Advancing Sustainable Groundwater Management With a Hydro‐Economic System Model: Investigations in the Harney Basin, Oregon

Groundwater resources frequently trend toward unsustainable levels because, absent effective institutions, individual water users generally act independently without considering the impacts on other users. Hydro‐economic models (HEMs) of human‐natural systems can play a positive role toward successful groundwater management by yielding valuable knowledge and insight. The current study explores how an HEM that captures essential physical and economic characteristics of a system can shed light on the system's processes and dynamics to benefit stakeholders, managers, and also researchers. These propositions are illustrated using the Harney Basin, Oregon, which has seen large groundwater declines in the past 20 years. The HEM shows that: (a) although current groundwater pumping rates will gradually raise costs and reduce well yields, irrigators gain the highest aggregate economic return by continuing current pumping; (b) lowland areas of the basin are hydrologically connected, which limits the efficacy of remedies focused on regulations only in some portions of the basin; (c) community expectations regarding the efficacy of several proposed solutions are overly optimistic; and (d) the study's scenarios identify interventions that would stabilize the groundwater system and prevent additional adverse impacts on residential and livestock wells and groundwater‐dependent ecosystems. These interventions would require limiting groundwater pumping by nearly half and reducing annual profits by $7.5–$9.0M. The HEM also demonstrated its value to researchers: its insights shifted attention toward questions about Oregon's existing groundwater institutions and their inability to adaptively manage the transition from abundant groundwater to scarce groundwater in a timely manner. Plain Language Summary This study develops a hydro‐economic model (HEM) linking an economic model of irrigated agricultural production with a three‐dimensional groundwater hydrology model of the Harney Basin, Oregon, to better understand the causes and possible solutions to the large groundwater declines in the past 20 years. Those declines have had adverse impacts on the farmers who irrigate with groundwater, but also on residential wells and environmental flows supplying groundwater‐dependent ecosystems. The HEM simulates 30‐year future scenarios for a baseline and alternative scenarios representing interventions aimed at stabilizing the groundwater system. Results reveal that although current grou