ESTIMATING POTENTIAL GAINS TO COOPERATION FOR LIMITED WATER RESOURCES ALONG THE RIO GRANDE

Abstract

We examine the potential gains from cooperation in the withdrawal of water from the Hueco Bolson aquifer that provides a substantial portion of municipal water supplies in El Paso, Texas and Ciudad Juarez, Mexico. The aquifer lies beneath the international border, and both cities operate independently regarding pumping rates and annual withdrawals. The natural the rate of recharge has been less than the sum of annual withdrawals since the early 1900s, and the resource likely will be depleted if current pumping rates are maintained. Optimal pumping rates and depths are described using a model that maximizes the sum of net benefits obtained from municipal water supplies in both cities. Those results are compared with pumping rates and depths obtained using a dynamic game-theory model of strategic behavior involving the two cities.Resource /Energy Economics and Policy,