An economic analysis of two groundwater allocation programs for the Salinas Valley
Luetzow, Thomas C.
Moore, Thomas P.
Gates, William R.
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This thesis compares the economic cost of the Monterey County Water Resources Agency (MCWRA) groundwater allocation plan for the Salinas Valley Groundwater Basin (SVGB) to a proposed free market allocation plan using transferable water rights. This analysis develops a detailed free market allocation program. It also estimates implementation costs for both plans, including the initial investment in office facilities and water use monitoring equipment, and monthly operational costs. The thesis analyzes representative water users from the Urban, Industrial and Agricultural sectors of the valley. A marginal cost curve for reducing water use is developed for each representative. These curves are used to determine the compliance costs for each allocation plan. This study concludes that the free market allocation program is more efficient than the MCWRA's allocation program, assuming both plans use similar water use monitoring systems. Furthermore, the current MCWRA allocation program does not prevent overdrafting in the SVGB
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