Groundwater Management Amidst a Changing Climate: A More Severe Climate Could Decrease the Value of Groundwater Conservation

Abstract Persistent groundwater depletion in semi‐arid agricultural regions threatens rural livelihoods and global food security. Climate change is commonly expected to exacerbate this issue by increasing irrigation demands, making groundwater conservation essential for enhancing climate resilience. However, previous studies often overlook the various ways climate change influences farmers' decisions and, in turn, groundwater conservation outcomes. This study employs an agent‐based hydro‐economic model (ABM‐MODFLOW) to assess how climate change interacts with groundwater management policies in the U.S. High Plains and affects hydrologic and economic outcomes. ABM‐MODFLOW explicitly accounts for climate change impacts on crop productivity, farmers' profit‐driven planting and irrigation decisions, and groundwater storage under different management scenarios. We simulate 32 climate scenarios from 16 downscaled global climate models for two representative concentration pathways (RCP4.5 and RCP8.5), assessing irrigated land retirement and well retirement policies. We show well retirement policies cost more per unit of groundwater saved than land retirement policies, as they offer less flexibility. Our findings also suggest that climate change could reduce regional groundwater use over time due to shifts in the relative profitability of crops. Rising summer temperatures lower corn yields, while elevated atmospheric carbon dioxide concentrations benefit winter wheat yields. In response, farmers transition to winter wheat—a less water‐intensive crop—leading to reduced groundwater extraction under the more severe climate scenario (RCP8.5). However, this shift reduces irrigation value and, consequently, the economic benefits of groundwater conservation. Our results highlight how differential crop responses to climate change and farmers' adaptations could undermine the benefits of groundwater conservation.