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Economic effects of climate change in the Murray–Darling Basin, Australia

Author

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  • Jiang, Qiang
  • Grafton, R. Quentin

Abstract

This study uses a hydro-economic model to examine the role of water trading, and the economic impacts of climate change and reduced surface water availability in the Murray–Darling Basin. The results show that losses to irrigated agriculture under a median climate change scenario are modest, but under a ‘modified 2030 dry extreme scenario’ there would be substantial reductions in water use, irrigated land use and profits. Nevertheless, the Basin-wide proportional economic impacts would be less than the percentage decline in water use. A comparison of model results with and without inter-regional water trade shows that inter-regional water trade in periods of much reduced water availability mitigates the on-farm impacts of climate change. Given that agricultural production in the Basin is likely to be affected by climate change, the development of drought-tolerant crops and cultivars along with learning and extension of best farming practices to reduced water use could also assist irrigated agriculture adapt to climate change within the Basin.

Suggested Citation

  • Jiang, Qiang & Grafton, R. Quentin, 2012. "Economic effects of climate change in the Murray–Darling Basin, Australia," Agricultural Systems, Elsevier, vol. 110(C), pages 10-16.
  • Handle: RePEc:eee:agisys:v:110:y:2012:i:c:p:10-16
    DOI: 10.1016/j.agsy.2012.03.009
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    References listed on IDEAS

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    1. David Adamson & Thilak Mallawaarachchi & John Quiggin, 2009. "Declining inflows and more frequent droughts in the Murray-Darling Basin: climate change, impacts and adaptation ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 53(3), pages 345-366, July.
    2. Ejaz Qureshi, Muhammad & Ranjan, Ram & Ejaz Qureshi, Sumaira, 2010. "An empirical assessment of the value of irrigation water: the case study of Murrumbidgee catchment," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(1), March.
    3. -, 2009. "Climate change: selected economic dimensions," Sede Subregional de la CEPAL para el Caribe (Estudios e Investigaciones) 27645, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    4. Grafton, Rupert & Jiang, Qiang, 2011. "Economic effects of water recovery on irrigated agriculture in the Murray-Darling Basin," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 55(4), December.
    5. Jeff Connor & Kurt Schwabe & Darran King & David Kaczan & Mac Kirby, 2009. "Impacts of climate change on lower Murray irrigation ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 53(3), pages 437-456, July.
    6. -, 2009. "The economics of climate change," Sede Subregional de la CEPAL para el Caribe (Estudios e Investigaciones) 38679, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    7. Muhammad Ejaz Qureshi & Ram Ranjan & Sumaira Ejaz Qureshi, 2010. "An empirical assessment of the value of irrigation water: the case study of Murrumbidgee catchment ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(1), pages 99-118, January.
    8. Hanjra, Munir A. & Qureshi, M. Ejaz, 2010. "Global water crisis and future food security in an era of climate change," Food Policy, Elsevier, vol. 35(5), pages 365-377, October.
    9. Oecd, 2009. "Climate Change and Africa," OECD Journal: General Papers, OECD Publishing, vol. 2009(1), pages 5-35.
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    Citations

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    Cited by:

    1. Gohar, Abdelaziz A. & Cashman, Adrian, 2016. "A methodology to assess the impact of climate variability and change on water resources, food security and economic welfare," Agricultural Systems, Elsevier, vol. 147(C), pages 51-64.
    2. 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.
    3. Kirby, Mac & Bark, Rosalind & Connor, Jeff & Qureshi, M. Ejaz & Keyworth, Scott, 2014. "Sustainable irrigation: How did irrigated agriculture in Australia's Murray–Darling Basin adapt in the Millennium Drought?," Agricultural Water Management, Elsevier, vol. 145(C), pages 154-162.
    4. repec:wsi:wepxxx:v:03:y:2017:i:03:n:s2382624x16500429 is not listed on IDEAS
    5. repec:wsi:wepxxx:v:04:y:2018:i:01:n:s2382624x15500204 is not listed on IDEAS
    6. Bauman, Allison & Goemans, Christopher & Pritchett, James & Thilmany McFadden, Dawn, 2015. "Modeling Imperfectly Competitive Water Markets in the Western U.S," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 201448, Agricultural and Applied Economics Association;Western Agricultural Economics Association.

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