5498.
×

and, as a result, economic valuation and future considerations have historically played almost no part in decision-making.

The fundamental need to value natural resources was recognized in a 1990 report of the Science Advisory Board (SAB) of the U.S. Environmental Protection Agency (EPA, 1990). Based on the review of comparative risk assessments of environmental problems, a committee of 39 distinguished scientists, engineers, and other experts drawn from academia, state government, industry, and public interest groups developed ten recommendations; of relevance to this report is Recommendation 10—EPA should develop improved methods to value natural resources and to account for long-term environmental effects in its economic analyses (EPA, 1990).

In 1994 the U.S. Environmental Protection Agency requested that the National Research Council (NRC) appoint a committee to study approaches to assessing the future economic value of ground water, and the economic impact of the contamination or depletion of these resources. This committee was appointed in 1994 under the auspices of the NRC's Water Science and Technology Board. The committee was charged to:

  1. review and critique various approaches for estimating the future value of uncontaminated ground water in both practice and in theory;

  2. identify areas in which existing approaches require further development and promising new approaches which might be developed;

  3. delineate the circumstances under which various approaches would be preferred in practice for various applications of decision-making regarding long-term resource use and management;

  4. outline legislative and policy considerations in connection with the use and implementation of recommended approaches, and related research needs; and

  5. illustrate, through real or hypothetical case examples, how recommended procedures would be applied in practice for representative applications.

Due to the relevance of the committee charge to other public interest groups and agencies, three other sponsors provided financial support for this NRC study in addition to EPA: the National Water Research Institute, the U.S. Department of Defense, and the U.S. Department of Energy.

The focus of the study on ground water valuation and the composition of the committee established the need for economists to work with ground water experts. Disciplines represented on the committee included agricultural economics, environmental engineering, hydrogeology, microbiology, public policy, resource economics, and water law. The members were drawn from academia, private consultants, and water management positions in local government.

While the assignment was challenging, the committee quickly agreed on three matters that provided its starting points. First, an interdisciplinary approach is necessary for ground water valuation studies. Second, when valuing ground water, the in situ and ecological services must be recognized along with the more

Suggested Citation:"Front Matter." National Research Council. 1997. Valuing Ground Water: Economic Concepts and Approaches. Washington, DC: The National Academies Press. doi: 10.17226/5498.
×

obvious extractive services. Finally, it was recognized that common terminology was not available as a foundation for this study. Thus concepts and principles from environmental economics and ground water management had to be appropriately integrated to provide a basis for the work of the committee.

The committee has completed its task and, in so doing, has received considerable assistance from the NRC staff. Accordingly, on behalf of the committee, I wish to express our thanks to the following persons: Sheila David, Study Director; Etan Gumerman, Project Coordinator; Mary Beth Morris, Project Assistant; Ellen de Guzman, Project Assistant; Joel Darmstadter, Consultant; and Steve Parker, Director of the Water Science and Technology Board (WSTB). In addition, Henry Vaux, WSTB member and liaison to this committee, provided both helpful guidance and technical input.

Finally, I wish to express my appreciation to all committee members for their willingness to discuss new concepts from an interdisciplinary perspective, to prepare and revise materials for this report, and to strive for consensus-building on key issues. We have all learned from this process!

Larry W. Canter,

Chairman

Reference

U.S. EPA, 1990. Reducing Risk: Setting Priorities and Strategies for Environmental Protection, Science Advisory Board, Relative Risk Reduction Strategies Committee, U.S. EPA, Washington, D.C.

Suggested Citation:"Front Matter." National Research Council. 1997. Valuing Ground Water: Economic Concepts and Approaches. Washington, DC: The National Academies Press. doi: 10.17226/5498.
×
This page in the original is blank.
Suggested Citation:"Front Matter." National Research Council. 1997. Valuing Ground Water: Economic Concepts and Approaches. Washington, DC: The National Academies Press. doi: 10.17226/5498.
×
Suggested Citation:"Front Matter." National Research Council. 1997. Valuing Ground Water: Economic Concepts and Approaches. Washington, DC: The National Academies Press. doi: 10.17226/5498.
×

4

 

ECONOMIC VALUATION OF GROUND WATER

 

68

   

History of Economic Valuation of Natural/Environmental Resources,

 

68

   

The Economic Approach to Valuation,

 

70

   

Methods for Estimating the Economic Value of Natural/Environmental Resources,

 

73

   

Current Knowledge of Ground Water Values,

 

86

   

Conclusions and Recommendations,

 

99

   

References,

 

101

5

 

LEGAL CONSIDERATIONS, VALUATION, AND GROUND WATER POLICY

 

105

   

Valuation and Ground Water Allocation,

 

106

   

Valuation and Ground Water Quality Protection,

 

114

   

Changing Environmental Priorities: Policy Dimensions of Ground Water Valuation,

 

118

   

Legal Issues in Redefining Ground Water Rights,

 

121

   

Reducing Risk and Valuing Ground Water,

 

122

   

Research Needs,

 

122

   

Recommendations,

 

125

   

References,

 

125

6

 

CASE STUDIES

 

127

   

Challenges in Water Quality Management, Treasure Valley, Oregon,

 

130

   

Competing Uses of an Aquifer, Laurel Ridge, Pennsylvania,

 

133

   

The Buffer Value of Ground Water, Albuquerque, New Mexico,

 

136

   

The Buffer Value of Ground Water, Arvin-Edison Water Storage District, Southern California,

 

140

   

The Value of Averting Sea Water Intrusion, Orange County, California,

 

142

   

Incorporating the Value of Ground Water in Superfund Decision-Making, Woburn, Massachusetts,

 

149

   

Applying Ground Water Valuation Techniques, Tucson, Arizona,

 

153

   

Lessons Learned,

 

164

 

 

APPENDIXES

 

 

   

A GLOSSARY

 

169

   

B A PORTION OF A SAMPLE CONTINGENT VALUE METHOD QUESTIONNAIRE

 

174

   

C BIOGRAPHICAL SKETCHES OF COMMITTEE MEMBERS

 

177

 

 

INDEX

 

183

Page xiii Cite
Suggested Citation:"Front Matter." National Research Council. 1997. Valuing Ground Water: Economic Concepts and Approaches. Washington, DC: The National Academies Press. doi: 10.17226/5498.
×

Valuing ground Water

Suggested Citation:"Front Matter." National Research Council. 1997. Valuing Ground Water: Economic Concepts and Approaches. Washington, DC: The National Academies Press. doi: 10.17226/5498.
×
This page in the original is blank.
Suggested Citation:"Front Matter." National Research Council. 1997. Valuing Ground Water: Economic Concepts and Approaches. Washington, DC: The National Academies Press. doi: 10.17226/5498.
×
Page R1
Suggested Citation:"Front Matter." National Research Council. 1997. Valuing Ground Water: Economic Concepts and Approaches. Washington, DC: The National Academies Press. doi: 10.17226/5498.
×
Page R2
Suggested Citation:"Front Matter." National Research Council. 1997. Valuing Ground Water: Economic Concepts and Approaches. Washington, DC: The National Academies Press. doi: 10.17226/5498.
×
Page R3
Suggested Citation:"Front Matter." National Research Council. 1997. Valuing Ground Water: Economic Concepts and Approaches. Washington, DC: The National Academies Press. doi: 10.17226/5498.
×
Page R4
Suggested Citation:"Front Matter." National Research Council. 1997. Valuing Ground Water: Economic Concepts and Approaches. Washington, DC: The National Academies Press. doi: 10.17226/5498.
×
Page R5
Suggested Citation:"Front Matter." National Research Council. 1997. Valuing Ground Water: Economic Concepts and Approaches. Washington, DC: The National Academies Press. doi: 10.17226/5498.
×
Page R6
Suggested Citation:"Front Matter." National Research Council. 1997. Valuing Ground Water: Economic Concepts and Approaches. Washington, DC: The National Academies Press. doi: 10.17226/5498.
×
Page R7
Page viii Cite
Suggested Citation:"Front Matter." National Research Council. 1997. Valuing Ground Water: Economic Concepts and Approaches. Washington, DC: The National Academies Press. doi: 10.17226/5498.
×
Page R8
Suggested Citation:"Front Matter." National Research Council. 1997. Valuing Ground Water: Economic Concepts and Approaches. Washington, DC: The National Academies Press. doi: 10.17226/5498.
×
Page R9
Suggested Citation:"Front Matter." National Research Council. 1997. Valuing Ground Water: Economic Concepts and Approaches. Washington, DC: The National Academies Press. doi: 10.17226/5498.
×
Page R10
Suggested Citation:"Front Matter." National Research Council. 1997. Valuing Ground Water: Economic Concepts and Approaches. Washington, DC: The National Academies Press. doi: 10.17226/5498.
×
Page R11
Suggested Citation:"Front Matter." National Research Council. 1997. Valuing Ground Water: Economic Concepts and Approaches. Washington, DC: The National Academies Press. doi: 10.17226/5498.
×
Page R12
Page xiii Cite
Suggested Citation:"Front Matter." National Research Council. 1997. Valuing Ground Water: Economic Concepts and Approaches. Washington, DC: The National Academies Press. doi: 10.17226/5498.
×
Page R13
Suggested Citation:"Front Matter." National Research Council. 1997. Valuing Ground Water: Economic Concepts and Approaches. Washington, DC: The National Academies Press. doi: 10.17226/5498.
×
Page R14
Next: Summary »
Valuing Ground Water: Economic Concepts and Approaches Get This Book
×
Buy Paperback | $78.00 Buy Ebook | $64.99
MyNAP members save 10% online.
Login or Register to save!
Download Free PDF

Because water in the United State has not been traded in markets, there is no meaningful estimate of what it would cost if it were traded. But failing to establish ground water's value—for in situ uses such as sustaining wetlands as well as for extractive uses such as agriculture—will lead to continued overuse and degradation of the nation's aquifers.

In Valuing Ground Water an interdisciplinary committee integrates the latest economic, legal, and physical knowledge about ground water and methods for valuing this resource, making it comprehensible to decision-makers involved in Superfund cleanup efforts, local wellhead protection programs, water allocation, and other water-related management issues. Using the concept of total economic value, this volume provides a framework for calculating the economic value of ground water and evaluating tradeoffs between competing uses of it. Included are seven case studies where ground-water valuation has been or could be used in decisionmaking.

The committee examines trends in ground-water management, factors that contribute to its value, and issues surrounding ground-water allocation and legal rights to its use. The book discusses economic valuation of natural resources and reviews several valuation methods.

Presenting conclusions, recommendations, and research priorities, Valuing Ground Water will be of interest to those concerned about ground-water issues: policymakers, regulators, economists, attorneys, researchers, resource managers, and environmental advocates.

  1. ×

    Welcome to OpenBook!

    You're looking at OpenBook, NAP.edu's online reading room since 1999. Based on feedback from you, our users, we've made some improvements that make it easier than ever to read thousands of publications on our website.

    Do you want to take a quick tour of the OpenBook's features?

    No Thanks Take a Tour »
  2. ×

    Show this book's table of contents, where you can jump to any chapter by name.

    « Back Next »
  3. ×

    ...or use these buttons to go back to the previous chapter or skip to the next one.

    « Back Next »
  4. ×

    Jump up to the previous page or down to the next one. Also, you can type in a page number and press Enter to go directly to that page in the book.

    « Back Next »
  5. ×

    Switch between the Original Pages, where you can read the report as it appeared in print, and Text Pages for the web version, where you can highlight and search the text.

    « Back Next »
  6. ×

    To search the entire text of this book, type in your search term here and press Enter.

    « Back Next »
  7. ×

    Share a link to this book page on your preferred social network or via email.

    « Back Next »
  8. ×

    View our suggested citation for this chapter.

    « Back Next »
  9. ×

    Ready to take your reading offline? Click here to buy this book in print or download it as a free PDF, if available.

    « Back Next »
Stay Connected!