Natural Resource Sustainability versus Livelihood Resilience: Model of Groundwater Exploitation Strategies in Developing Regions

Abstract

This paper designs a stylized model representing farming in water-scarce regions of South India to address the problem of managing depleting groundwater assets facing the threat of irreversible loss. Circumstances under which it may be optimal to forgo sustainable water use are evaluated in the context of farmers’ wealth and land endowments, crop choices, and risk of groundwater loss. Several policy and management implications are derived. Additionally, it is argued here that attaining livelihood resilience will entail a transformation process involving tradeoffs between different capital assets where it may be optimal for a farmer to forego the objective of maintaining groundwater sustainability. However, mere forgoing of sustainability may not ensure resilience for all. Initial wealth and risk endowments come into play, especially in heterogeneous communities.