IDEAS home Printed from https://ideas.repec.org/a/bla/ajarec/v51y2007i3p283-303.html
   My bibliography  Save this article

Economic assessment of acquiring water for environmental flows in the Murray Basin

Author

Listed:
  • M. Ejaz Qureshi
  • Jeff Connor
  • Mac Kirby
  • Mohammed Mainuddin

Abstract

This article is an economic analysis of reallocating River Murray Basin water from agriculture to the environment with and without the possibility of interregional water trade. Acquiring environmental flows as an equal percentage of water allocations from all irrigation regions in the Basin is estimated to reduce returns to irrigation. When the same volume of water is taken from selected low-value regions only, the net revenue reduction is less. In all scenarios considered, net revenue gains from freeing trade are estimated to outweigh the negative revenue effects of reallocating water for environmental flows. The model accounts for how stochastic weather affects market water demand, supply and requirements for environmental flows. Net irrigation revenue is estimated to be 75 million less than the baseline level for a scenario involving reallocating a constant volume of water for the environment in both wet and dry years. For a more realistic scenario involving more water for the environment in wet and less in dry years, estimated net revenue loss is reduced by 48 per cent to 39 million. Finally, the external salinity-related costs of water trading are estimated at around 1 million per annum, a quite modest amount compared to the direct irrigation benefits of trade. Copyright 2007 The Authors Journal compilation 2007 Australian Agricultural and Resource Economics Society Inc. and Blackwell Publishing Ltd .

Suggested Citation

  • M. Ejaz Qureshi & Jeff Connor & Mac Kirby & Mohammed Mainuddin, 2007. "Economic assessment of acquiring water for environmental flows in the Murray Basin ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 51(3), pages 283-303, September.
  • Handle: RePEc:bla:ajarec:v:51:y:2007:i:3:p:283-303
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1111/j.1467-8489.2007.00383.x
    File Function: link to full text
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Rosegrant, M. W. & Ringler, C. & McKinney, D. C. & Cai, X. & Keller, A. & Donoso, G., 2000. "Integrated economic-hydrologic water modeling at the basin scale: the Maipo river basin," Agricultural Economics, Blackwell, vol. 24(1), pages 33-46, December.
    2. Quiggin, John C., 1991. "Salinity Mitigation in the Murray River System," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 59(01), pages 1-13, April.
    3. Appels, David & Douglas, Robert A. & Dwyer, Gavan, 2004. "Responsiveness of Demand for Irrigation Water: A Focus on the Southern Murray-Darling Basin," Staff Working Papers 31924, Productivity Commission.
    4. Donna Brennan, 2006. "Water policy reform in Australia: lessons from the Victorian seasonal water market ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 50(3), pages 403-423, September.
    5. Jayasuriya, Rohan T., 2004. "Modelling the regional and farm-level economic impacts of environmental flows for regulated rivers in NSW, Australia," Agricultural Water Management, Elsevier, vol. 66(1), pages 77-91, April.
    6. Mike Young, 2002. "A preliminary Assessment of the economic and social implications of Environmental Flow Scenarios for the Murray River System," Natural Resource Management Economics 02_009, Policy and Economic Research Unit, CSIRO Land and Water, Adelaide, Australia.
    7. Brennan, Donna C., 2006. "Water policy reform in Australia: lessons from the Victorian seasonal water market," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 50(3), pages 1-21, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sarah Wheeler & Henning Bjornlund & Martin Shanahan & Alec Zuo, 2008. "Price elasticity of water allocations demand in the Goulburn-Murray Irrigation District ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 52(1), pages 37-55, March.
    2. Griffith, Marnie & Codner, Gary & Weinmann, Erwin & Schreider, Sergei, 2009. "Modelling hydroclimatic uncertainty and short-run irrigator decision making: the Goulburn system," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 53(4), pages 1-20.
    3. Gavan Dwyer & Robert Douglas & Deb Peterson & Jo Chong & Kate Maddern, 2006. "Irrigation externalities: pricing and charges," Staff Working Papers 0603, Productivity Commission, Government of Australia.
    4. Robert Brooks & Edwyna Harris & Yovina Joymungul, 2013. "Price clustering in Australian water markets," Applied Economics, Taylor & Francis Journals, vol. 45(6), pages 677-685, February.
    5. Changhai Qin & Shan Jiang & Yong Zhao & Yongnan Zhu & Qingming Wang & Lizhen Wang & Junlin Qu & Ming Wang, 2022. "Research on Water Rights Trading and Pricing Model between Agriculture and Energy Development in Ningxia, China," Sustainability, MDPI, vol. 14(23), pages 1-15, November.
    6. Sarah Ann Wheeler, 2022. "Debunking Murray‐Darling Basin water trade myths," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 66(4), pages 797-821, October.
    7. Wheeler, Sarah Ann & Zuo, Alec & Bjornlund, Henning, 2014. "Investigating the delayed on-farm consequences of selling water entitlements in the Murray-Darling Basin," Agricultural Water Management, Elsevier, vol. 145(C), pages 72-82.
    8. Craig D. Broadbent & David S. Brookshire & Don Coursey & Vince Tidwell, 2017. "Futures Contracts in Water Leasing: An Experimental Analysis Using Basin Characteristics of the Rio Grande, NM," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 68(3), pages 569-594, November.
    9. Loch, Adam & Bjornlund, Henning & Wheeler, Sarah & Connor, Jeff, 2012. "Allocation trade in Australia: a qualitative understanding or irrigator motives and behaviour," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 56(1), pages 1-19, March.
    10. Raffensperger, John F., 2011. "Matching users' rights to available groundwater," Ecological Economics, Elsevier, vol. 70(6), pages 1041-1050, April.
    11. Huong Dinh & Manannan Donoghoe & Neal Hughes & Tim Goesch, 2019. "A micro-simulation model of irrigation farms in the southern Murray-Darling Basin," Papers 1903.05781, arXiv.org.
    12. Robert Brooks & Edwyna Harris & Yovina Joymungul, 2009. "Market depth in an illiquid market: applying the VNET concept to Victorian water markets," Applied Economics Letters, Taylor & Francis Journals, vol. 16(13), pages 1361-1364.
    13. Guilfoos, Todd & Garnache, Cloe & Suter, Jordan F. & Merrill, Nathaniel H., 2017. "Efficiency Gains Arising from Dynamic Groundwater Markets," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258438, Agricultural and Applied Economics Association.
    14. David Adamson & Adam Loch, 2018. "Achieving environmental flows where buyback is constrained," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 62(1), pages 83-102, January.
    15. Donna Brennan, 2008. "Missing markets for storage and the potential economic cost of expanding the spatial scope of water trade," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 52(4), pages 471-485, December.
    16. Neal Hughes & Manannan Donoghoe & Linden Whittle, 2020. "Farm Level Effects of On‐Farm Irrigation Infrastructure Programs in the Southern Murray–Darling Basin," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 53(4), pages 494-516, December.
    17. Ansink, Erik & Houba, Harold, 2012. "Market power in water markets," Journal of Environmental Economics and Management, Elsevier, vol. 64(2), pages 237-252.
    18. Guangyao Wang & Xinyue Zhang & Lijuan Du & Bo Lei & Zhenghe Xu, 2023. "Study on the Optimal Allocation of Water Resources Based on the Perspective of Water Rights Trading," Sustainability, MDPI, vol. 15(23), pages 1-19, November.
    19. Chi Truong, 2012. "An Analysis of Storage Capacity Reallocation Impacts on the Irrigation Sector," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 51(1), pages 141-159, January.
    20. Brennan, Donna C., 2006. "Water policy reform in Australia: lessons from the Victorian seasonal water market," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 50(3), pages 1-21, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:ajarec:v:51:y:2007:i:3:p:283-303. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/aaresea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.