Irrigation externalities: pricing and charges
The Productivity Commission Staff Working Paper ‘Irrigation externalities: pricing and charges. by Gavan Dwyer, Robert Douglas, Deb Peterson, Jo Chong and Kate Maddern was released on 14 March 2006. The paper discusses the nature and causes of environmental change related to rural water use, and provides a taxonomy of the many diverse types. It also examines the issues surrounding possible charges on water use for water related externalities. There have been few attempts by water utilities to incorporate externalities into full cost pricing of irrigation water. The aim of this Staff Working Paper was to: examine the extent to which charges imposed by irrigation water utilities could address externalities from irrigation water supply and use; and to develop a framework to identify and characterise changes in environmental conditions from the supply and use of irrigation water that may lead to environmental externalities. The authors found that many factors influence the extent to which charging for water would change water use. These include the volume of water available to irrigators, the extent to which trade can occur, the size of the charge or tax, the price responsiveness for irrigation water and the existing mechanisms to address externalities. A tax on water use may increase economic efficiency where external costs are related only to the level of water use. However, such a tax is an unsuitable instrument if the Government’s policy objective is to reduce environmental damage to a predetermined level or to raise a target level of revenue to address the externalities. The views expressed in this paper are those of the staff involved and do not necessarily reflect those of the Productivity Commission.
|Date of creation:||Mar 2006|
|Date of revision:|
|Publication status:||Published by the Productivity Commission, Australia.|
|Contact details of provider:|| Postal: Level 28, 35 Collins St, Melbourne Victoria 3000|
Phone: 61 3 9653 2100
Fax: 61 3 9653 2199
Web page: http://www.pc.gov.au/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bjornlund, Henning, 2003. "Farmer participation in markets for temporary and permanent water in southeastern Australia," Agricultural Water Management, Elsevier, vol. 63(1), pages 57-76, November.
- Martin L. Weitzman, 1974.
"Prices vs. Quantities,"
Review of Economic Studies,
Oxford University Press, vol. 41(4), pages 477-491.
- 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.
- D. Peterson & G. Dwyer & D. Appels & J. Fry, 2005. "Modelling Water Trade in the Southern Murray-Darling Basin," Urban/Regional 0506007, EconWPA.
- Stavins, Robert, 2001.
"Experience with Market-Based Environmental Policy Instruments,"
dp-01-58, Resources For the Future.
- Stavins, Robert N., 2003. "Experience with market-based environmental policy instruments," Handbook of Environmental Economics, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 1, chapter 9, pages 355-435 Elsevier.
- Stavins, Robert, 2000. "Experience with Market-Based Environmental Policy Instruments," Working Paper Series rwp00-004, Harvard University, John F. Kennedy School of Government.
- Anonymous, 2006. "Rural Water Use and the Environment: The Role of Market Mechanisms," Commissioned Studies 8020, Productivity Commission.
- Stefan Hajkowicz (Ed) & Mike Young (Ed), 2002. "Value of Returns to Land and Water and Costs of Degradation Vol 1 of 2," Natural Resource Management Economics 02_002, Policy and Economic Research Unit, CSIRO Land and Water, Adelaide, Australia.
- R. H. Coase, 2013. "The Problem of Social Cost," Journal of Law and Economics, University of Chicago Press, vol. 56(4), pages 837 - 877.
- D. Appels & R. Douglas & G. Dwyer, 2005.
"Responsiveness of Demand for Irrigation Water: A Focus on the Southern Murray-Darling Basin,"
- Appels, David & Douglas, Robert A. & Dwyer, Gavan, 2004. "Responsiveness of Demand for Irrigation Water: A Focus on the Southern Murray-Darling Basin," Staff Working Papers 31924, Productivity Commission.
- Bazin, D. & Ballet, J. & Touahri, D., 2004.
"Environmental responsibility versus taxation,"
Elsevier, vol. 49(2), pages 129-134, June.
- Ribaudo, Marc & Horan, Richard D. & Smith, Mark E., 1999. "Economics of Water Quality Protection from Nonpoint Sources: Theory and Practice," Agricultural Economics Reports 33913, United States Department of Agriculture, Economic Research Service.
- Adar, Zvi & Griffin, James M., 1976. "Uncertainty and the choice of pollution control instruments," Journal of Environmental Economics and Management, Elsevier, vol. 3(3), pages 178-188, October.
- Don Fullerton & Gilbert Metcalf, 1997.
"Environmental Controls, Scarcity Rents, and Pre-Existing Distortions,"
NBER Working Papers
6091, National Bureau of Economic Research, Inc.
- Fullerton, Don & Metcalf, Gilbert E., 2001. "Environmental controls, scarcity rents, and pre-existing distortions," Journal of Public Economics, Elsevier, vol. 80(2), pages 249-267, May.
- Don Fullerton & Gilbert E. Metcalf, 1997. "Environmental Controls, Scarcity Rents, and Pre-Existing Distortions," Discussion Papers Series, Department of Economics, Tufts University 9703, Department of Economics, Tufts University.
- Aretino, Barbara & Holland, Paula & Matysek, Anna & Peterson, Deborah C., 2001. "Cost Sharing for Biodiversity Conservation: A Conceptual Framework," Staff Research Papers 31915, Productivity Commission.
- Mike Young, 2000. "Draft Guidelines for Managing Externalities: Restoring the balance," Natural Resource Management Economics 00_005, Policy and Economic Research Unit, CSIRO Land and Water, Adelaide, Australia.
- Mike Young, 2002. "A preliminary Assessment of the economic and social implications of Environmental Flow Scenarios for the Murray River System," Natural Resource Management Economics 02_009, Policy and Economic Research Unit, CSIRO Land and Water, Adelaide, Australia.
When requesting a correction, please mention this item's handle: RePEc:ris:prodsw:0603. 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: (MAPS)
If references are entirely missing, you can add them using this form.