Abstract

Subsurface water has a substantial economic value in drinking and irrigation water across the globe Failure to recognise the economic value has led to wasteful and environmentally damaging uses of the resource When the groundwater resource gets depleted groundwater development costs increase and the aquifers capacity to provide the variety of environmental services decreases with sinking groundwater level and diminished natural discharge The cost of abstracting the fresh water increases with the need to lift groundwater from increasingly greater depths and hence the cost-benefit ratio of groundwater use changes over time The procedure of discounting adjusts for future values of related services by accounting for time differences Environmental costs are rather difficult to assess and incorporate in groundwater resources management Environmental damage costs refer to non-use values attached to a healthy functioning aquatic ecosystem while the costs to those who use the water environment refer to the corresponding use values This paper highlights the aspects relevant for decisions to groundwater management and rate of storage depletion and its financial implications