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

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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)

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.

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Item type Article
URI https://vuir.vu.edu.au/id/eprint/24683
DOI https://doi.org/10.1111/j.1475-4932.2010.00691.x
Official URL http://onlinelibrary.wiley.com/doi/10.1111/j.1475-...
Subjects Historical > FOR Classification > 0502 Environmental Science and Management
Historical > FOR Classification > 1403 Econometrics
Historical > Faculty/School/Research Centre/Department > College of Business
Current > Division/Research > Centre of Policy Studies (CoPS)
Keywords Southern Murray-Darling Basin, computable general equilibrium model, irrigation water, natural resource economics, water management
Citations in Scopus 58 - View on Scopus
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