Aquifers and climate: Incentives, information and institutions

Sustainable water provision for rural and urban territories, demands the understanding of institutions and incentives governing groundwater use under climate change. The extant institutional design in Colombia falls short to sustainably manage pervasive groundwater extraction and rule enforcement. This article is aimed at understanding the extant contractual delegation of groundwater extraction on farmers as the main water users across the country. This understanding is a relevant first step before undertaking the improvement of institutional arrangements to pursue real sustainability objectives of water use for agriculture. Despite pervasive free-riding water access, to a certain extent, extraction permits act like social contracts with implicit clauses determined by the law. In entitling extraction permits, principals unavoidably delegate on agents, although their interests tend to diverge. In this relationship, socio-physical information about groundwater status is certainly asymmetric, which is not problematic per se. Difficulties arise from widened gaps between groundwater management information portions managed by different actors. Besides, contract design should operate under the natural limits of aquifer systems, which are usually recognized after granting extraction permits. Notwithstanding crude caveats should be considered: incomplete delegation and hidden institutions exists, and if ignorance on informal and formal water volumes extracted continue, sustainable management of aquifers would not only be incomplete but an illusion. Real sustainable management of aquifer systems when deciding upon water extraction permits, should incorporate aquifer limits as an ex-ante condition and innovative incentives that trigger institutions towards capped aquifer extractions.