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The Journal of the Trachtenberg School of Public Policy and Public Administration at The George Washington University


In a region that is surrounded by multiple bodies of water, inundated by seasonal rains, and threatened by floods, water is not a resource that South Louisianians often think much about over consuming. However, over-pumping threatens one of the state’s largest groundwater reserves and sources of high-quality drinking water: the Southern Hills Aquifer System, which provides valuable freshwater supply to over 44,000 residents. This analysis assesses the relative effectiveness of three policy measures that could be implemented to limit saltwater intrusion into the aquifer: a cap-and-trade scheme for pumping permits, a tax on the water withdrawn, and a subsidy for industrial users not to withdraw. While each policy measure has both strengths and weaknesses in its ability to mitigate saltwater intrusion, a cap-and-trade scheme is the most feasible for the aquifer. The availability of data from the aquifer’s regulatory body, the high costs of conducting further studies, and the difficulty of measuring the numerous and extensive social and environmental externalities associated with over-extraction from the aquifer make the cap-and-trade scheme the most feasible of the three policy measures in this analysis.

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