Double trouble: the importance of accounting for and defining water entitlements consistent with hydrological realities

Michael Young and James C. McColl

Australian Journal of Agricultural and Resource Economics, 2009, vol. 53, issue 01, 17

Abstract: When entitlements to access water in fully allocated river and aquifers are specified in a manner that is inconsistent with the ways that water arrives, flows across and flows through land, inefficient investment and water use is the result. Using Australia’s Murray Darling Basin as an example, this paper attempts to reveal the adverse economic and water management consequences of entitlement and water sharing regime misspecification in regimes that allow water trading. Markets trade water products as specified. When entitlements and the water sharing system are not designed in a way that has hydrological integrity, the market trades the water management regime into trouble. Options for specification of entitlement and allocation regimes in ways that have hydrological integrity are presented. It is reasoned, that if entitlement and allocation regime are set up in ways that have hydrological integrity, the result should be a regime that can autonomously adjust to climatic shifts, changes in prices and changes in technology without compromising environmental objectives.

Keywords: International Relations/Trade; Resource/Energy Economics and Policy (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (16)

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Journal Article: Double trouble: the importance of accounting for and defining water entitlements consistent with hydrological realities * (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aareaj:161907

DOI: 10.22004/ag.econ.161907

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