Arkansas Groundwater Conservation Tax Credit: Arkansas Department of Agriculture Recognizes 40 Years of Conservation Incentives – JD Supra

Report on the Arkansas Groundwater Conservation Tax Credit Program and its Alignment with Sustainable Development Goals

Introduction: A Four-Decade Commitment to Sustainable Water Management

The Arkansas Department of Agriculture (ADA) has marked the 40th anniversary of the Arkansas Groundwater Conservation Tax Credit (AGCTC) program. This initiative provides state income tax credits to landowners for projects that reduce groundwater consumption. The program is a critical state-level mechanism for advancing several United Nations Sustainable Development Goals (SDGs), primarily SDG 6 (Clean Water and Sanitation), by promoting the adoption of surface water alternatives and enhancing irrigation efficiency. Its long-term goal is the protection of vital aquifers and the improvement of overall water use efficiency, directly contributing to sustainable resource management.

Direct Contributions to SDG 6: Clean Water and Sanitation

The AGCTC program is fundamentally aligned with SDG 6, which aims to ensure the availability and sustainable management of water and sanitation for all. By incentivizing a reduction in groundwater extraction, the program directly addresses Target 6.4: to substantially increase water-use efficiency across all sectors and ensure sustainable withdrawals and supply of freshwater to address water scarcity. The focus on converting to surface water sources and installing water meters supports integrated water resources management, a key component of Target 6.5.

Supporting SDG 2 (Zero Hunger) and SDG 12 (Responsible Consumption and Production)

By encouraging more efficient irrigation practices and the conservation of a finite natural resource, the program underpins sustainable agriculture, which is essential for achieving SDG 2 (Zero Hunger). The financial incentives for land leveling and reservoir construction enable agricultural producers to maintain productivity while reducing their environmental footprint. This aligns with SDG 12 (Responsible Consumption and Production) by promoting production patterns that are based on the efficient use of natural resources, particularly water.

Program Incentives for Sustainable Practices

The AGCTC program offers landowners tangible financial credits for implementing specific water conservation projects. These incentives are structured to encourage significant investment in sustainable infrastructure and technology.

• Reservoirs

  1. A 50% tax credit is available for the project cost of constructing, installing, or restoring an impoundment of at least 20 acre-feet.
  2. The maximum claim is $18,000 per taxable year.

• Land Levelling

  1. A 25% tax credit is offered for the cost of a land leveling project to improve irrigation efficiency.
  2. The maximum claim is $18,000 per taxable year.

• Conversion to Surface Water

  1. Inside a designated critical groundwater area, a 50% tax credit is available for costs incurred converting from groundwater to surface water use.
  2. Outside a critical groundwater area, the credit is 25% of the project cost.
  3. The maximum claim for either scenario is $18,000 per taxable year.

• Water Meters

  1. A 50% tax credit is available for the cost of water meters installed on wells within a critical groundwater area.
  2. A 25% tax credit is available for meters installed outside a critical groundwater area.

Program Impact and Advancement of SDG 17: Partnerships for the Goals

Since its inception, the AGCTC program has successfully stimulated over $40 million in private investment by landowners into groundwater conservation projects. This demonstrates a significant, long-term commitment to sustainable water management within the state. Furthermore, the ADA’s collaboration with organizations such as Ducks Unlimited and the Rice Stewardship Program exemplifies SDG 17 (Partnerships for the Goals). This multi-stakeholder partnership enhances the program’s reach and impact, leveraging combined expertise and resources to promote shared conservation objectives, as highlighted in a commemorative video released by the partners.

Analysis of Sustainable Development Goals (SDGs) in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

1. SDG 6: Clean Water and Sanitation: This is the primary SDG addressed. The article focuses entirely on the Arkansas Groundwater Conservation Tax Credit program, which aims to reduce groundwater use, promote surface water alternatives, and improve water use efficiency to protect diminishing aquifers.
2. SDG 2: Zero Hunger: The context of the program is agricultural, as indicated by the “Arkansas Department of Agriculture,” “landowners,” “irrigation practices,” and partnership with the “Rice Stewardship Program.” Sustainable water management is fundamental to sustainable agriculture and food security.
3. SDG 12: Responsible Consumption and Production: The program directly promotes the sustainable management and efficient use of a critical natural resource—groundwater—which aligns with the principles of responsible consumption and production.
4. SDG 15: Life on Land: The protection of aquifers, which are underground freshwater ecosystems, is crucial for maintaining the health of terrestrial ecosystems that depend on them. The program’s goal to “protect aquifers” contributes to the conservation of inland freshwater ecosystems.

2. What specific targets under those SDGs can be identified based on the article’s content?

• SDG 6: Clean Water and Sanitation
  • Target 6.4: By 2030, substantially increase water-use efficiency across all sectors and ensure sustainable withdrawals and supply of freshwater to address water scarcity. The article directly addresses this target by describing a program that incentivizes “more efficient irrigation practices” and projects that “reduce groundwater use” to protect “diminishing groundwater supplies.”
  • Target 6.5: By 2030, implement integrated water resources management at all levels. The Arkansas Groundwater Conservation Tax Credit program is a state-level policy instrument that manages water resources by integrating economic incentives (tax credits) with conservation goals for both groundwater and surface water, which is a practical application of integrated water resources management.
  • Target 6.6: By 2020, protect and restore water-related ecosystems, including… aquifers. The article explicitly states that the program is “intended to protect aquifers,” directly aligning with the goal of protecting these vital water-related ecosystems.
• SDG 2: Zero Hunger
  • Target 2.4: By 2030, ensure sustainable food production systems and implement resilient agricultural practices… that help maintain ecosystems. The program encourages resilient agricultural practices such as “land levelling” and “more efficient irrigation,” which help maintain the aquifer ecosystem by reducing water stress, thereby supporting sustainable food production.
• SDG 12: Responsible Consumption and Production
  • Target 12.2: By 2030, achieve the sustainable management and efficient use of natural resources. The entire premise of the AGCTC program is to foster the sustainable management and efficient use of groundwater, a key natural resource, by incentivizing conservation and shifting to surface water alternatives.
• SDG 15: Life on Land
  • Target 15.1: By 2020, ensure the conservation, restoration and sustainable use of… inland freshwater ecosystems and their services. The program’s focus on protecting aquifers contributes directly to the conservation and sustainable use of these critical inland freshwater ecosystems.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

The article provides several quantitative and qualitative indicators that can be used to measure progress:

• Financial Investment in Conservation: The article explicitly states that “landowners have invested more than $40 million in groundwater conservation projects.” This monetary value serves as a direct indicator of the resources mobilized for water conservation efforts (relevant to Targets 6.4 and 12.2).
• Number and Type of Implemented Projects: Progress can be measured by tracking the number of specific projects for which landowners claim tax credits. The article implies this by listing the eligible projects:
  • Construction or restoration of reservoirs.
  • Land leveling projects.
  • Projects converting from groundwater to surface water use.
  • Installation of water meters.
• Adoption of Efficient Technologies and Practices: The number of water meters installed and the adoption of “more efficient irrigation practices” are implied indicators of increased water-use efficiency (relevant to Target 6.4).
• Policy Implementation as an Indicator: The existence and 40-year anniversary of the “Arkansas Groundwater Conservation Tax Credit” program itself is an indicator of the state’s long-term commitment to and implementation of integrated water resources management policies (relevant to Target 6.5).

Summary Table of SDGs, Targets, and Indicators

Source: jdsupra.com