IDEAS home Printed from https://ideas.repec.org/p/ags/prodwp/31907.html
   My bibliography  Save this paper

Third-party effects of water trading and potential policy responses

Author

Listed:
  • Heaney, Anna
  • Dwyer, Gavan
  • Beare, Stephen
  • Peterson, Deborah C.
  • Pechey, Lili

Abstract

The joint conference paper, 'Third-party effects of water trading and potential policy responses' by Anna Heaney (ABARE), Gavan Dwyer (PC), Stephen Beare (ABARE), Deborah Peterson (PC) and Lili Pechey (ABARE), was presented to the American Agricultural Economics Association conference, Providence, Rhode Island, 25 - 27 July 2005. A key feature of water policy reform in Australia has been the separation of water access entitlements from land titles and the establishment of markets for water. However, the separation of water entitlements from land entitlement is not a sufficient condition to ensure that water markets are complete. In the absence of fully defined property rights, water markets will be incomplete and trade has the potential to create third-party effects. However, property rights over natural resources are seldom completely specified, because of the existence of transactions costs. The benefits from eliminating third-party effects need to be sufficient to warrant intervention. The objectives in this paper are to identify key potential third-party effects of water trade under existing property rights structures in Australia, and to examine policy responses to address these effects. The discussion draws on the concepts of exclusiveness and rivalry as key characteristics that determine the applicability of property rights solutions to third-party effects of trade. It is likely that many of the third-party effects of trade discussed in this paper do not warrant policy intervention at the national or state level. In some instances, effects are likely to be relatively minor, although some may be significant at the local level. The costs of addressing some third-party effects may outweigh the benefits. Where there are significant gains from trade, the existence of these third-party effects should not been seen as a reason to impede trade. There are first-best policy instruments to address these effects at an appropriate scale. *ABARE (Australian Bureau of Agricultural and Resource Economics); PC (Productivity Commission) **The views expressed in this paper do not necessarily reflect those of the Productivity Commission.

Suggested Citation

  • Heaney, Anna & Dwyer, Gavan & Beare, Stephen & Peterson, Deborah C. & Pechey, Lili, 2005. "Third-party effects of water trading and potential policy responses," Conference Workshop Proceedings 31907, Productivity Commission.
    • Handle: RePEc:ags:prodwp:31907
    DOI: 10.22004/ag.econ.31907
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/31907/files/cp06he01.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.31907?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Ellen Hanak, 2005. "Stopping the Drain: Third‐party Responses to California's Water Market," Contemporary Economic Policy, Western Economic Association International, vol. 23(1), pages 59-77, January.
    2. Peterson, Deborah C. & Dwyer, Gavan & Appels, David & Fry, Jane, 2004. "Modelling Water Trade in the Southern Murray-Darling Basin," Staff Working Papers 31925, Productivity Commission.
    3. Michael L. Katz & Carl Shapiro, 1994. "Systems Competition and Network Effects," Journal of Economic Perspectives, American Economic Association, vol. 8(2), pages 93-115, Spring.
    4. Beare, Stephen & Newby, Jonathan C., 2005. "Incomplete Markets, Excluded Goods and Natural Resource Management," 2005 Conference (49th), February 9-11, 2005, Coff's Harbour, Australia 137785, Australian Agricultural and Resource Economics Society.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Qureshi, M. Ejaz & Shi, Tian & Qureshi, Sumaira E. & Proctor, Wendy, 2009. "Removing barriers to facilitate efficient water markets in the Murray-Darling Basin of Australia," Agricultural Water Management, Elsevier, vol. 96(11), pages 1641-1651, November.
    2. 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.
    3. M. Ejaz Qureshi & Wendy Proctor & M. Kirby, 2000. "Economic Assessment of Water Trade Restrictions in the Murray Darling Basin," Regional and Urban Modeling 283600079, EcoMod.
    4. M Ejaz Qureshi & Tian Shi & Sumaira Qureshi & Wendy Proctor & Mac Kirby, 2009. "Removing Barriers to Facilitate Efficient Water Markets in the Murray Darling Basin – A Case Study from Australia," Socio-Economics and the Environment in Discussion (SEED) Working Paper Series 2009-02, CSIRO Sustainable Ecosystems.
    5. 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.
    6. John Freebairn, 2005. "Issues in the Design of Water Markets," Melbourne Institute Working Paper Series wp2005n18, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    7. Hang Zheng & Zhongjing Wang & Siyi Hu & Yongping Wei, 2012. "A Comparative Study of the Performance of Public Water Rights Allocation in China," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 26(5), pages 1107-1123, March.
    8. Heather Roper & Chris Sayers & Andrew Smith, 2006. "Stranded Irrigation Assets," Staff Working Papers 0605, Productivity Commission, Government of Australia.

    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. Heaney, Anna & Dwyer, Gavan & Beare, Stephen & Peterson, Deborah C. & Pechey, Lili, 2006. "Third-party effects of water trading and potential policy responses," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 50(3), pages 1-17, September.
    2. Anna Heaney & Gavan Dwyer & Stephen Beare & Deborah Peterson & Lili Pechey, 2006. "Third-party effects of water trading and potential policy responses ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 50(3), pages 277-293, September.
    3. Xuemeng Zhao & Weilun Huang, 2024. "Global Geopolitical Changes and New/Renewable Energy Game," Energies, MDPI, vol. 17(16), pages 1-27, August.
    4. Klein, Michael, 1996. "Competition in network industries," Policy Research Working Paper Series 1591, The World Bank.
    5. Kanis Saengchote & Voraprapa Nakavachara & Yishuang Xu, 2023. "Capitalising the Network Externalities of New Land Supply in the Metaverse," PIER Discussion Papers 203, Puey Ungphakorn Institute for Economic Research.
    6. Marta Gancarczyk, 2010. "Model schyłku i odrodzenia klastrów," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 3, pages 1-21.
    7. Mark T. Kanazawa, 2019. "Transaction Costs in Water Transfers: The issue of local control," Working Papers 2019-01, Carleton College, Department of Economics.
    8. Estelle Malavolti, 2016. "Single Till or Dual Till at airports: a Two-Sided Market Analysis," Post-Print hal-01406372, HAL.
    9. Honohan, Patrick & Vittas, Dimitri, 1996. "Bank regulation and the network paradigm : policy implications for developing and transition economies," Policy Research Working Paper Series 1631, The World Bank.
    10. Gual, Jordi, 2003. "Market Definition in the Telecoms Industry," CEPR Discussion Papers 3988, C.E.P.R. Discussion Papers.
    11. Dinar, Ariel, 2012. "Economy-wide implications of direct and indirect policy interventions in the water sector: lessons from recent work and future research needs," Policy Research Working Paper Series 6068, The World Bank.
    12. Kevin J. Boudreau & Andrei Hagiu, 2009. "Platform Rules: Multi-Sided Platforms as Regulators," Chapters, in: Annabelle Gawer (ed.), Platforms, Markets and Innovation, chapter 7, Edward Elgar Publishing.
    13. 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.
    14. Colombo, Massimo G. & Garrone, Paola, 1998. "Common carriers' entry into multimedia services," Information Economics and Policy, Elsevier, vol. 10(1), pages 77-105, March.
    15. Erzurumlu, S. Sinan, 2013. "The compatibility of durable goods with contingent generic consumables," Omega, Elsevier, vol. 41(3), pages 574-585.
    16. Fox, Stephen & Groesser, Stefan N., 2016. "Reframing the relevance of research to practice," European Management Journal, Elsevier, vol. 34(5), pages 457-465.
    17. Cecere, Grazia & Corrocher, Nicoletta & Battaglia, Riccardo David, 2015. "Innovation and competition in the smartphone industry: Is there a dominant design?," Telecommunications Policy, Elsevier, vol. 39(3), pages 162-175.
    18. Claire M. Weiller & Michael G. Pollitt, 2013. "Platform markets and energy services," Working Papers EPRG 1334, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    19. Slowak, André P., 2009. "Market fields structure & dynamics in industrial automation," FZID Discussion Papers 02-2009, University of Hohenheim, Center for Research on Innovation and Services (FZID).
    20. Kanis Saengchote & Voraprapa Nakavachara & Yishuang Xu, 2023. "Capitalising the Network Externalities of New Land Supply in the Metaverse," Papers 2303.17180, arXiv.org.

    More about this item

    Keywords

    Resource /Energy Economics and Policy;

    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:ags:prodwp:31907. 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: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/pcgovau.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.