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Modelling Water Trade in the Southern Murray-Darling Basin

Author

Listed:
  • D. Peterson

    (Productivity Commission)

  • G. Dwyer

    (Productivity Commission)

  • D. Appels

    (Productivity Commission)

  • J. Fry

    (Productivity Commission)

Abstract

Released in November 2004, the paper uses TERM-Water, a bottoms-up regional CGE model of the Australian economy, to examine the regional effects of expanding trade of irrigation water in the southern Murray- Darling Basin. The study finds that water trading dampens the impact of water allocation cuts on gross regional product (GRP). The benefits of introducing trading within irrigation districts are greater than the further benefits of expanding trade to between these regions. Permitting trade of seasonal allocations allows irrigators to reallocate water in reaction to climatic conditions and water availability - and it is this flexibility that enables GRP reductions to be minimised.

Suggested Citation

  • D. Peterson & G. Dwyer & D. Appels & J. Fry, 2005. "Modelling Water Trade in the Southern Murray-Darling Basin," Urban/Regional 0506007, EconWPA.
  • Handle: RePEc:wpa:wuwpur:0506007
    Note: Type of Document - pdf; pages: 95
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    Keywords

    southern murray-darling basin; CGE model; irrigation water; water allocation; water trade;

    JEL classification:

    • R - Urban, Rural, Regional, Real Estate, and Transportation Economics

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