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Water Markets and Scarcity: Australia’s Murray Darling Basin and the US Southwest

Author

Listed:
  • R. Quentin Grafton

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

  • Clay Landry

    (West Water Research)

  • Gary D. Libecap

    (Bren School of Environmental Science and Management and Economics Department, University of California Santa Barbara)

  • R.J. (Bob) O’Brien

    (Percat Water)

Abstract

Water markets in Australia’s Murray-Darling Basin and the western US are compared in terms of their ability to mitigate water scarcity. The two regions share: (1) climate variability that requires large investment in water storages; (2) the need for internal and cross-border (state) water management; (3) an historical over allocation of water to irrigators; and (4) increasing competition among different uses (agricultural, environmental and recreational in situ uses, urban demand). The evaluation of the two markets suggests that on-going water market reform along with processes to account for the public interest can promote equity, environmental sustainability and economic efficiency.

Suggested Citation

  • R. Quentin Grafton & Clay Landry & Gary D. Libecap & R.J. (Bob) O’Brien, 2009. "Water Markets and Scarcity: Australia’s Murray Darling Basin and the US Southwest," Environmental Economics Research Hub Research Reports 0947, Environmental Economics Research Hub, Crawford School of Public Policy, The Australian National University.
    • Handle: RePEc:een:eenhrr:0947
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    References listed on IDEAS

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    2. Nadine, Wittmann, 2013. "A microeconomic analysis of the socio-economic situation along the Kat River Water Basin: Comment," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 52(2), March.
    3. Nadine Wittmann, 2014. "A Microeconomic Perspective on Water Resources Management: Analyzing the Effects on Optimal Land Rents Along a River Basin," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 28(5), pages 1309-1325, March.
    4. He, Lixia & Horbulyk, Theodore M. & Ali, Md. Kamar & Le Roy, Danny G. & Klein, K.K., 2012. "Proportional water sharing vs. seniority-based allocation in the Bow River basin of Southern Alberta," Agricultural Water Management, Elsevier, vol. 104(C), pages 21-31.
    5. Nadine Wittmann, 2014. "A Note on Distortional Distributional Effects in River Basin Discharge Permit Trade," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 28(1), pages 279-285, January.
    6. Wittmann Nadine, 2013. "A microeconomic analysis of the socio-economic situation along the Kat River Water Basin: Comment," Agrekon, Taylor & Francis Journals, vol. 52(2), pages 128-135, June.

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