IDEAS home Printed from
MyIDEAS: Login to save this paper or follow this series

Establishing and managing the environmental water reserve – the interaction between different government policies

  • Horne, Avril
  • Freebairn, John W.
  • O'Donnell, Erin

Policy to protect river ecosystems has changed rapidly in Australia and the mechanisms to both establish and manage environmental water are still evolving. Policy has moved from providing a fixed environmental target (albeit varying between years) to one in which the environment can actively participate in the market, with the possibility of better fulfilling variable water requirements. However, the inherent nature of the Sustainable Diversion Limit (SDL), established under the Water Act 2007, is that it represents a fixed allocation to the environment. This paper considers the interaction the new SDL for the Murray Darling Basin and potential issues arising from the interaction with the government buyback initiative. While both the SDL and buyback have been discussed extensively, the interaction between the two policies has received little debate. Pairing these two policy initiatives will have implications for the flexibility of an environmental water reserve (EWR) and the ability for ongoing trade between the environment and consumptive water users. Our position is that the SDL, or preferably rules based water, should reflect an absolute minimum limit on environmental water requirements, while the buyback should provide the EWR with tradable water rights with the flexibility to respond to shifts in the environmental water demand curve by providing environmental water over and above the SDL. If both a buyback and minimum flow rules are in place, the SDL will provide little additional benefits but increase administrative costs and reduce flexibility. This has significant implications for the way the SDL and buyback strategy are structured.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

Paper provided by Australian Agricultural and Resource Economics Society in its series 2011 Conference (55th), February 8-11, 2011, Melbourne, Australia with number 100561.

in new window

Date of creation: 2011
Date of revision:
Handle: RePEc:ags:aare11:100561
Contact details of provider: Postal: AARES Central Office Manager, Crawford School of Public Policy, ANU, Canberra ACT 0200
Phone: 0409 032 338
Web page:

More information through EDIRC

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:ags:aare11:100561. 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: (AgEcon Search)

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.