Withdrawing Water from an Aquifer: The Economics

Case Solution

Peter Debaere
Darden School of Business ()

Water is a renewable natural resource. Powered by solar energy and gravity, the global water cycle circulates indefinitely through the atmosphere, across continents and oceans. However, at the local level, water is sometimes more non-renewable in nature because it can be depleted at least to some extent. Removing too much water from an aquifer, which, for example, is only replenished to a limited extent, reduces the stored water. This note discusses groundwater extraction, how it is best carried out and how it depends on the respective institutional framework.

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