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Investing in recovering water for the environment in Australia's Murray-Darling Basin

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  • Onil Banerjee

Abstract

Irrigated agriculture makes an important contribution to the economy of Australia's Murray-Darling Basin. Competing water demand, recurring drought and climate change have ushered in an era of water policy reform. To recover water for the environment, surface water extraction is capped and investment in irrigation infrastructure is prioritized. This article applies a computable general equilibrium model to evaluate the economic impacts of investment in irrigation in a case study of the Murrumbidgee subcatchment. Results indicate an increase in regional output, income and employment, while at the national level there is a small negative impact resulting from the transfer of resources to the basin and the crowding out of private investment.

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  • Onil Banerjee, 2015. "Investing in recovering water for the environment in Australia's Murray-Darling Basin," International Journal of Water Resources Development, Taylor & Francis Journals, vol. 31(4), pages 701-717, December.
    • Handle: RePEc:taf:cijwxx:v:31:y:2015:i:4:p:701-717
    DOI: 10.1080/07900627.2014.979398
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    References listed on IDEAS

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    1. Kirby, Mac & Connor, Jeffery D. & Bark, Rosalind H. & Qureshi, Muhammad Ejaz & Keyworth, Scott W., 2012. "The economic impact of water reductions during the Millennium Drought in the Murray-Darling Basin," 2012 Conference (56th), February 7-10, 2012, Fremantle, Australia 124490, Australian Agricultural and Resource Economics Society.
    2. António Afonso & Miguel St. Aubyn, 2009. "Macroeconomic Rates Of Return Of Public And Private Investment: Crowding‐In And Crowding‐Out Effects," Manchester School, University of Manchester, vol. 77(s1), pages 21-39, September.
    3. Adamson, David & Loch, Adam, 2013. "Natural capital and climate change: Possible negative sustainability impacts from 'gold plating' irrigation infrastructure," Risk and Sustainable Management Group Working Papers 156480, University of Queensland, School of Economics.
    4. Peter B. Dixon & Maureen T. Rimmer & Glyn Wittwer, 2009. "Modelling the Australian government's buyback scheme with a dynamic multi-regional CGE model," Centre of Policy Studies/IMPACT Centre Working Papers g-186, Victoria University, Centre of Policy Studies/IMPACT Centre.
    5. Shoven,John B. & Whalley,John, 1992. "Applying General Equilibrium," Cambridge Books, Cambridge University Press, number 9780521266550, November.
    6. Kemp, Adrian & Hafi, Ahmed, 2001. "Benefits of increased irrigation efficiency in the Murrumbidgee Irrigation Area," 2001 Conference (45th), January 23-25, 2001, Adelaide, Australia 125685, Australian Agricultural and Resource Economics Society.
    7. Löfgren, Hans & Harris, Rebecca Lee & Robinson, Sherman, 2001. "A standard computable general equilibrium (CGE) model in GAMS," TMD discussion papers 75, International Food Policy Research Institute (IFPRI).
    8. Commission, Productivity, 2010. "Market Mechanisms for Recovering Water in the Murray-Darling Basin," Research Reports, Productivity Commission, Government of Australia, number 40.
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    Cited by:

    1. Onil Banerjee & Martin Cicowiez & Mark Horridge & Renato Vargas, 2016. "A Conceptual Framework for Integrated Economic-Environmental Modelling," CEDLAS, Working Papers 0202, CEDLAS, Universidad Nacional de La Plata.
    2. Banerjee, Onil & Cicowiez, Martin & Gachot, Sébastien, 2015. "A quantitative framework for assessing public investment in tourism – An application to Haiti," Tourism Management, Elsevier, vol. 51(C), pages 157-173.
    3. 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.
    4. Banerjee, Onil & Alavalapati, Janaki R.R. & Lima, Eirivelthon, 2016. "A framework for ex-ante analysis of public investment in forest-based development: An application to the Brazilian Amazon," Forest Policy and Economics, Elsevier, vol. 73(C), pages 204-214.

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