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Water Markets and Scarcity: Australia’s Murray Darling Basin and the US Southwest

Author

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  • Grafton, R. Quentin
  • Landry, Clay
  • Libecap, Gary D.
  • O’Brien, R.J. (Bob)

Abstract

Australia’s Murray-Darling Basin and south western United States share: (1) climate variability resulting in the need for large water storage investment; (2) the need for internal and cross-border (state) water management; (3) an historical over-allocation of water to irrigators; and (4) increasing competition between agricultural and urban demand and in situ environmental and recreational uses. The ability of water markets in these two regions to mitigate water scarcity is compared in this report. The evaluation suggests that on-going water market reform, along with processes to account for the public interest, can promote equity, environmental sustainability and economic efficiency.

Suggested Citation

  • Grafton, R. Quentin & Landry, Clay & Libecap, Gary D. & O’Brien, R.J. (Bob), 2009. "Water Markets and Scarcity: Australia’s Murray Darling Basin and the US Southwest," Research Reports 94943, Australian National University, Environmental Economics Research Hub.
    • Handle: RePEc:ags:eerhrr:94943
    DOI: 10.22004/ag.econ.94943
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    References listed on IDEAS

    as
    1. Unknown, 2006. "Rural Water Use and the Environment: The Role of Market Mechanisms," Commissioned Studies 8020, Productivity Commission.
    2. R. Quentin Grafton & Michael B. Ward, 2008. "Prices versus Rationing: Marshallian Surplus and Mandatory Water Restrictions," The Economic Record, The Economic Society of Australia, vol. 84(s1), pages 57-65, September.
    3. Productivity Commission, 2006. "Rural Water Use and the Environment: The Role of Market Mechanisms," Research Reports, Productivity Commission, Government of Australia, number 21.
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    7. Jedidiah Brewer & Robert Glennon & Alan Ker & Gary D. Libecap, 2007. "Water Markets in the West: Prices, Trading, and Contractual Forms," NBER Working Papers 13002, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Nadine Wittmann, 2014. "A Microeconomic Perspective on Water Resources Management: Analyzing the Effects on Optimal Land Rents Along a River Basin," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 28(5), pages 1309-1325, March.
    2. He, Lixia & Horbulyk, Theodore M. & Ali, Md. Kamar & Le Roy, Danny G. & Klein, K.K., 2012. "Proportional water sharing vs. seniority-based allocation in the Bow River basin of Southern Alberta," Agricultural Water Management, Elsevier, vol. 104(C), pages 21-31.
    3. Wittmann Nadine, 2013. "A microeconomic analysis of the socio-economic situation along the Kat River Water Basin: Comment," Agrekon, Taylor & Francis Journals, vol. 52(2), pages 128-135, June.

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