APPLICATION OF OPTIMAL CONTROL THEORY IN GROUNDWATER RESOURCE ECONOMICS
B.S. CHAITRA
Though water is the most copiously available resource on this planet, is fast becoming scarce. Groundwater utilization is one aspect of a more general form of the common property resource. Since rights to percolating water are normally obtained only by "capture", pumpers have an incentive to withdraw water at a rate greater than would otherwise be rational for fear that the withdrawals of others will lower water levels in their own well.
With such a heavy pressure on resource and government policy of providing electricity at subsidized prices resulted in large scale exploitation of ground water. Consequently, allocating groundwater between uses, between users and between generations is becoming a critical problem. Therefore the groundwater exploitation in several critical areas needs to be regulated so as to ensure sustainability and preclude serious problems of intergenerational and intragenerational inequality in access to groundwater.
In this regard optimal control theory is rapidly becoming one of the fundamental tools of analysis, since this theory represents dynamic allocation problem. The objective of optimal control problem is to make temporally optimal allocation of a natural resources over a given time horizon, that will maximize the net present value of benefits from extracting the resource over the entire period.
In this seminar, application of optimal control theory in groundwater management with stochastic recharge and to estimate the benefits of optimal extraction and to compare this with the benefits from competitive extraction is presented in detail.
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