IDEAS home Printed from
   My bibliography  Save this book

Rural Water Use and the Environment: The Role of Market Mechanisms


  • Productivity Commission


The Productivity Commission released its final research report into ‘Rural Water Use and the Environment: The Role of Market Mechanisms’ in August 2006. The report indicates that there is scope for markets to play a greater role in improving the efficient use of water, including for environmental purposes. The Commission suggests that governments should give greater recognition to the integrated nature of water resources and use markets to more efficiently allocate water among competing users. Water for environmental purposes can be obtained cost effectively through purchasing a range of water products from willing sellers on the open market, including, but not limited to, water entitlements. This can often be more cost effective than investing in new infrastructure works: Markets can also be used to achieve other environmental goals, such as managing salinity, but need to be targeted to location and scale — no ’one size’ fits all. Unless accounted for, climate change, farm dams, vegetation and land-use change, groundwater extractions or changes in irrigation management have the potential to undermine efforts to achieve environmental goals and affect the reliability of existing entitlements. Governments should press ahead with the National Water Initiative, especially refining and clarifying property rights, undertaking further research on water systems and improving water accounting.

Suggested Citation

  • Productivity Commission, 2006. "Rural Water Use and the Environment: The Role of Market Mechanisms," Research Reports, Productivity Commission, Government of Australia, number 21.
  • Handle: RePEc:ris:prodcs:21
    Note: 369 pages

    Download full text from publisher

    File URL:
    Download Restriction: no

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Mike Young & Jim McColl, 2003. "Robust Reform: Implementing robust institutional arrangements to achieve efficient water use in Australia," Natural Resource Management Economics 03_003, Policy and Economic Research Unit, CSIRO Land and Water, Adelaide, Australia.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. R. Quentin Grafton & Tom Kompas, 2007. "Pricing Sydney water ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 51(3), pages 227-241, September.
    2. Agbola, Frank W. & Evans, Nigel, 2012. "Modelling rice and cotton acreage response in the Murray Darling Basin in Australia," Agricultural Systems, Elsevier, vol. 107(C), pages 74-82.

    More about this item


    Agriculture; Drinking water; Environment; Environmental impact; Environmental management; Environmental policy; Environmental protection; Farming; Irrigation; Natural resources; Regulations; Rivers; Renewable resources; Sustainable development; Water; Water conservation; Water management; Water supply;

    JEL classification:

    • Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics
    • R0 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General


    Access and download statistics


    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:ris:prodcs:21. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (MAPS). General contact details of provider: .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.