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Economics of Water Reform in the Murray-Darling Basin

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  • R. Quentin Grafton

    (Crawford School of Public Policy, The Australian National University, Australia)

Abstract

The paper reviews current water reforms and initiatives in the Murray-Darling Bain from an economic perspective. It argues that while the principles (National Water Initiative) and rules (Water Act 2007) of water reform provide the framework to achieve the goals of reform, the financial incentives (2008 Water for the Future) need to change. In particular, the $3.1 billion allocated to buying water entitlements and the $5.8 billion targeted for water infrastructure subsidies under Water for the Future should be combined and spent on the basis of ‘value for money’. If this were accomplished, and the funds were spent prior to the implementation of sustainable diversion limits in July 2011, the Australian Government would be much more likely to achieve a sustainable future for the environment and agriculture within the Basin, at no extra cost.

Suggested Citation

  • R. Quentin Grafton, 2010. "Economics of Water Reform in the Murray-Darling Basin," Centre for Water Economics, Environment and Policy Papers 1004, Centre for Water Economics, Environment and Policy, Crawford School of Public Policy, The Australian National University.
    • Handle: RePEc:een:cweanu:1004
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    File URL: http://cweep.anu.edu.au/pdf/publications/research_papers/10-04_EconWaterReform.pdf
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    References listed on IDEAS

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    1. Peterson, Deborah C. & Dwyer, Gavan & Appels, David & Fry, Jane, 2004. "Modelling Water Trade in the Southern Murray-Darling Basin," Staff Working Papers 31925, Productivity Commission.
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    Cited by:

    1. Ancev, Tiho, 2015. "The role of the commonwealth environmental water holder in annual water allocation markets," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 59(1), January.
    2. Adamson, David & Oss-Emer, Max & Quiggin, John, 2011. "Property Rights and Water Buy Back in Australia's Murray-Darling Basin," Risk and Sustainable Management Group Working Papers 149883, University of Queensland, School of Economics.
    3. R. Quentin Grafton, 2010. "How to Increase the Cost-effectiveness of Water Reform and Environmental Flows in the Murray-Darling Basin," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 17(2), pages 17-40.

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    Keywords

    Murray-Darling Basin;

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