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Economic effects of climate change in the Murray–Darling Basin, Australia

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  • Jiang, Qiang
  • Grafton, R. Quentin

Abstract

This study uses a hydro-economic model to examine the role of water trading, and the economic impacts of climate change and reduced surface water availability in the Murray–Darling Basin. The results show that losses to irrigated agriculture under a median climate change scenario are modest, but under a ‘modified 2030 dry extreme scenario’ there would be substantial reductions in water use, irrigated land use and profits. Nevertheless, the Basin-wide proportional economic impacts would be less than the percentage decline in water use. A comparison of model results with and without inter-regional water trade shows that inter-regional water trade in periods of much reduced water availability mitigates the on-farm impacts of climate change. Given that agricultural production in the Basin is likely to be affected by climate change, the development of drought-tolerant crops and cultivars along with learning and extension of best farming practices to reduced water use could also assist irrigated agriculture adapt to climate change within the Basin.

Suggested Citation

  • Jiang, Qiang & Grafton, R. Quentin, 2012. "Economic effects of climate change in the Murray–Darling Basin, Australia," Agricultural Systems, Elsevier, vol. 110(C), pages 10-16.
    • Handle: RePEc:eee:agisys:v:110:y:2012:i:c:p:10-16
    DOI: 10.1016/j.agsy.2012.03.009
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    1. Jeff Connor & Kurt Schwabe & Darran King & David Kaczan & Mac Kirby, 2009. "Impacts of climate change on lower Murray irrigation ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 53(3), pages 437-456, July.
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    3. Grafton, Rupert & Jiang, Qiang, 2011. "Economic effects of water recovery on irrigated agriculture in the Murray-Darling Basin," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 55(4), pages 1-13.
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    2. Bauman, Allison & Goemans, Christopher & Pritchett, James & Thilmany McFadden, Dawn, 2015. "Modeling Imperfectly Competitive Water Markets in the Western U.S," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 201448, Agricultural and Applied Economics Association.
    3. King, Darran A. & Meyer, Wayne S. & Connor, Jeffery D., 2019. "Interactive land use strategic assessment: An assessment tool for irrigation profitability under climate uncertainty," Agricultural Water Management, Elsevier, vol. 224(C), pages 1-1.
    4. Kirby, Mac & Bark, Rosalind & Connor, Jeff & Qureshi, M. Ejaz & Keyworth, Scott, 2014. "Sustainable irrigation: How did irrigated agriculture in Australia's Murray–Darling Basin adapt in the Millennium Drought?," Agricultural Water Management, Elsevier, vol. 145(C), pages 154-162.
    5. Lijuan Zhang & Jinxia Wang & Guangsheng Zhang & Qiuqiong Huang, 2016. "Impact of the methods of groundwater access on irrigation and crop yield in the North China Plain," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 8(4), pages 613-633, November.
    6. M. E. Qureshi & M. D. Ahmad & S. M. Whitten & A. Reeson & M. Kirby, 2018. "Impact of Climate Variability Including Drought on the Residual Value of Irrigation Water Across the Murray–Darling Basin, Australia," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 4(01), pages 1-25, January.
    7. Gohar, Abdelaziz A. & Cashman, Adrian, 2016. "A methodology to assess the impact of climate variability and change on water resources, food security and economic welfare," Agricultural Systems, Elsevier, vol. 147(C), pages 51-64.
    8. Wheeler, Sarah Ann & Zuo, Alec & Bjornlund, Henning, 2014. "Investigating the delayed on-farm consequences of selling water entitlements in the Murray-Darling Basin," Agricultural Water Management, Elsevier, vol. 145(C), pages 72-82.
    9. Claire Settre & Jeff Connor & Sarah Ann Wheeler, 2017. "Reviewing the Treatment of Uncertainty in Hydro-economic Modeling of the Murray–Darling Basin, Australia," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 3(03), pages 1-35, July.

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