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Experiments with regulations & markets linking upstream tree plantations with downstream water users

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  • Nordblom, Thomas L.
  • Reeson, Andrew
  • Finlayson, John D.
  • Hume, Iain H.
  • Whitten, Stuart M.
  • Kelly, Jason A.

Abstract

Land-use change in upper catchments impact downstream water flows. As trees use large amounts of water the expansion of upstream plantations can substantially reduce water availability to downstream users. There can also be impacts on downstream salinity due to reduced dilution flows. In some jurisdictions afforestation requires the purchase of water rights from downstream holders, while in others it does not, effectively handing the water rights to the upstream landholders. We consider the economic efficiency and equity (profitability and distributional) consequences of upstream land use change in the presence of a water market under alternate property rights regimes and different salinity scenarios.

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Bibliographic Info

Paper provided by Australian Agricultural and Resource Economics Society in its series 2009 Conference (53rd), February 11-13, 2009, Cairns, Australia with number 47945.

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Date of creation: 2009
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Handle: RePEc:ags:aare09:47945

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Keywords: experimental-economics; tree-plantations; environmental-services; urban; irrigation; stock & domestic; water use; land use;

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  1. Amos Tversky & Daniel Kahneman, 1979. "Prospect Theory: An Analysis of Decision under Risk," Levine's Working Paper Archive 7656, David K. Levine.
  2. Gintis, Herbert, 2000. "Beyond Homo economicus: evidence from experimental economics," Ecological Economics, Elsevier, vol. 35(3), pages 311-322, December.
  3. Thaler, Richard, 1980. "Toward a positive theory of consumer choice," Journal of Economic Behavior & Organization, Elsevier, vol. 1(1), pages 39-60, March.
  4. Knetsch, Jack L & Sinden, J A, 1984. "Willingness to Pay and Compensation Demanded: Experimental Evidence of an Unexpected Disparity in Measures of Value," The Quarterly Journal of Economics, MIT Press, vol. 99(3), pages 507-21, August.
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