Transboundary extraction of groundwater in the presence of hydraulic fracturing

Abstract

We studied transboundary groundwater management problems in the presence of hydraulic fracturing. We found that the presence of risk suggests there should be caution when considering hydraulic fracturing. Our results from the cooperative solution show a decrease in hydraulic fracturing and increase in the steady state survival rate of groundwater. We also provide a Pigouvian type tax that could be imposed on natural gas developers.

Introduction to the special issue on “Economic modeling of natural resources for sustainable development”

“…The paper by Poudel and Paudel () looks at the role of risk in groundwater extraction. They develop a transboundary game‐theoretical model where agents are extracting groundwater and natural gas, but the natural gas extraction from hydraulic fracturing impacts both groundwater quality and quantity.…”