Offsetting with Salinity Credits: An Alternative to Irrigation Zoning

Irrigation induced salinity is a serious problem in many countries around the world. In Australia, this type of salinity is most pronounced in the valley of the River Murray in South Australia. Location of irrigation enterprises has been identified as a key factor that needs to be taken into account by policies aimed at mitigating salinity. This article compares and contrasts two such policies: an irrigation zoning policy, where new irrigation enterprises are only allowed in low salinity impact zones, and an offsetting with salinity credits policy, where new irrigation enterprises can locate in high salinity impact zones, provided they offset their salinity impact with salinity credits. Key findings are that the offsetting policy will be both less costly and more effective in reducing salinity than a standalone irrigation zoning policy. This is due to the presence of incentives for choosing "optimal" location of irrigation enterprises when costs of salinity credits are taken into account.irrigation, least-cost, offsets, salinity, Land Economics/Use, Q15, Q18, Q25, Q50,

Optimal Coverage of Installations in a Carbon Emissions Trading Scheme (ETS)

Trading schemes for emission allowances have become a panacea for nations aspiring to reduce their aggregate emissions of greenhouse gases from industry in a cost-effective manner. The contention of this paper is that an emissions trading scheme (ETS) should not be based on blanket coverage of installations on a downstream level, but should rather be designed to include some installations, and from some industrial sectors. In the case of an ETS there are high costs of administration, monitoring and transacting imposed on the installations covered. These costs are supposed to be more than offset by the cost savings realised through trading in the market for emission allowances. However, the paper shows that not all installations can fully offset administrative costs, and are therefore exposed to higher cost compared to a situation under an alternative instrument (e.g. standard). The paper formulates a conceptual framework for analysing overall cost and benefits from an ETS in the light of administration and transactions costs. It theoretically establishes a threshold point for optimal coverage of installations on a downstream level. The paper uses data from EU ETS to empirically determine optimal coverage for selected sectors. The results indicate that blanket coverage is more costly than the determined optimum coverage plan.Climate Change, Emissions Trading Scheme, European Union, Marginal Abatement Costs, Environmental Policy, Environmental Economics and Policy, International Relations/Trade,

Taking Stock: Seventeen Years after the Murray-Darling Basin Agreement

There has now been almost two decades of natural resource management by signatory states under the Murray-Darling Basin Agreement Despite significant public expense, the success of initiatives to improve the Basin’s environmental remains ambiguous. This confusion is partly due to poorly distinguished investment outcomes, a blurring of the transparency of public spending and a lack of accountability of decision makers. The aim of this study is to demonstrate that significant environmental improvements could have been achieved at a much lower cost if decisive action been taken early. The research report outlines the myriad of Murray-Darling Basin related policies and its funding. It also notes the achievements and impediments to program success.water reform, water policy, cost efficiency, Murray-Darling Basin, Community/Rural/Urban Development, Environmental Economics and Policy, Land Economics/Use,

The Economics of Agricultural Land Use Dynamics in Coconut Plantations of Sri Lanka

In this study a spatially explicit economic analysis was employed to determine the land use change in a traditional coconut growing district of Sri Lanka. From a theoretical model of land use, an econometric framework was developed to incorporate spatial and individual effects that would affect the land use decision. Markovian transition probabilities derived from the econometric analysis and spatial analysis was used to predict the land use change over the next 30 years. The results revealed that the fragmentation and conversion of coconut lands to urban continue in the areas close to the urban centre and also with less productive lands. Spatial analysis provides further evidence of the positive trend of conversion of coconut lands to urban uses close to the urban areas.Resource /Energy Economics and Policy,

ECONOMIC EVALUATION OF WATERSHED MANAGEMENT OPTIONS IN THE IRRIGATED COTTON AREAS OF THE UPPER MURRAY-DARLING BASIN IN NEW SOUTH WALES, AUSTRALIA

The article combines economic and hydrologic modeling on the watershed level and proposes a method for determining optimal spatial location of irrigation enterprises and use of water by source and intensity of irrigation management. This combination of economic/technical investigation results with solution that explicitly accounts for deep-drainage as a source of environmental adversities. Alternative policies to achieve this solution are analyzed.Resource /Energy Economics and Policy,

Book Reviews

Teaching/Communication/Extension/Profession,

OPTIMAL SPATIAL ALLOCATION OF WASTE MANAGEMENT PRACTICES TO REDUCE PHOSPHORUS POLLUTION IN A WATERSHED

Phosphorus pollution from excessive litter application and municipal discharges causes eutorphication of lakes in the Eucha-Spavinaw watershed in eastern Oklahoma and western Arkansas. Consequent algae blooms impair the taste of drinking water supply drawn from the watershed and reduce the recreational values of the lakes. The paper shows how GIS data based biophysical modeling can be used to derive spatially optimal, least-cost allocation of agricultural management practices to be combined with optimal wastewater treatment activity from the point source in order to achieve socially optimal phosphorus load in the watershed. The optimal level of phosphorus load is determined by equating marginal abatement with marginal damage cost. Transportation activities in the model allow for transportation of litter within and out of the watershed. Results show uniform regulation of litter application is excessively costly relative to measures that encourage adoption of management practices that equate marginal abatement costs across pollution sources. The results also show that change in the land use patterns in a long-run and using alum based litter additives in short-run are economically efficient management options.Environmental Economics and Policy,

The Economics of Efficient Phosphorus Abatement in a Watershed

This study presents a method to determine efficient environmental targets at a watershed level. Efficient targets are devised by estimating abatement cost and cost of environmental damages and minimizing their sum. The method was applied to a case study of phosphorus pollution in a watershed in Oklahoma. Several cumulative scenarios with alternative abatement options were simulated and efficient targets were determined. As the number of abatement options at disposal to agricultural sources increased, their optimal abatement expanded relative to the abatement at the point source. Efficient targets were found to be dependent on the choice of policy that stimulates abatement.efficiency, environmental targets, phosphorus pollution, watershed, Resource /Energy Economics and Policy,