Application of game theory for a groundwater conflict in Mexico

Exploitation of scarce water resources, particularly in areas of high demand, inevitably produces conflict among disparate stakeholders, each of whom may have their own set of priorities. In order to arrive at a socially acceptable compromise, the decisionmakers should seek an optimal trade-off between conflicting objectives that reflect the priorities of the various stakeholders. In this study, game theory was applied to a multiobjective conflict problem for the Alto Rio Lerma Irrigation District, located in the state of Guanajuato in Mexico, where economic benefits from agricultural production should be balanced with associated negative environmental impacts. The short period of rainfall in this area, combined with high groundwater withdrawals from irrigation wells, has produced severe aquifer overdraft. In addition, current agricultural practices of applying high loads of fertilizers and pesticides have contaminated regions of the aquifer. The net economic benefit to this agricultural region in the short-term lies with increasing crop yields, which requires large pumping extractions for irrigation as well as high chemical loading. In the longer term, this can produce economic loss due to higher pumping costs (i.e., higher lift requirements), or even loss of the aquifer as a viable source of water. Negative environmental impacts include continued diminishment of groundwater quality, and declining groundwater levels in the basin, which can damage surface water systems that support environmental habitats. The two primary stakeholders or players, the farmers in the irrigation district and the community at large, must find an optimal balance between positive economic benefits and negative environmental impacts. In this paper, game theory was applied to find the optimal solution between the two conflicting objectives among 12 alternative groundwater extraction scenarios. Different attributes were used to quantify the benefits and costs of the two objectives, and, following generation of the Pareto frontier or trade-off curve, four conflict resolution methods were then applied. (C) 2006 Elsevier Ltd. All rights reserved.