Re-examining economic options for import risk assessments

The economic impacts of altering quarantine policies are divided into two main areas: trade evaluations, utilising a partial equilibrium approach to determine the benefits of market liberalisation; or pest management economics, used to determine the on-ground impacts of introduced species. This paper rationalises why these approaches need to be brought together within the policy framework of import risk assessments to provide a greater understanding of the benefits and risks from market liberalisation.Biosecurity, pest management, import risk analysis, uncertainty

Book Reviews

Teaching/Communication/Extension/Profession,

Targeting Environmental Water from Irrigators in the Murray Darling Basin

The extended dry conditions in the Murray Darling Basin have resulted in unprecedented levels of reduced water availability for both irrigators and the environment. Concerns over environmental degradation and the health of the river Murray have prompted the Federal and State Governments to cooperate in a range of environmental water restoration programs, including environmental water purchases. These programs have been subjected to varying levels of criticism as to the environmental effectiveness and the economic merit in addressing the central problem of over allocation of a spatially distributed multiple use resource. This paper investigates the economic-environmental tradeoffs under the assumption of unrestricted trade in the Basin. Using a bio-economic model of the Murray Darling Basin we will investigate the opportunity costs of not allowing unrestricted trade, and then consider alternative Environmental Water Allocations (EWAs) to environmental Icon Sites. The model suggests that if unrestricted trade was implemented across the Basin, there would be potential for massive water savings compared to the current long term average cap, and benefits to trade in the order of $96 million. The model also suggests that, under unrestricted trade, the provision of large EWA’s will lead to large reductions in water use (40 percent), however the relative reduction in agricultural value will be much less (12 percent). This brings to question the current objective of the government buybacks as a transition to the Water Act 2009 Sustainable Diversions while allowing State enforced barriers to trade.Murray Darling Basin, water, environmental flows

Opportunity costs of restoring environmental flows to the Snowy River

The construction of the Snowy Mountains Hydro-electric Scheme in the 1960s resulted in the diversion of 99% of the Snowy River’s natural flow into the Murray and Murrumbidgee river systems. In 2000, the NSW, Victorian and Commonwealth governments agreed to restore between 21 per cent and 28 per cent of the natural flow. In this paper, we examine the implications of the Agreement for the value of water use in the Murray-Darling Basin.Snowy river, water, environmental flows

Water use and salinity in the MurrayÐDarling Basin: a state-contingent model

The MurrayÐDarling Basin comprises over 1 million square kilometres; it lies within four states and one territory; and over 12,800 gigalitres of irrigation water is used to produce over 40 per cent of the nation's gross value of agricultural production. The supply of water for irrigation is subject to climatic and policy uncertainty. The object of the present paper is to show how the linear and nonlinear programming models commonly used in modelling problems such as those arising in the MurrayÐDarling Basin may be adapted to incorporate a state-contingent representation of uncertainty.Murray model state-contingent

Climate change and climate uncertainty in the Murray-Darling Basin

It is likely that climate change will be associated with reductions in inflows of water to the Murray–Darling Basin In this paper, we analyse the effects of climate change in the Murray–Darling Basin, using a simulation model that incorporates a state-contingent representation of uncertainty. The severity of the impact depends, in large measure, on the extent to which climate change is manifested as an increase in the frequency of drought conditions. Adaptation will partially offset the adverse impact of climate change.climate change, Murray-Darling Basin, uncertainty, water

State-contingent modelling of the Murray Darling Basin: implications for the design of property rights

Questions relating to the allocation and management of risk have played a central role in the development of the National Water Initiative, particularly as it has applied to the Murray-Darling Basin. The central issues of efficiency and equity in allocations are best understood by considering water licenses as bundles of state-contingent claims. The interaction of property rights and uncertainty regarding water flows, production and output prices is modelled using a state-contingent representation of production under uncertainty. The role of technology and investment in the determination of efficient adaptation strategies to manage risks is explored using an illustrative example.

Options for salinity mitigation in the Murray-Darling Basin

The Murray-Darling Basin faces increasing pressure on water quantity and quality. In 2006-07, salt interception schemes implemented as part of the Murray–Darling Basin Salinity Management strategy removed over 470,000 tonnes of salt from the water supply, reducing the salinity of water flowing to Adelaide by about 200 EC units. However, the costs of salinity mitigation schemes are increasing. With possible continuing declines in average inflows, costs of salinity and salinity mitigation are expected to increase even further in the future. In this paper, a state-contingent model of land and water allocation is used to compare alternative options for salinity mitigation.salinity, drought, water

Climate change and climate uncertainty in the Murray-Darling Basin

Human activity has modified the environment at all scales from the smallest ecosystems to the global climate systems. In the analysis of the Murray-Darling Basin, it is necessary to take account of effects of human activity ranging from local changes in water tables and soil structure through basin-level effects of the expansion of irrigation to changes in precipitation pattern arising from the accumulation of greenhouse gases in the atmosphere. In this paper, we analyse the impact of, and adjustments to, climate change in the Murray-Darling Basin, using a simulation model that incorporates a state-contingent representation of uncertainty.Environmental Economics and Policy,

Water use and salinity in the Murray–Darling Basin: A state-contingent model

The supply of water for irrigation is subject to climatic and policy uncertainty. The object of the present paper is to show how the linear and non-linear programming models commonly used in modelling problems such as those arising in the Murray–Darling Basin may be adapted to incorporate a state-contingent representation of uncertainty. Estimates showing the potential value of improved water use are also derived.irrigation, salinity, uncertainty, Resource /Energy Economics and Policy,