Impact of Climate Variability Including Drought on the Residual Value of Irrigation Water Across the Murray–Darling Basin, Australia

M. E. Qureshi, M. D. Ahmad, Stuart Whitten (), Andrew Reeson and M. Kirby
Additional contact information
M. E. Qureshi: CSIRO Land and Water Flagship, Canberra, ACT, Australia†Fenner School of Environment & Society, ANU, ACT, Australia
M. D. Ahmad: CSIRO Land and Water Flagship, Canberra, ACT, Australia
M. Kirby: CSIRO Land and Water Flagship, Canberra, ACT, Australia

Water Economics and Policy (WEP), 2018, vol. 04, issue 01, 1-25

Abstract: Understanding the economic value of irrigation water is essential for supporting policies relating to the irrigation sector, irrigation water allocation decisions, water pricing and to compare the variable impacts of water reform within and across sectors of the economy. In this paper, we apply the residual method as a complement to other methods for determining the value of the water used over a wide range of irrigated crops in different seasons and regions of Australia’s Murray–Darling Basin. Using Monte Carlo simulation and probability theory, we estimated the combined impacts of biophysical and economic factors on the economic productivity of irrigation water use by individual activities. The estimated residual values vary across regions and in response to water availability as we would expect and warrant consideration of these factors in making any future water policy and investment decisions in different regions. As anticipated perennial (fruits and nuts, grapes) and high capital annual activities (cotton) represent the highest value water uses. Water trading from low to high value activities results in economic losses that are much lower than the proportional decline in water availability during periods of drought.

Keywords: Climate variability; water productivity; economic value; drought; residual approach (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.worldscientific.com/doi/abs/10.1142/S2382624X15500204
Access to full text is restricted to subscribers

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:wsi:wepxxx:v:04:y:2018:i:01:n:s2382624x15500204

Ordering information: This journal article can be ordered from

DOI: 10.1142/S2382624X15500204

Access Statistics for this article

Water Economics and Policy (WEP) is currently edited by Ariel Dinar

More articles in Water Economics and Policy (WEP) from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().