Water policy reform in Australia: lessons from the Victorian seasonal water market *

The nature of the seasonal water market is examined using a theoretical model and empirical evidence from the Victorian market. Drivers of the seasonal opportunity cost of water include the underlying nature of investment in the industry made in the context of risky entitlement yields; and the timing and nature of information regarding seasonal water availability and rainfall. Seasonal water markets facilitate the re-allocation of water availability according to this short-run opportunity cost. Evidence from the market suggests that transactions costs are low and most of the existing constraints to trade in seasonal allocations are the result of hydrological conditions. Analysis of market data suggests that the price response of the market to water availability is much more pronounced in years of low rainfall. The implications of the paper for wider policy reform are that attention should be paid to improving property rights for the management of intertemporal risk before other reforms, such as broadening of permanent water markets and institutionalising environmental flows, are implemented. This is because these other reforms will change the spatial and temporal pattern of water use and thus affect reliability, which underpins the value of water in irrigated agriculture. Copyright Australian Agricultural and Resource Economics Society Inc. and Blackwell Publishing Ltd 2006.

High light field confinement for Fluorescence Correlation Spectroscopy using a Solid Immersion Lens

In this paper we present recent single molecule detection experiment using a solid immersion lens (SIL) for fluorescent correlation spectroscopy measurements. We compared the performance of the SIL in combination with an air objective (40×, numerical aperture (NA)=0.6) with a water immersion objective (40×, NA=1.15) in a confocal microscope system (ConfoCorr 1). Important parameters for single molecule experiments such as collection efficiency and excitation field confinement were investigated. Although the two set-ups have similar numerical aperture the measurements demonstrated higher field confinement and better collection efficiency for the SIL system in comparison to the conventional confocal set-up. Adding spherical aberrations shifts the sample volume up to 4 μm away from the plane surface of the SIL and conserves a diffraction limited focal volume. In this case the FCS autocorrelation demonstrates a free 3D diffusion of dye molecules in a highly confined light field

Third-party effects of water trading and potential policy responses *

A key feature of water policy reform in Australia has been the separation of water access entitlements from land titles and the establishment of markets for water. However, the separation of water entitlements from land failed to account for a number of characteristics that were implicit in the joint right. This has given rise to a number of third party effects as water is traded in an incomplete market. This paper describes four third-party effects of water trade; reliability of supply, timeliness of delivery, storage and delivery charges, and water quality and examines policy responses to address these effects. The discussion draws on the concepts of exclusiveness and rivalry to determine the applicability of property rights and other solutions to the third-party effects of trade. It is likely that many of the third-party effects of trade discussed in this paper do not warrant policy intervention at the national or state level, but intervention at the local level may be warranted. The costs of addressing some third-party effects may outweigh the benefits. Where there are significant gains from trade, the existence of these third-party effects should not been seen as a reason to impede trade. Copyright Australian Agricultural and Resource Economics Society Inc. and Blackwell Publishing Ltd 2006.

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. Copyright 2007 The Authors Journal compilation 2007 Australian Agricultural and Resource Economics Society Inc. and Blackwell Publishing Ltd .