Market-oriented solutions for groundwater commons through collective-action

Groundwater scarcity poses threats to communities across the globe, and effectively managing those challenges requires designing policy that achieves institutional fit. Collective action is well-suited to match rules with local context, and multiple pathways exist for communities to achieve reductions in groundwater use. To better understand how local conditions influence rule design, we examine two groundwater-reliant communities in the Western US that engaged in collective-action to arrive at distinct groundwater management rules. We consider: what drove stakeholders in Northwestern Kansas (NWKS) and San Luis Valley, Colorado (SLV) to adopt local groundwater policies, and why were different management pathways chosen? Further, why is more heterogeneity observed between local management organizations in SLV as compared to NWKS? To investigate these questions, we employ grounded theory to interpret the rules in reference to local hydro-agro-economic statistics and interviews with stakeholders (n = 19) in each region selected by expert sampling. We find that the additional goals of groundwater rules in SLV, partially driven by key contrasts in the resource system compared to NWKS, and higher resource productivity in SLV, creates both the need for and efficacy of a price-centered policy. Furthermore, variation in the resource systems and associated farm characteristics between subdistricts drives higher heterogeneity in rule design between local management districts in SLV compared to NWKS. More generally, we find the local flexibility afforded through the collective-action process as critical, even if it were to arrive at alternative, non-economic based incentives.


Introduction
Increasing water scarcity threatens communities, agriculture, and industry across the globe (Elliot et al 2014). Groundwater has historically been openaccess-but an increasing number of communities are attempting localized management plans to address collective overdraft (Edwards and Guilifos 2021). Given the broad menu of potential rules (e.g. well spacing, uniform cutbacks, pumping limits, pumping fees, etc) that can achieve the same water reductions, other factors besides water use should be considered in policy design. Communities are well positioned with the local knowledge required to align groundwater rules with context and achieve institutional fit (Folke et al 2007, Cudney-Bueno and Basurto 2009, Epstein et al 2015, and often outperform centralized, top-down rules (Marston et al 2022). To gain insights into bottom-up rule design, we examine two groundwater-reliant communities in the Western US that engaged in collectiveaction to arrive at distinct, incentive-based groundwater management rules. One of these communities, in northwestern Kansas, opted to place quantity limits on groundwater allocation; the other, in southcentral Colorado, enacted volumetric pumping fees.
Collective action is a viable alternative to state intervention or the division of the resource into private rights (Ostrom 1990(Ostrom , 2009) to avoid the (Boelens et al 2016, Smith 2022. Importantly, collective action is not orthogonal to market forces, and local groups may embrace incentive-based rules to address resource overuse. For instance, groundwater users in Colorado defined a goal of their collectiveaction efforts as to use 'economic-based incentives' as an alternative to 'state-imposed regulations' to promote responsible irrigation (RGWCD 2009).
Incentive-based rules are not prescriptive and allow flexibility in how irrigators adjust to adhere to the rules. This contrasts a command-and-control type approach that may set specific parameters such as planting rules or irrigation technology mandates. Fisheries, for instance, were once primarily regulated by seasonal closures or technological restrictions but have shifted toward individual tradable quotas (Costello et al 2008, Anderson andLibecap 2014), with lessons to be learned for water management (Leonard et al 2019). In the irrigation context, requiring or subsidizing more water-efficient application technology has been found to lead to a rebound effect where more water is used (Pfeiffer andLin 2014, Paul et al 2019). If the irrigator instead faces an additional cost of water use, they may choose to invest in the efficient technology, switch to a less water intensive crop, reduce its population or acreage, or all the above.
Both pricing the resource and setting a quantity ceiling creates a cost for the irrigator to use the water, and economic models conclude that the two approaches, when properly set, lead to equivalent reductions. In practice many elements-such as user behavior or resource characteristics-can influence which policy design is most effective in achieving the desired outcome. If it is too costly to obtain relevant information, regulators may set the policy tool at the wrong level; the potential social losses can be unequal for prices and quantity tools. For instance, theory suggests that when there are multiple and heterogeneous firms, setting a single price is less costly than setting quantities (Weitzman 1974).
Often quantity caps are more politically palatable because the pumping rights can be 'given' away whereas under a fee, users pay for every unit they do use. Still, a fee generates revenue, and how revenue flows is an important factor. Limits are also viewed as more equitable in that everyone is restricted and, when tradeable, receives something of value. With fees, those with deeper pockets may simply buy their way out of conservation. This opportunity to pay for water also means there is no hard limit and pumping may exceed hydrological goals. But removing this 'safety' valve under limits may put a severe burden on irrigators in drier years.
Given these distinctions, understanding how a community organizes to regulate a common-pool resource, and whether rules fit within the existing social and ecological environment, is paramount to managing the challenges of climate change. Following Ostrom's Social-Ecological Systems (SESs) framework, we ask: what drove stakeholders in Northwestern Kansas (NWKS) and San Luis Valley (SLV) to adopt local groundwater policies, and why were different management pathways chosen? Further, why is more heterogeneity of rules observed between local management organizations in SLV as compared to NWKS? To investigate these questions, we employ grounded theory (Glaser and Strauss 2017) to interpret the rules in reference to local hydro-agroeconomic statistics and interviews with stakeholders (n = 19) in each region selected by expert sampling (Etikan 2016).
We find that the additional goals of groundwater rules in SLV, partially driven by key contrasts in the resource system compared to NWKS, and higher resource productivity in SLV, creates both the need for and efficacy of a price-centered policy. Furthermore, variation in the resource systems and associated farm characteristics within SLV areas drives higher heterogeneity in rule design between local management districts in SLV. More generally, we find the local flexibility afforded through the collective-action process as critical, even if it were to arrive at alternative, non-economic based incentives.
Our research expands on Shalsi et al (2022), who interviewed local experts on groundwater rules in Australia to identify key factors-which they stress are contextual-that drive the rise and fall of collective action. The initial implementation of groundwater rules has been studied in NWKS and SLV, both for the factors explaining the collective action (Cody et al 2015, Perez-Quesada and Hendricks 2021, Loos et al 2022 and the subsequent effects of the rules (Golden 2018, Smith 2018, Deines et al 2019. We investigate why two areas that have successfully engaged in collective action arrived at distinct rules and provide empirical evidence on Weitzman's (1974) price vs. quantity discussion. In contrast to Ayres et al (2018), who compare whether collective-action occurred across groundwater basins in California using a large-N statistical approach, we more closely examine specific nuances of rules and situational factors by combining primary data with administrative and GIS data among basins engaged in collective-action. Our findings provide evidence that local stakeholders can produce policy consistent with economic theory and supports other stakeholders seeking to manage depleting groundwater resources with a guide of elements to consider as communities across the globe grapple with increasingly severe water stress.

Background on study areas
Our two study sites are shown in figure 1. In NWKS, the groundwater management district has been divided into two Local Enhanced Management Areas (LEMAs). We focus first on the Sheridan 6 LEMA, which implemented rules prior to the wider GMD4 LEMA. In SLV the management has been divided into six subdistricts. There we begin with the Closed Basin Subdistrict (also known as Subdistrict 1) as it too formed and propagated rules first. Both regions are subject to the prior appropriation system for groundwater use, where time of first use is meant to order well shutdowns in times of scarcity. The system was not strictly followed to limit groundwater use in either area, but the need for proper regulation intensified. Rather than following these extant state rules, each region successfully lobbied for legislation permitting local initiatives to provide an alternative rationing mechanism.

Sheridan-6
Groundwater Management District 4 (GMD4) manages ten counties in NWKS, all of which utilize the Ogallala Aquifer for agricultural production, a majority of which is corn. Local water management is separated by 6 × 6 square mile zones through the Public Land Survey System township system. Townships have different management priorities based on local hydrological factors; Sheridan County (SD-6) was the sixth area identified as a High-Priority Zones based on percent aquifer decline per acre-foot pumped. GMD4 managers approached all six High-Priority Zones, but only stakeholders in SD-6 organized to establish pumping limits initially (Perez-Quesada and Hendricks 2021).
In 2013, SD-6 self-imposed equal pumping restrictions across all producers regardless of priority. Pumping limits aim to extend aquifer life by 20 years through a 20% reduction in use across all users, designed as 55 inches over five years so that producers can bank or borrow water to use across all those years. Producers have been permitted to carryover water credits between 5 year periods. Users can trade with one another within SD-6, but there are few trades, and sometimes no money is involved. Irrigators can also 'umbrella' total pumping allowance across all their wells and redistribute individual well use.

Subdistrict 1
The Rio Grande Water Conservation District manages six subdistricts within SLV, which draw on both a confined and unconfined aquifer to grow a mix of Table 1. 2022 groundwater management rules in each submanagement area included in the study. Information on rules were obtained during interviews with general management. In NWKS the limits were confirmed on the GMD4 website (https://gmd4.org/LEMA. html), and in SLV fee amounts were confirmed via phone and email correspondence with program managers. potatoes, barley, and grass hays. Unlike NWKS, many producers in this region also utilize surface water, and many groundwater appropriations affect regional surface flows. As a result, the State of Colorado has been forced to 'call' surface allocation at an earlier priority to meet the downstream flow requirements of the 1939 Rio Grande Compact. In 1972 the state engineer placed a moratorium on new wells but did not place limits on existing wells-water managers expected the Closed Basin Project, designed to move water to the Rio Grande basin, to take care of the rest. However, the recovered amount fell well short of expectations. During severe drought in 2002, the State began to require well augmentation plans throughout the state to make whole the injured surface water right holders in order for wells to continue operation. Many well owners could not bear that heavy lift and were instead shut down. In SLV, the locals rallied and encouraged their state senator to introduce Senate Bill 04-222, providing the region an alternative, community-based way to protect senior water rights users and address declining aquifer levels. Subdistrict 1 was formed in 2006 to manage aquifer decline and associated new groundwater rules. Since the majority voted in favor of forming Subdistrict 1, the entire collective, rather than individual wells, shares the burden of making senior surface right holders whole. Subdistrict 1 adopted groundwater pumping fees in 2011, assessed by 'net' pumping. Many surface ditches within the boundaries of Subdistrict 1 obtained groundwater recharge as a recognized 'beneficial use' under the Prior Appropriation Doctrine, and users first put the surface water into 'flood ponds,' allowing it to filter into the aquifer. Irrigation then occurs through groundwater wells, and only extraction past their surface allocation is subject to the fee. The pumping fee was initially $45 per acre-foot ($45/AF) but has been raised multiple times; it is now to $150/AF and an additional increase to $500/AF is under serious discussion. Irrigators can purchase additional surface water credits from other irrigators that have spare rather than paying the subdistrict fee. These trades are arranged bilaterally and are currently selling for around $125/AF.
The revenue from the fee is utilized to pay forbearance agreements that allow flexibility for how the injured senior surface right holders can be compensated. Many demand wet water, but others accept alternatives, such as hay and, more commonly, cash. The revenue also subsidizes the Conservation Reserve Enhancement Program (CREP), which compensates irrigators to fallow some plots entirely.

Influence of SD-6 & Subdistrict 1
The SD-6 LEMA has been successful in curtailing use; pumping decreased by almost 30% between 2013 and 2020, and water level declines have significantly diminished, all while maintaining producer profit (Golden 2018, Deines et al 2019. Even though these reductions were realized under ideal weather and commodity-market conditions, success motivated both the renewal of pumping limits in SD-6 and the establishment of a district-wide LEMA in GMD4 in 2017. In table 1, we summarize the similarities and distinctions of the rules across the various sub-management areas. The pumping limits across the broader GMD4 LEMA are less restrictive and vary across townships depending on historic decline and location. Most areas continue to have 18inches per year, although a few townships are limited to 16 inches or even 14 inches per year. Unlike SD-6, carryover between 5 year periods is not systematic, and producers cannot umbrella wells or trade water with others through the GMD 3 . Pumping fees in Subdistrict 1 initially reduced water use by a third (Smith et al 2017), but most of the gains in aquifer storage were wiped out in a single drought year (2018) with diminished recharge and increased pumping. Still, the launch of Subdistrict 1 has been followed by the formation of five more subdistricts in SLV from 2016 to 2019. In contrast to Subdistrict 1, participation in the other subdistricts is strictly voluntary. Furthermore, there are currently no fallowing programs in the other subdistricts. Finally, the fees are based on gross pumping and are considerably lower 4 . Fees range from $15.13/AF in Subdistrict 4 to is $45/AF in Subdistrict 2. In addition to the fee in Subdistrict 5, this past year they implemented a mandatory 30% cut of historic use across all groundwater users in addition to the fee. Like the SD-6 LEMA, producers in Subdistrict 5 can 'umbrella' their total allocation in a system known in RGWCD as the 'Farm Unit Allocation.' In subdistrict 5, however, a producer's allocation can also be traded across Farm Units as well (see table 1).

Data and methods
In addition to gathering agricultural and environmental data and reviewing primary documents about the rules in place, we also draw on original interview data gathered during our on-site visits. We utilized expert sampling, a form of purposive sampling (Tongco 2007, Etikan 2016, Jones and White 2019, to select stakeholders with above-average knowledge and interest in local groundwater rules to develop an understanding of the rules, the collective action process, and how producers have been adapting to water scarcity in their region. We recognize this sample of informed experts may not be representative. In NWKS, we spoke with eight stakeholders in May 2022; this included six producers managing farms from 4000 to 40 000 acres, as well as a dairy farm operator and feedlot operator, and the current and former managers of GMD4. Our conversations with larger farms in NWKS included input from management teams. We spoke with 11 producers in SLV in June 2022; this included the management district General Manager, a cow and calf producer, and a rancher. Interviews were semi-structured so that questions were adapted and expanded upon during the interview process based on responses; our base interview questions are available in appendix B. The interviews are in service of a larger research agenda and cover more topics, and questions 1 through 3 are most germane for our efforts at hand. During the interviews, we took detailed field notes and used these to create transcripts for analysis. Conversations occurred at the local water management branch, on farms, at coffee shops, and over the phone, and lasted around one hour on average. In appendix C, we provide a general narrative of interview data, as well as tables (C1-C3) that maps the interview responses that support each of the statements made in the analysis that draw from the interview data.
We utilize grounded theory to interpret our data in a comparative manner. This is a widely used social science method that employs inductive reasoning to draw meaningful insights from qualitative data (Bryant 2019, Urquhart 2012, Araral 2013, Glaser and Strauss 2017. Our approach is appropriate given the goal to understand the collective action process and the perspectives of key stakeholders on the groundwater rules. The insights we draw are informed by Ostrom's (2009) framework of Social-Ecological Systems (SESs), Epstein's et al (2015) commentary on types of institutional fit within the SES, and Weitzman's (1974) analysis of price vs. quantity regulation. We pair our analysis of the interview data with natural resource and farm agriculture descriptive statistics, which provide important context to local social and ecological factors. We refer to the SES framework (Ostrom 2009) using parenthetical references to the map to variables in the SES.

Motivation for rules
While groundwater users in both regions are motivated by the desire to make their use more sustainable, there are also distinctions in each's motivation. This is despite having similar, although not identical, governance structures. They are both in states with the prior appropriation doctrine (GS4), a department of water resources, and local water management districts (GS1). A key departure is rooted in the distinct resource systems: In NWKS, the Ogallala aquifer is 'fossil' water with very little recharge (RU2), in part due to a lack of substantial surface water sources (RS2). The greater availability of surface water is seen in table 2. Most streams in NWKS are intermittent (75%) and SLV has three times the density of perennial streams as NWKS. In contrast, the unconfined aquifer in the SLV creates important surfacegroundwater connections (RU3), both reductions in surface flows due to pumping (RS7), but also inflows for greater recharge potential (RU2). The development of the surface water resources has also led to more heterogeneity in access to water in the SLV (RU7), with some using only surface water or only groundwater while others use both. Colorado must use all available administrative and legal powers to assure compliance with the Rio Grande Compact (S4), and the importance of this role was evident in our interviews. While stakeholders in SLV agree that aquifer decline, water shortage, and overconsumption (U3) make the rules necessary, it was clear that the credible threat of State intervention (S4) was essential to rule formation, as nine of the eleven raised this and one stated, 'the State has a stick; there is no carrot here.' By contrast, only one stakeholder in NWKS vaguely mentioned the importance of keeping 'the state off their back' and 'decisionmaking power local,' but all defined aquifer decline and overuse (U3) as the main motivators.
Finally, failing to create rules in SLV looks to be more costly simply because irrigation is nearly universal in crop production (U8). There, over 90% of harvested cropland is irrigated compared to just 16% in NWKS (see table 2). This is in part because, while both regions are 'arid' and receive a similar total amount of precipitation (500 mm) at the county level, NWKS receives a greater share during the growing season whereas Colorado receives more of it during the winter as snowpack in the surrounding mountains that is later used for irrigation during runoff (RU7). Within the actual cropped areas, annual precipitation is just 218 mm (see appendix A, table A1). Overall, 84% of cropland across NWKS remains dryland farming, and it remains a viable alternative there (U8); one stakeholder explained that 'eventually some pivots are not worth running and you move those areas back to dryland farming.'

Quantity vs. prices
We highlight four reasons why the price-centered management fits in SLV while quantity limits fit in NWKS. First and foremost, interviewees made it clear that the revenue is necessary in SLV to meet the statedetermined obligation to senior surface right holders (GS4). Four explicitly mentioned the groundwatersurface water connection and four others echoed that 'the rules take care of the state requirements for depletion and sustainability.' Although alternative modes of revenue generation were possible, the fee seemed equitable in that, while all are incentivized to use less (thereby reducing aggregate harm), those that cause more harm pay more (U6). In short, both the resource system and associated governance structure for water led to the fee. Stakeholders explained that managing these agreements is resource intensive; damage is calculated by the 'the Model' and the RGWCD General Manager (GM) complained that 'the requirement to avoid injury is at miniscule levels' on a given day, even if large across the year, and this makes it 'very tough to account for damages' (GS8).
Second, the CREP subsidy aims to reduce water consumption by supporting farmers to take land out of production, but also needs revenue generation to support it. All producers we spoke with in NWKS have a mixture of dry land and irrigated farming. In SLV where 90% of cropland is irrigated (see table 2), nearly the only way to stop water use is to take land out of production, and Subdistrict 1 chose to use the pumping fee to help make that possible. In fact, the RGWCD GM explained that in Subdistrict 1 initially 'developed a fee of $45/AF originally to fund CREP' only, but 'the judge said they needed a plan to remedy injuries to senior users' as well.
Third, farmers in SLV and NWKS operate on different profit margins (S5). Farm values in SLV counties are nearly twice as much per acre than in NWKS counties, largely due to the ability to produce nearly an order of magnitude higher valued crops per acre: $435 versus $63 (see table 2). Interviewees in NWKS expressed that a fee was 'not on the table due to cost' , and when told about the fee-based approach in SLV, three perceived that producers in the region could afford it as 'their farms are probably more profitable than ours' (RS5). A feedlot operator in SD6 said that he initially 'pitched an idea for a tax that would be redistributed back to users based on conservation amount' but ultimately, they 'decided it was overly complicated and some did not like idea of money changing hands.' The GMD4 Manager explained that the perceived equitability of the quantity limit was broadly preferred and 'better for small family farms.' Fourth, the decision pathways are consistent with Weitzman's (1974) observations of factors that influence which policy design leads to fewer social losses. Weitzman suggests that when there are more users (U1) and greater heterogeneity between users (U9), as is true in SLV, a price instrument is favored. Meanwhile, a quantity limit is favored when the costs of failed regulation are higher; as users NWKS utilize a finite fossil aquifer, the costs of failed regulation are likely more severe than SLV, where the aquifer is recharged by stream flow (RS7).
Finally, we also consider why SLV exhibits greater capacity for trading within the groundwater limits. In Subdistrict 1, the surface water credit provides a market mechanism to trade water and over 15 000 AF change hands each year (2012-2021) 5 . In contrast, the GMD4 manager explained that there are few trades in SD-6, but it is 'very informal' and there is 'no system to support water trading' in the broader GMD4 LEMA (GS5). Markets have real costs to set up and administer and the benefits are not necessarily large. Shown in figure 2, nearly two-thirds of irrigated acreage in NWKS is corn. Without large heterogeneity in benefits of water, gains to trade will be limited. Meanwhile, in SLV, there is more crop variation, meaning the benefits of water are not uniform to different growers. Additionally, given the underlying variation in surface water rights (GS4), both in volume and priority, alternative costs of water are also heterogeneous.

Heterogeneity in local rules
Despite the overarching similarities, the subsequent LEMAs and subdistricts did not simply adopt the same rules as the first movers. That said, in NWKS the rules are more similar in GMD4 to the SD-6 rules. SD-6 is well-suited to serve as a model; farmers in both areas rely on a mixture of groundwater irrigated and dry-land to rotate corn, wheat, and soy. Two interviewees emphasized that corn brings in the most profit and it represents nearly two-thirds of all irrigated acres (see figure 2). It is little surprise that, given the success of SD-6 (Drysdale and Hendricks 2018), its rules serve as a model for a broader district managing farms with similar attributes, users, and resource units. However, the quantity limits in GMD4 are not nearly as restrictive (GS5). The GMD4 manager identified coordination of 'when to use water and why' the key goal in the district-wide LEMA and identified SD-6 as 'a model' for GMD4-a view echoed by three other respondents.
In contrast, stakeholders in SLV outlined differences between users, farms, and hydrology between subdistricts and there was no explicit sentiment that Subdistrict 1 is a model for the other subdistricts. For example, both producers we spoke with in Subdistrict 2 expressed that their area is 'more community-minded' than Subdistrict 1, which 'is all about money,' and highlighted that they 'organized first and had paperwork together' before Subdistrict 1 did. The fact that most landed on a fee has less to do with Subdistrict 1 than that they too need to meet the financial obligations of the forbearance agreements (ECO3). Again, the crop mix is more variable across SLV, even within subdistricts (see figure A1 in appendix A), and water sources vary (confined and unconfined aquifers and surface water). Heterogeneity between subdistricts is illustrated by Subdistrict 1 and Subdistrict 5, which neighbor one another but have distinct characteristics and challenges.
The fee in Subdistrict 1-the largest subdistrictis currently $150/AF, while fees range from $15-45/AF in other subdistricts. It is the only subdistrict that supports water trading through the net pumping system, and the only subdistrict with a district-wide fallowing program to complement the federal CREP program. Subdistrict 1 thus needs the higher fee to fund the fallowing program-and users can afford it. Most potato farms in SLV are located in Subdistrict 1 (see figure A1 in appendix A), which is the highest value crop (RS5). The discussion to increase the fee to $500/AF accentuates the exceptionality of Subdistrict 1. It will move the management system away from a fee that entices reduced use to a de facto cap-andtrade market. The $500/AF price ceiling is prohibitive for most users and producers' 'permit' allocation will be their surface water right. Users will continue to trade water through the subdistrict, and three stakeholders perceive that 'water will trade lower than $500 on the free market,' but above the current $150 fee. Even though stakeholders expressed mixed support for this approach-one feels the plan 'removes flexibility for more adjustments'-it is only an option due to the unique hydrological and economic characteristics of Subdistrict 1.
As an act of desperation, Subdistrict 5 put forth a 30% reduction on top of the groundwater fee-all groundwater users were shut off by the State in April 2022. One stakeholder explained that the area faces unique challenges. First, the area is mostly ranchers and 'they want surface water, not forbearance agreements like the rest of the valley' (U8). Second, there is no surface water reservoir, so it is 'difficult to store water [during wet years] and there is no water to buy' (RS4/RS8). Third, the groundwater under land that has been put into federal conservation easements is inaccessible, which creates 'an extra hurdle to get water.' Producers restarted pumping in mid-June 2022, and they may continue to use the reduction to help recover aquifer depletions 6 . The fact that Subdistrict 5 has added a quantity-limit while Subdistrict 1 is discussing an even more market-centered management approach highlights the importance of SES context.

Conclusion
Collective-action to manage a commons under stress does not preclude the use of economic-incentives. The different pathways of NWKS and SLV, and the distinct choices made by subdistricts within SLV, underscores the importance of context-specific and bottom-up management. These local factors and variation in goals aside from lower groundwater use may help explain why portions of California are responding with fees in parts (Bruno and Jessoe 2021) and full-blown groundwater markets in others (Heard et al 2021). Continual assessment of what economic mechanism is appropriate, if any, as a response to overuse relative to supply is critical. Ostrom's SES framework provides a powerful model to conceptualize the factors that lead to successful management of a community resource; here it illuminates why rules vary between SLV and NWKS and why more heterogeneity is observed in SLV, and thereby provides context into Weitzman's commentary on price vs. quantity regulation. Specifically, we find that the additional goals of groundwater rules in SLV, partially driven by key contrasts in the resource system compared to NWKS, and higher resource productivity in SLV, creates both the need for and efficacy of a price-centered policy.
Furthermore, variation in the resource systems and associated farm characteristics between subdistricts drives higher heterogeneity in rule design between local management districts in SLV. Our analysis underscores that the SES framework can serve as a powerful guideline for state agencies and policymakers to understand why collective action outlasts top-down strategies that fail to recognize local context and engage the users of a resource system. The factors that we highlight in our analysis as essential to influencing policy-design are particularly relevant when considering other groundwater-reliant communities across the Western U.S. with similar governance structures and resource dynamics. Still, our findings-and the SES framework-is generalizable to communities across the globe that must choose between a broad menu of localized management options to address collective overdraft of a shared open-access resource.
Future research can focus on identifying triggerpoints that influence how communities choose policy design and whether the policy performs as expected. This can be accomplished by broadening research scope, for example comparing groundwater-reliant communities in different regulatory contexts such as Australia (Shalsi et al 2022) and the Western U.S., or by narrowing scope by comparing water-stressed communities in Colorado or Kansas that did not successfully self-organize to SLV or NWKS. Additionally, more research is needed to understand the potential resilience of groundwater governance in SLV and NWKS, and the role that price vs. quantity regulation plays in performance.

Data availability statement
All data that support the findings of this study are included within the article (and any supplementary files).

Acknowledgments
We thank the stakeholders for generously sharing their time and resources to educate us. This work was supported by the National Science Foundation

Appendix C. Interview response summary NWKS
Producers broadly defined aquifer decline and overuse as the main motivators for collective action, although one stakeholder in the broader GMD4 LEMA also mentioned a 'desire to keep Topeka [the state capital] out of it.' The district manager called the GMD4 LEMA a way to 'get people thinking about water use,' and identified SD-6 as a model for GMD4-a view echoed by two other producers in SD-6. Interviewees in both areas identified fairness and community success as main goals in creating groundwater rules-one producer in SD-6 mentioned that they 'did not want to break main street, [because] everything [in Hoxie] is somehow tied to irrigation.' In GMD4, however, it was less clear if producers were motivated to be 'fair' because there was genuine concern for neighbors' success, or because they would all be hurt by following prior appropriation; one producer explained that even producers with senior well rights would see other wells in their portfolio severely curtailed if GMD4 followed the prior appropriation system to cut groundwater use.
All producers across the LEMAs expressed that rules are mostly agreed upon and successfully meet goals, but interviewees identified different perceptions of success; one respondent defined success as 'conserving a lot.' Another attributed their success to the fact that the rules 'are simple and easy to understand.' Definitions of success varied more across the district-wide LEMA. The GMD manager identified coordination of 'when to use water and why' as the main goal and felt that the rules have been successful in that producers now think more critically about water use-but hopes that rules can be more restrictive in the future. One producer identified the additional goal to maximize economic benefit and is 'indifferent' to the rules and 'it just is what it is.' Another felt that 'no one is really complaining about the goals; they need these rules and they are not that restrictive.' He thought the rules have helped to 'prolong the aquifer life and shut down the gross abusers.' This producer added that 'the goal is to keep the state off our back,' and in this sense, the rules have also been effective.

San Luis Valley
Interviewees unanimously identified overconsumption and State intervention as the motivators for developing groundwater rules. While producers agreed that aquifer decline and water shortage make the rules necessary, many echoed the view of one producer who feels that 'the State has a stick; there is no carrot here.' In another's words, the State 'gave them an ultimatum: create an augmentation plan, join the subdistrict, or get shut off.' Altogether, respondents echoed the view of the Subdistrict 1 manager that regional hydrology and the prior appropriation system makes pumping limits necessary. Thus, the main goals of the rules were broadly identified as to meet the requirements set by the State, limit injury to surface water users, and maintain the basin to keep wells pumping. One producer in Subdistrict 4 defined this as sustainability; to him this means 'aquifer recovery, [limiting] injurious depletion, and meeting the [Rio Grande] compact.' Still, another producer in Subdistrict 6 emphasized that 'there is no sustainability clause' and they 'are all just trying to survive.' Interviewees expressed mixed views on whether rules are agreed upon. On one end, the two producers interviewed in Subdistrict 2 felt that the area is 'community-minded' and when they 'saw the writing on the wall,' they got together to 'chat about the rules and plans over some beers sitting on the back of their trucks.' They even 'had their paperwork together before Subdistrict 1.' On the other end, two respondents in Subdistrict 1 and one in Subdistrict 4 felt that SLV should simply follow the prior appropriation system as was done in the South Platte. This would require groundwater wells to get 'in line' for Rio Grande Compact (S4), and the importance of this role was evident in our interviews. While stakeholders in SLV agree that aquifer decline, water shortage, and overconsumption (U3) make the rules necessary, it was clear that the credible threat of State intervention (S4) was essential to rule formation.
SLV: A-K 2 By contrast, only one stakeholder in NWKS mentioned the influence of the State intervention and all defined aquifer decline and overuse (U3) as the main motivators.

KS: A-H; E 3
Overall, 84% of cropland across NWKS is dryland farming, indicating that it remains a profitable alternative there (U8).
KS: E 4 Stakeholders explained that managing these agreements are resource intensive; damage is calculated by the 'the Model' and injury payments are often miniscule on a given day even if large across the year (GS8).
SLV: C-F, J, K 5 First and foremost, interviewees made it clear that the revenue is necessary in SLV to meet the state-determined obligation to senior surface right holders (GS4).
SLV: A, D, F, K 6 Nearly the only way to stop water use is to take land out of production, and Subdistrict 1 chose to use the pumping fee to help make that possible.
SLV: E, K 7 Interviewees in NWKS expressed that a fee would not be financially possible, and a few perceived that producers in SLV could afford it as producers grow higher-value crops (RS5). A feedlot operator in SD6 said that he initially proposed a fee but it was clear that the perceived equitability of the quantity limit was broadly preferred.
KS: A-D, F 8 In contrast, the GMD4 manager explained that there are few trades in SD-6 and trading of pumping allocations in the greater GMD4 are not allowed (GS5).

KS: A, B 9
Interviewees emphasized that corn brings in the most profit and it represents over half of all irrigated acres (see figure 2).
KS: E, F 10 General Manager of GMD4 identified coordination of use as the key goal in the district-wide LEMA, and identified SD-6 as 'a model' for GMD4-a view echoed by producers in SD-6.

KS: A-C, F 11
In contrast, stakeholders in SLV outlined differences between users, farms, and hydrology between subdistricts and there was no explicit sentiment that Subdistrict 1 is a model for the other subdistricts. For example, producers in Subdistrict 2 expressed more unity and alignment and highlighted that they had enlisted support in subdistrict formation prior to Subdistrict 1. The fact that most landed on a fee has less to do with Subdistrict 1 than that they too need to meet the financial obligations of the forbearance agreements (ECO3).

12
The $500/AF price ceiling is prohibitive for most users and producers' 'permit' allocation will be their surface water right. Users will continue to trade water through the subdistrict, and stakeholders perceive that trade will occur somewhere between $150/AF and $500/AF. Even though stakeholders expressed mixed support for this approach, it is only an option due to the unique hydrological and economic characteristics of Subdistrict 1.

13
As an act of desperation, Subdistrict 5 put forth a 30% reduction on top of the groundwater fee-all groundwater users were shut off by the State in April 2022. Stakeholders explained that the area faces unique challenges. First, the area is mostly ranchers and 'they want surface water, not forbearance agreements like the rest of the valley' (U8). Second, there is no surface water reservoir to store water during wet years (RS4/RS8). Third, the groundwater for land that has been put into federal conservation easements is inaccessible, which creates 'an extra hurdle to get water' .
SLV: F, I water rights, and besides the net pumping rule in Subdistrict 1, this would typically result in wells being out of priority and unable to pump. Others felt that while there was contention before, producers generally agree on the rules now; one respondent in Subdistrict 1 explained that he and his father had opposing views at first but now agree on the need to conserve. The RGWCD Manager expressed that the district is just aiming to 'keep people in business,' and felt that this is now recognized by most producers who first opposed subdistrict formation. Finally, the producer we interviewed in Subdistrict 3 stressed that it 'does not matter' if users agree because 'the groundwater rules are forced.' He also clarified that 30 users, including him, own '87% of most senior ditches and 220 own the other 13%. These 13% complain the most' about the rules. Two producers in Subdistrict 1 felt that the subdistrict is selling water that they do not own and forcing a low market price for water. They perceived that, under a $500/AF pumping fee, there Respondent is against the jump to $500. He feels the new plan 'removes flexibility for more adjustments by writing in triggers or conditional changes' and would prefer to make changes as the new conditions emerge.
Respondent C-subd4 Respondent D-subd3 Respondent E-subd1 discussing CREP, respondent said: 'I do believe we need to retire water.' 'Water will trade lower than $500 on the free market.' Respondent 'will sell water for a reasonable price' if he can; 'Subd1 is at $150 now' and he will 'sell water for $125 or something.'

Respondent F-subd5
See Column 13: subdistrict 5 reduction and unique challenges 'Our challenge is different as there is no reservoir to store water during a good year. It is also hard to find water to replace, so last year we could not farm and they can only farm 1 /2 of this year..we have failed to get water to replace depletions. It is mostly ranchers up here and they feel differently than farmers, they want SW not forbearance agreements like the rest of the valley. It is also difficult to store water in 5 and there is no water to buy. A lot of guys have put land into conservation easements but you cannot use the groundwater there, so it is an extra hurdle to get water.' (Continued.) 'the judge said they needed a plan to remedy injuries to senior users' as well.
Explained that he only grows alfalfa and that it is hard to grow potatoes outside of subdistrict 1 'At $150 they did not need to trade as much as they will under the $500/AF' will be more robust negotiations and agreements will be met to sell water at the true market rate, probably above $150 and below $500 and few producers will pay for groundwater not accounted for by a surface recharge credit. However, another producer in Subdistrict 1 was against the proposed plan to jump to $500/AF because it removes flexibility in the future for more adjustments by writing in 'triggers' or conditional changes. Finally, all respondents were skeptical of the RGDSS Groundwater Model ('the Model'), or wanted improved accuracy, and were unhappy with the role it plays in the rules. The RGWCD Manager wanted more flexibility at the state level within the rules based on the Model, which predicts monthly injury. The forbearance agreements can be tedious and administratively costly as the subdistrict is often required to pay trivial amounts to meet the standards, which is based on the Model; this is a resourceintensive process. Views of success vary by subdistrict. In Subdistrict 1, all stakeholders perceived that the rules do not currently meet goals, but that they had appeared effective prior to the recent drought. The increase to $500/AF is part of a new plan to meet goals. The producers in 2, 3, and 6, which are close in proximity and connected by surface water infrastructure, felt that goals are being met because rules have improved the situation; one said that they have 'learned how to more efficiently use groundwater.' A producer in Subdistrict 2 attributed success to the fact that they are half the size of Subdistrict 1, so it is 'easier to organize and educate folks.' The interviewee from Subdistrict 6 explained they have not 'had a challenge with recharge' but rather managing injury, and the 'sustainability requirement is not too confining' in their area. The producer in Subdistrict 3 expressed that 'they are achieving the rules because they have to; the fees cause you to shut off wells' sooner. This sentiment was echoed in Subdistrict 4 and 5; at the time of interview Subdistrict 5 was not allowed to pump groundwater because they were not meeting the objectives. One producer felt that they would eventually meet the rules: 'We have to. That's why we are not pumping now.'