Economic assessment of acquiring water for environmental flows in the Murray Basin

Muhammad Qureshi (), Jeffery D. Connor, Mac Kirby and Mohammed Mainuddin

Australian Journal of Agricultural and Resource Economics, 2007, vol. 51, issue 3, 21

Abstract: This article is an economic analysis of reallocating River Murray Basin water from agriculture to the environment with and without the possibility of interregional water trade. Acquiring environmental flows as an equal percentage of water allocations from all irrigation regions in the Basin is estimated to reduce returns to irrigation. When the same volume of water is taken from selected low-value regions only, the net revenue reduction is less. In all scenarios considered, net revenue gains from freeing trade are estimated to outweigh the negative revenue effects of reallocating water for environmental flows. The model accounts for how stochastic weather affects market water demand, supply and requirements for environmental flows. Net irrigation revenue is estimated to be $75 million less than the baseline level for a scenario involving reallocating a constant volume of water for the environment in both wet and dry years. For a more realistic scenario involving more water for the environment in wet and less in dry years, estimated net revenue loss is reduced by 48 per cent to $39 million. Finally, the external salinity-related costs of water trading are estimated at around $1 million per annum, a quite modest amount compared to the direct irrigation benefits of trade.

Keywords: Resource/Energy; Economics; and; Policy (search for similar items in EconPapers)
Date: 2007
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
https://ageconsearch.umn.edu/record/118333/files/j.1467-8489.2007.00383.x.pdf (application/pdf)

Related works:
Journal Article: Economic assessment of acquiring water for environmental flows in the Murray Basin * (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:aareaj:118333

DOI: 10.22004/ag.econ.118333

Access Statistics for this article

More articles in Australian Journal of Agricultural and Resource Economics from Australian Agricultural and Resource Economics Society Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().