An integrated water trading-allocation model, applied to a water market in Australia

A.M. Zaman, H.M. Malano and B. Davidson

Agricultural Water Management, 2009, vol. 96, issue 1, 149-159

Abstract: Temporary water trading is an established and growing phenomenon in the Australian irrigation sector. However, decision support and planning tools that incorporate economic and biophysical factors associated with temporary water trading are lacking. In this paper the integration of an economic trading model with a hydrologic water allocation model is discussed. The integrated model is used to estimate the impacts of temporary water trading and physical water transfers. The model can incorporate economic and biophysical drivers of water trading. The economic model incorporates the key trade drivers of commodity prices, seasonal water allocations and irrigation deliveries. The hydrologic model is based on the Resource Allocation Model (REALM) framework, which facilitates hydrologic network simulation modelling. It incorporates water delivery system properties and operating rules for the main irrigation and urban centres in a study area. The proposed integration method has been applied to a case study area in northern Victoria, Australia. Simulations were conducted for wet and dry spells, a range of commodity prices and different irrigation distribution system configurations. Some example analyses of scenarios incorporating water trading were undertaken. From these analyses potential bottlenecks to trade that constrain the economic benefits from temporary water trading were identified. Furthermore, it was found that in certain areas of the system, trading can make impacts of long drought spells worse for water users, e.g. irrigators. Thus, the integrated model can be used to quantify short-term and long-term third party impacts arising from temporary water trading. These findings also highlight the need to link "paper trades" (estimated by economic models) to physical water transfers (estimated by biophysical models).

Keywords: 1842; Hydrology:; Irrigation; 1880; Hydrology:; Water; management; (6334); 6344; Policy; Sciences:; System; operation; and; management; Irrigation; Water; transfer; Systems; modelling; Goulburn-Broken; Catchment (search for similar items in EconPapers)
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0378-3774(08)00181-9
Full text for ScienceDirect subscribers only

Related works:
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:eee:agiwat:v:96:y:2009:i:1:p:149-159

Access Statistics for this article

Agricultural Water Management is currently edited by B.E. Clothier, W. Dierickx, J. Oster and D. Wichelns

More articles in Agricultural Water Management from Elsevier
Bibliographic data for series maintained by Catherine Liu ().