CNH-S: What Does It Take to Cooperate Over Transboundary Groundwater Resources?

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While crucial to the health and livelihood of billions of people, groundwater is being depleted globally at alarming rates. Groundwater is a shared resource, where pumping by any user decreases groundwater levels and thus the ability of other users to also exploit this resource. This phenomenon can cause users to strategically over-exploit groundwater in a "pumping race" that can accelerate its depletion. Unfortunately, few regulations address this tragedy of the commons because the underground nature of the resource makes it particularly challenging to monitor. This research seeks to estimate the extent to which strategic over-exploitation accelerates global groundwater depletion, and to identify new mechanisms to explain why groundwater is particularly prone to strategic over-exploitation, especially at jurisdictional boundaries. These new insights will be used to explore new regulatory approaches to curtail this behavior. This research will benefit society by integrating hydrology, economics, and law to improve cooperation over shared groundwater resources. It will also provide interdisciplinary training for three graduate students and create valuable infrastructure that will be shared broadly with businesses and the public sector. Adverse selection is the tendency for markets to break down under asymmetric information, because uncertainties cause agents to attribute ulterior motives to other agents' willingness to make a deal. A similar mechanism likely arises for groundwater due to asymmetric hydro-geologic uncertainty. This research will test the hypothesis that adverse selection explains why agents do not cooperate over shared groundwater resources. The project has four components: (1) perform a global assessment of the role played by tragedies of the commons in the depletion of international aquifers; (2) derive a micro-economic model to investigate whether adverse selection can explain the dearth of international agreements on shared groundwater; (3) develop coupled human/groundwater models to investigate why cooperation has emerged in specific aquifers, through case studies in Europe and South America; and (4) investigate the potential for satellite data to attenuate information asymmetry and facilitate cooperation by averting adverse selection, focusing on a vulnerable aquifer identified in component (1).This award reflects NSF's statutory mission and has been deemed worthy of support through evaluation using the Foundation's intellectual merit and broader impacts review criteria.