Modelling the Impact of Environmental Policy Reforms on Water Markets and Irrigation Use in Australia

Glyn Wittwer and Randy Stringer

No 330982, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: This paper explores the key factors motivating change in national, regional and local water institutions and examines how the resulting policy reforms affect water markets and water use. FEDSA-WATER, a national level CGE model of Australia is used to examine the removal of implicit subsidies on water usage in irrigation industries in New South Wales and Victoria, and the removal of small implicit taxes on usage in South Australia, for the various irrigation industries. A second scenario taxes producers for salinity. In the water pricing reform scenario, there is a redistribution of irrigation activity to South Australia with pricing reforms. There is an overall decline in agricultural output but this is outweighed by the benefit in terms of reduced salinity damage. Similarly, in the case of taxing producers for the full cost of salinity damage, the benefit of reduced salinity outweighs the reduction in national income.

Keywords: Environmental Economics and Policy; Resource/Energy Economics and Policy (search for similar items in EconPapers)
Pages: 16
Date: 2002
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Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:330982

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