Modelling the Australian government's buyback scheme with a dynamic multi-regional CGE model

Peter Dixon, Maureen Rimmer and Glyn Wittwer

Centre of Policy Studies/IMPACT Centre Working Papers from Victoria University, Centre of Policy Studies/IMPACT Centre

Abstract: TERM-H2O is a dynamic, multi-regional computable general equilibrium model of the Australian economy with agricultural detail adapted to include regional water accounts. It focuses on the effects of inter-regional water trading. Factors of production are mobile between sectors in farm industries. TERM-H2O includes complementarity conditions that impose constraints on the volume of irrigation water traded between regions. The application detailed here is to the Commonwealth government's water buyback scheme against a background of temporary drought. The buyback scheme provides a windfall gain for holders of water rights by raising the price of irrigation water. The scheme may provide a net benefit to irrigation regions while increasing environmental flows.

Keywords: regional modelling; CGE modelling; water (search for similar items in EconPapers)
JEL-codes: C68 Q25 R13 R15 (search for similar items in EconPapers)
Date: 2009-04
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Citations: View citations in EconPapers (7)

Published in 'Saving the Southern Murray-Darling Basin: the Economic Effects of a Buyback of Irrigation Water', Economic Record 87(276):153-168, January 2011. DOI: 10.1111/j.1475-4932.2010.00691.x

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