External Costs of Climate Change Adaptation: Agricultural Wells and Access to Drinking Water

Abstract

Adaptation actions taken to mitigate climate damages may impose negative externalities on vulnerable populations. We study this in the context of groundwater in California and evaluate the effects of annual fluctuations in weather and surface water supplies on agricultural well construction and access to drinking water. Using the population of geocoded wells, we show that farmers respond to extreme heat and surface water scarcity through agricultural well construction. This mitigating behavior by agricultural users imposes costs, as extreme heat and surface water scarcity reduce local groundwater levels and lead to domestic well failures. Our findings demonstrate that an unintended cost of agricultural groundwater extraction is access to drinking water supplies in disadvantaged communities.