Impacts of Reduced Water Availability on Lower Murray Irrigation, Australia
AbstractThis article evaluates irrigated agriculture sector response and resultant economic impacts of climate change for a part of the Murray Darling Basin in Australia. A water balance model is used to predict reduced basin inflows for mild, moderate and severe climate change scenarios involving 10, 20, 40 Celcius warming, and predict 13%, 38% and 63% reduced inflows. Impact on irrigated agricultural production and profitability are estimated with a mathematical programming model using a two-stage approach that simultaneously estimates short and long-run adjustments. The model accounts for a range of adaptive responses including: deficit irrigation, temporarily fallowing some areas, and permanently reducing irrigated area and changing the mix of crops. The results suggest that relatively low cost adaptation strategies are available for moderate reduction in water availability and thus costs of such reduction are likely to be relatively small. In more severe climate change scenarios greater costs are estimated, adaptations predicted include a reduction in total area irrigated, investments in efficient irrigation, and a shift away from perennial to annual crops as the latter can be managed more profitably when water allocations in some years are very low.
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Bibliographic InfoPaper provided by CSIRO Sustainable Ecosystems in its series Socio-Economics and the Environment in Discussion (SEED) Working Paper Series with number 2008-02.
Length: 31 pages
Date of creation: Feb 2008
Date of revision:
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water availability; irrigation; Murray Darling Basin; climate change;
Find related papers by JEL classification:
- Q1 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture
- Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
This paper has been announced in the following NEP Reports:
- NEP-AGR-2008-03-25 (Agricultural Economics)
- NEP-ALL-2008-03-25 (All new papers)
- NEP-ENV-2008-03-25 (Environmental Economics)
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