The 2011 Basin Plan, Climate Change and the Buy-Back
AbstractThe long-term success of the Basin Plan and the Buy-Back will be judged by the capacity of the allocated public funding to deliver water to the environment, potable water supplies for the community and water for irrigation. Water property rights in the Murray-Darling Basin can be divided into four distinct groups (ground water, high security, general security and supplementary) reflecting their inherent capacity to deliver water supplies in response to climatic conditions in a given year. The price paid for these entitlements reflects their ability to provide water under known climate variability. The optimal portfolio of water entitlements needs to encapsulate this information in order to determine which entitlements to purchase, the number needed and their location in the river system in order to deliver net social benefits. The optimal portfolio of entitlements is further complicated by the climate transitioning from a known mean and variance to a new mean and variance. The spatial impact of climate change on water resources is not uniform. Hence what is seen as a good portfolio now may in fact be sub-optimal in the future. The aim of this paper is to illustrate the benefits of a state contingent framework for describing the optimal portfolio of water entitlements under a changing climate. By explicitly determining the real value of water entitlements in normal, drought and wet states of nature, we can determine the Buy-Back’s ability to achieve the Basin Plan’s goals and suggest an optimal entitlement mix to deliver long-term economic, social and environmental benefits under climate change.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University of Queensland, School of Economics in its series Risk and Sustainable Management Group Working Papers with number 149884.
Date of creation: 2012
Date of revision:
Water; Property Rights; Climate Variability; Climate Change; The Basin Plan and Buy-Back; Environmental Economics and Policy; Resource /Energy Economics and Policy; Q25;
Find related papers by JEL classification:
- Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- C. J. O'Donnell & W. E. Griffiths, 2006.
"Estimating State-Contingent Production Frontiers,"
American Journal of Agricultural Economics,
Agricultural and Applied Economics Association, vol. 88(1), pages 249-266.
- Chris O'Donnell & W.E. Griffiths, 2004. "Estimating State-Contingent Production Frontiers," CEPA Working Papers Series WP022004, School of Economics, University of Queensland, Australia.
- C.J. O'Donnell & W.E. Griffiths, 2004. "Estimating State-Contingent Production Frontiers," Department of Economics - Working Papers Series 911, The University of Melbourne.
- Adamson, David & Oss-Emer, Max & Quiggin, John, 2011. "Property Rights and Water Buy Back in Australia's Murray-Darling Basin," Risk and Sustainable Management Group Working Papers 149883, University of Queensland, School of Economics.
- David Adamson & Thilak Mallawaarachchi & John Quiggin, 2007. "Water use and salinity in the Murray-Darling Basin: A state-contingent model ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 51(3), pages 263-281, 09.
- Robert Chambers & John Quiggin, 2007. "Information value and efficiency measurement for risk-averse firms," Journal of Productivity Analysis, Springer, vol. 27(3), pages 197-208, June.
- Johnston, Christopher R. & Vance, George F. & Ganjegunte, Girisha K., 2008. "Irrigation with coalbed natural gas co-produced water," Agricultural Water Management, Elsevier, vol. 95(11), pages 1243-1252, November.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search).
If references are entirely missing, you can add them using this form.