Collective Utility: A Systems Approach for the Utilization of Water Resources

Abstract

In the semiarid southwestern U.S. where competition for water is fierce between competing users, no regional agency controls water allocation, and as a result, much court litigation ensues. This paper attempts to develop a model for optimal allocation of water resources and to apply the model to a specific case study. In November 1969, the largest farming interest in the Sahuarita-continental area near Tucson filed a court suit seeking first to reduce the amount of groundwater used by 4 nearby copper mines, and then to allocate the water more evenly among various interests in the area. The farming interest maintained that the mines' drawdown on the groundwater table would soon deplete the supply to the point where agriculture would become impossible. The model utilizes the concept of collective utility which postulates the existence of an economic decision maker (edp). To get around the problem of determination of net revenue functions, the theory compares the relative desirability of neighboring economic states. The edp has the power to impose groundwater-use taxes in such a way as to maximize overall growth of collective utility in the Sahuarita-continental area, taking into account the externalities of the resource consumption. The mathematical analysis is presented in detail.