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Climate change, uncertainty and adaptation: the case of irrigated agriculture in the Murray-Darling Basin in Australia

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  • Quiggin, John
  • Adamson, David
  • Chambers, Sarah
  • Schrobback, Peggy

Abstract

Climate change is likely to have substantial effects on irrigated agriculture. Extreme climate events such as droughts are likely to become more common. These patterns are evident in median projections of climate change for the Murray–Darling Basin in Australia. Understanding climate change effects on returns from irrigation involves explicit representation of spatial changes in natural stocks (i.e. water supply) and their temporal variability (i.e. frequency of drought states of nature) and the active management responses to capital stocks represented by mitigation and alternative adaptation strategies by state of nature . A change in the frequency of drought will induce a change in the allocation of land and water between productive activities. In this paper, a simulation model of state-contingent production is used to analyze the effects of climate change adaptation and mitigation. In the absence of mitigation, climate change will have severe adverse effects on irrigated agriculture in the Basin. However, a combination of climate mitigation and adaptation through changes in land and water use will allow the maintenance of agricultural water use and environmental flows.

Suggested Citation

  • Quiggin, John & Adamson, David & Chambers, Sarah & Schrobback, Peggy, 2010. "Climate change, uncertainty and adaptation: the case of irrigated agriculture in the Murray-Darling Basin in Australia," Risk and Sustainable Management Group Working Papers 152096, University of Queensland, School of Economics.
  • Handle: RePEc:ags:uqsers:152096
    DOI: 10.22004/ag.econ.152096
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    Cited by:

    1. Robert G. Chambers & Atakelty Hailu & John Quiggin, 2011. "Event‐specific data envelopment models and efficiency analysis," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 55(1), pages 90-106, January.
    2. K. Shuvo Bakar & Huidong Jin, 2018. "Spatio-temporal quantitative links between climatic extremes and population flows: a case study in the Murray-Darling Basin, Australia," Climatic Change, Springer, vol. 148(1), pages 139-153, May.
    3. Sarah Ann Wheeler & Ying Xu & Alec Zuo, 2020. "Modelling the climate, water and socio-economic drivers of farmer exit in the Murray-Darling Basin," Climatic Change, Springer, vol. 158(3), pages 551-574, February.
    4. Adamson, David & Loch, Adam, 2014. "Possible negative feedbacks from ‘gold-plating’ irrigation infrastructure," Agricultural Water Management, Elsevier, vol. 145(C), pages 134-144.
    5. Hjort, Ingrid, 2016. "Potential Climate Risks in Financial Markets: A Literature Overview," Memorandum 01/2016, Oslo University, Department of Economics.
    6. John Quiggin, 2010. "Agriculture and global climate stabilization: a public good analysis," Agricultural Economics, International Association of Agricultural Economists, vol. 41(s1), pages 121-132, November.
    7. Adamson, David & Loch, Adam, 2013. "Natural capital and climate change: Possible negative sustainability impacts from 'gold plating' irrigation infrastructure," Risk and Sustainable Management Group Working Papers 156480, University of Queensland, School of Economics.
    8. Connor, Jeffery D. & Schwabe, Kurt & King, Darran & Knapp, Keith, 2012. "Irrigated agriculture and climate change: The influence of water supply variability and salinity on adaptation," Ecological Economics, Elsevier, vol. 77(C), pages 149-157.
    9. Sarah Ayeri Ogalleh & Christian R. Vogl & Josef Eitzinger & Michael Hauser, 2012. "Local Perceptions and Responses to Climate Change and Variability: The Case of Laikipia District, Kenya," Sustainability, MDPI, Open Access Journal, vol. 4(12), pages 1-24, December.
    10. Zuo, Alec & Qiu, Feng & Wheeler, Sarah Ann, 2019. "Examining volatility dynamics, spillovers and government water recovery in Murray-Darling Basin water markets," Resource and Energy Economics, Elsevier, vol. 58(C).
    11. Islam, Nazrul & Xayavong, Vilaphonh & Anderton, Lucy & Feldman, David, 2014. "Farm productivity in an Australian region affected by a changing climate," 2014 Conference (58th), February 4-7, 2014, Port Macquarie, Australia 165842, Australian Agricultural and Resource Economics Society.
    12. Islam, Nazrul & Xayavong, Vilaphonh & Kingwell, Ross, 2014. "Broadacre farm productivity and profitability in south-western Australia," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 58(2), April.
    13. Elwin G. Smith & Mark E. Eiswerth & Terrence S. Veeman, 2010. "Current and Emerging Water Issues in Agriculture: An Overview," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 58(s1), pages 403-409, December.
    14. Wheeler, Sarah Ann & Zuo, Alec & Loch, Adam, 2015. "Watering the farm: Comparing organic and conventional irrigation water use in the Murray–Darling Basin, Australia," Ecological Economics, Elsevier, vol. 112(C), pages 78-85.
    15. Loch, Adam & Adamson, David & Mallawaarachchi, Thilak, 2013. "Hydrology and Economics in Water Management Policy under Increasing uncertainty," Risk and Sustainable Management Group Working Papers 156479, University of Queensland, School of Economics.
    16. Claire Settre & Jeff Connor & Sarah Ann Wheeler, 2017. "Reviewing the Treatment of Uncertainty in Hydro-economic Modeling of the Murray–Darling Basin, Australia," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 3(03), pages 1-35, July.
    17. Daghagh Yazd, Sahar & Wheeler, Sarah Ann & Zuo, Alec, 2020. "Understanding the impacts of water scarcity and socio-economic demographics on farmer mental health in the Murray-Darling Basin," Ecological Economics, Elsevier, vol. 169(C).
    18. Truong, Chi & Trück, Stefan, 2016. "It’s not now or never: Implications of investment timing and risk aversion on climate adaptation to extreme events," European Journal of Operational Research, Elsevier, vol. 253(3), pages 856-868.
    19. Islam, Nazrul & Xayavong, Vilaphonh & Kingwell, Ross S., 2011. "Broadacre Farm Productivity And Profitability In South Western Australia," 2011 Conference (55th), February 8-11, 2011, Melbourne, Australia 100565, Australian Agricultural and Resource Economics Society.
    20. Alfonso Expósito, 2019. "Valuing Households’ Willingness to Pay for Water Transfers from the Irrigation Sector: A Case Study of the City of Seville (Southern Spain)," Sustainability, MDPI, Open Access Journal, vol. 11(24), pages 1-18, December.
    21. Cortignani, Raffaele & Dell’Unto, Davide & Dono, Gabriele, 2018. "Recovering the costs of irrigation water with different pricing methods: Insights from a Mediterranean case study," Agricultural Water Management, Elsevier, vol. 199(C), pages 148-156.
    22. Allyson Williams & Neil White & Shahbaz Mushtaq & Geoff Cockfield & Brendan Power & Louis Kouadio, 2015. "Quantifying the response of cotton production in eastern Australia to climate change," Climatic Change, Springer, vol. 129(1), pages 183-196, March.
    23. Adam Loch & David Adamson, 2015. "Drought and the rebound effect: a Murray–Darling Basin example," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 79(3), pages 1429-1449, December.

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    More about this item

    Keywords

    Environmental Economics and Policy; Resource /Energy Economics and Policy; Risk and Uncertainty;
    All these keywords.

    JEL classification:

    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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