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Estimating Impacts of Climate Change on Lower Murray Irrigation, Australia

Author

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  • Connor, Jeffery D.
  • Kirby, Mac
  • Schwabe, Kurt A.
  • Lukasiewicz, Anna
  • Kaczan, David

Abstract

This 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.

Suggested Citation

  • Connor, Jeffery D. & Kirby, Mac & Schwabe, Kurt A. & Lukasiewicz, Anna & Kaczan, David, 2008. "Estimating Impacts of Climate Change on Lower Murray Irrigation, Australia," 2008 Conference (52nd), February 5-8, 2008, Canberra, Australia 5974, Australian Agricultural and Resource Economics Society.
  • Handle: RePEc:ags:aare08:5974
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    File URL: http://purl.umn.edu/5974
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    References listed on IDEAS

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    1. Krinsky, Itzhak & Robb, A Leslie, 1986. "On Approximating the Statistical Properties of Elasticities," The Review of Economics and Statistics, MIT Press, vol. 68(4), pages 715-719, November.
    2. Stephen K. Swallow & Michael P. McGonagle, 2006. "Public Funding of Environmental Amenities: Contingent Choices Using New Taxes or Existing Revenues for Coastal Land Conservation," Land Economics, University of Wisconsin Press, vol. 82(1), pages 56-67.
    3. John Bergstrom & Kevin Boyle & Mitsuyasu Yabe, 2004. "Trading Taxes vs. Paying Taxes to Value and Finance Public Environmental Goods," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 28(4), pages 533-549, August.
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    Keywords

    Environmental Economics and Policy; Land Economics/Use;

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