From my (limited) understanding of agribusiness, particularly in California, it will be hard to be cost competitive with current water sources moving forward as they are heavily subsidized (read: near-zero costs).
The upfront cost from my understanding is in drilling a deep well. Those wells keep getting deeper and costing more. But, past that, it's just the cost of running the pumps to drain the underground aquifers. IIUC the cost of water is free plus the cost of harvesting it from the commons.
I might be wrong here, but all the billboards that say "is growing food wasting water?" along the interstates in California don't really matter over long time horizons. They're advocating for draining the water tables. You can't do that forever. Doesn't matter if it was a "waste" or not, it'll be gone soon and they'll have to pay to pull water from somewhere else or stop growing crops there (or the state will pay to give them water).
When "free" water runs out, other water sources will suddenly be cost effective. But it's hard to compete with free.
Pumping is at cost to them, but irrigating they pay a whole $20 per acre foot from our local water district. The wells are used when they want more than allotted.
Many of these canals are quite old and while they do require some maintenance, the upfront costs of the dams, reservoirs , and canals are largely paid off. Those maintenance costs and any upgrades are paid by the district customers.
The upfront cost from my understanding is in drilling a deep well. Those wells keep getting deeper and costing more. But, past that, it's just the cost of running the pumps to drain the underground aquifers. IIUC the cost of water is free plus the cost of harvesting it from the commons.
I might be wrong here, but all the billboards that say "is growing food wasting water?" along the interstates in California don't really matter over long time horizons. They're advocating for draining the water tables. You can't do that forever. Doesn't matter if it was a "waste" or not, it'll be gone soon and they'll have to pay to pull water from somewhere else or stop growing crops there (or the state will pay to give them water).
When "free" water runs out, other water sources will suddenly be cost effective. But it's hard to compete with free.