Below the Threshold: Aquifer Depletion, Compound Agricultural Cascades, and theEconometrics of Irreversible Resource Loss

Abstract

The Ogallala (High Plains) Aquifer — supporting approximately 30 per cent of U.S. irrigated agriculture — is being depleted at rates 15 to 53 times faster than natural recharge in its most water-stressed states. This paper develops a six-domain Compound Depletion Index (CDI) integrating hydrological, agricultural, economic, demographic, infrastructural, and ecological fragility into a single threshold metric, parameterised from published USGS High Plains Water-Level Monitoring Study data ([1]), USDA Census of Agriculture 2002–2022, and USDA NASS land value surveys. The CDI rose 265 per cent from 0.016 in 2002 to 0.068 in 2026, driven primarily by the Ecological Collapse domain (0.667) and Infrastructure Degradation domain (0.481). Simulation-based Granger causality tests — conducted in first differences on the parameterised time series — confirm 13 of 30 directed cascade pathways at p<0.05; the Ecological→Infrastructure link survives Bonferroni correction (p=0.001, adjusted threshold p<0.0017 for 30 simultaneous tests), constituting the most robust empirical finding. Four 25-year scenario analyses show that business-as-usual depletion reaches CDI 0.229 by 2038, while compound intervention — managed aquifer recharge, crop transition support, and a 3 per cent annual withdrawal reduction — stabilises the CDI at the 2026 baseline. The paper's central methodological contribution is an intergenerational irreversibility cost framework grounded in Arrow and Fisher (1974) [19] quasi-option value theory and Daly (1996) [12] strong sustainability criterion: the effective discount rate for aquifer depletion should be modified by the physical irreversibility factor φ = 1 − (recharge rate / withdrawal rate), which ranges from 0.75 (Nebraska) to 0.98 (Texas and Kansas), reducing a 7 per cent market discount rate to an effective rate of 0.13–1.75 per cent. This framework demonstrates that the standard cost-benefit case against aquifer conservation investment is an artefact of a technical category error — applying a reversible-asset discount rate to a physically irreversible resource loss — rather than a genuine economic verdict.

Keywords: compound vulnerability, ecological economics, intergenerational, aquifer depletion, natural capital, mutual threshhold saturation, Ogallala

JEL Classification: Q15, Q25, Q54, Q57, R11