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Managing Saline Groundwater Impacts from Irrigation - Designing and Testing Emissions Trading in Coleambally Irrigation Area


  • Stuart Whitten
  • Shahbaz Khan
  • D Collins
  • D Robinson
  • John Ward

    () (CSIRO Sustainable Ecosystems, Australia)


Irrigated agriculture often leads to recharge to local and regional groundwater systems greater than what the systems can absorb, resulting in the development of shallow watertables causing salinity and waterlogging. Policy based on emissions trading offers one option for effective management of existing recharge externalities if effective property rights to diffuse emissions can be defined. In this paper we combine the conclusions drawn from biophysical research with economic principles underpinning emissions trading to present such a system. Allocation of net recharge contracts to irrigation farms will internalize the costs associated with saline aquifer impacts. Irrigators may reduce their compliance costs by creating or purchasing credits that reduce recharge through perennial vegetation, engineering solutions or crop rotation options. We discuss the economic impacts of adopting such a policy in the Coleambally Irrigation Area in southwestern New South Wales, Australia. We also demonstrate some of the conclusions drawn from our research using experimental economics.

Suggested Citation

  • Stuart Whitten & Shahbaz Khan & D Collins & D Robinson & John Ward, 2007. "Managing Saline Groundwater Impacts from Irrigation - Designing and Testing Emissions Trading in Coleambally Irrigation Area," Socio-Economics and the Environment in Discussion (SEED) Working Paper Series 2007-07, CSIRO Sustainable Ecosystems.
  • Handle: RePEc:cse:wpaper:2007-07

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    salinity; irrigation; recharge; tradeable emissions; cap and trade; hydrologic-economic modelling; experimental economics;

    JEL classification:

    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics

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