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Saving the Southern Murray-Darling Basin: The Economic Effects of a Buyback of Irrigation Water

Dixon, Peter, Rimmer, Maureen T and Wittwer, Glyn (2011) Saving the Southern Murray-Darling Basin: The Economic Effects of a Buyback of Irrigation Water. Economic Record, 87 (276). pp. 153-168. ISSN 0013-0249 (print) 1475-4932 (online)

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Abstract

We use TERM-H2O in analysing the effects of the Government buying back water from irrigators in the Southern Murray-Darling Basin (SMDB) and thereby increasing river flows. TERM-H2O is a dynamic multiregional computable general equilibrium model containing water accounts. Controversially, our results suggest that buyback would increase economic activity in SMDB. Although a scheme of environmentally useful size would sharply increase the price of irrigation water, there would be little effect on aggregate SMDB farm output. Instead, farm resources would be reallocated between activities. Because farmers are owners of water rights, they would benefit from the price increase induced by buyback.

Item Type: Article
Uncontrolled Keywords: Southern Murray-Darling Basin, computable general equilibrium model, irrigation water, natural resource economics, water management
Subjects: FOR Classification > 0502 Environmental Science and Management
FOR Classification > 1403 Econometrics
Faculty/School/Research Centre/Department > College of Business
Faculty/School/Research Centre/Department > Centre of Policy Studies (CoPS)
Depositing User: Ms Julie Gardner
Date Deposited: 10 Apr 2014 01:51
Last Modified: 04 Oct 2015 23:54
URI: http://vuir.vu.edu.au/id/eprint/24683
DOI: https://doi.org/10.1111/j.1475-4932.2010.00691.x
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Citations in Scopus: 49 - View on Scopus

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