IMPLICATIONS OF TAXING QUOTA VALUE IN AN INDIVIDUAL TRANSFERABLE QUOTA FISHERY: COMMENT

Resource /Energy Economics and Policy,

Buying Back the Living Murray: At What Price?

In June 2004 the Council of Australian Governments approved the Intergovernmental Agreement on Addressing Water Overallocation and Achieving Environmental Objectives in the Murray-Darling Basin (‘IGMDB’). The IGMDB set out arrangements for a ‘Living Murray’ that includes a budget of $500 million to return 500 billion litres of water per year to the Murray River by 2009. Unfortunately, two years later and only 11 billion litres have been returned as environmental flows as a result of the initiative. In response, the Australian Government in April 2006 proposed a new scheme to purchase water entitlements from farmers who undertake water-savings measures. We examine this proposal in relation to the general economic principles for the allocation of scarce water. We contend that the latest initiative, although helpful, suffers from two fundamental problems in terms of water pricing. First, the current market price for water entitlements does not include the value of water ‘in situ’, or the benefits it generates separate from its value in consumption. Second, the constraint imposed that water users undertake infrastructure investments when selling their entitlements unnecessarily raises the cost of returning water to the Murray River. We conclude that the latest scheme to achieve the laudable goals of the ‘Living Murray’ is not cost effective and that the ratio of litres of water returned to dollars spent could be much higher if the pricing policies were changed.Living Murray, scarce water, water entitlements, water pricing, pricing policies

Sydney Water : Pricing for Sustainability

We examine how scarcity pricing can be used to assist with urban water demand management in Sydney in low rainfall periods using an estimated aggregate daily water demand function. Modelling shows that current water supplies and water prices are inadequate to prevent Sydney reaching critically low water storage levels should there be a low rainfall period similar to what occurred in 2001 2005. Simulations indicate that, in low rainfall periods, the water price needed to balance supply and demand exceeds the marginal cost of supplying desalinised water. The policy implication is that even with expected increases in supply (groundwater withdrawals, recycling), Sydney water prices must be substantially raised over their current levels, preferably at predefined water storage trigger levels, in response to low rainfall periods.water, pricing, sustainability

Tuna-Led Sustainable Developlment in the Pacific

The paper reviews the importance of tuna fisheries in the western and central Pacific Island Countries (PICs) and examines whether current and proposed economically focussed institutional mechanisms, that underpin tuna management, are sufficient to promote appropriate and long term tuna-led development. Substantial potential gains are shown to exist from co-operation in terms of tuna management, but it seems highly unlikely such benefits will be realised in the short or medium term despite the formation in 2004 of the Western and Central Pacific Fisheries Commission. Even if gains from co-operation were to be realised, without substantial improvements in the nstitutional quality and capacity of many PICs the tuna fisheries might still fail to sustain the region’s long-term development. The study’s implications are that the twin development priorities in the region should be support for social infrastructure, especially capacity building to increase the effectiveness of the public sector, and the promotion of co-operative approaches to ensure the sustainability and profitable use of the region’s shared fishery resources.

Pricing Sydney water

Resource /Energy Economics and Policy,

Sydney Water: Pricing for Sustainability

We examine how scarcity pricing can be used to assist with urban water demand management in Sydney in low rainfall periods using an estimated aggregate daily water demand function. Modelling shows that current water supplies and water prices are inadequate to prevent Sydney reaching critically low water storage levels should there be a low rainfall period similar to what occurred in 2001-2005. Simulations indicate that, in low rainfall periods, the water price needed to balance supply and demand exceeds the marginal cost of supplying desalinised water. The policy implication is that even with expected increases in supply (groundwater withdrawals, recycling), Sydney water prices must be substantially raised over their current levels, preferably at pre-defined water storage trigger levels, in response to low rainfall periods.water, pricing, sustainability

Growth and the Environment in Canada: An Empirical Analysis

Standard reduced form models are estimated for Canada to examine the relationships between real per capita GDP and four measures of environmental degradation. Of the four chosen measures of environmental degradation, only concentrations of carbon monoxide appear to decline in the long run with increases in real per capita income. The data used in the reduced form models are also tested for the presence of unit roots and for the existence of cointegration between each of the measures of environmental degradation and per capita income. Unit root tests indicate nonstationarity in logs of the measures of environmental degradation and per capita income. The Engle-Granger test and the maximum eigenvalue test suggest that per capita income and the measures of environmental degradation are not cointegrated, or that a long-term relationship between the variables does not exist. Causality tests also indicate a bi-directional causality, rather than a uni-directional causality, from income to the environment. The results suggest that Canada does not have the luxury of being able to grow out of its environmental problems. The implication is that to prevent further environmental degradation, Canada requires concerted policies and incentives to reduce pollution intensity per unit of output across sectors, to shift from more to less pollution-producing-outputs and to lower the environmental damage associated with aggregate consumption.environment, economic growth, Canada

The Effects of Buy-Back Programs in the British Columbia Salmon Fishery

Policymakers have implemented five distinct buybacks of either vessels or salmon licenses over the past three decades in the British Columbia (BC) salmon fishery. The earliest buyback was one of the first of its kind in any fishery and the most recent buyback is one of the largest ever in terms of reducing vessel numbers and the funds used. This paper reviews the circumstances under which these buybacks were conducted with an emphasis on their impact on reducing fishing capacity and effort. The focus is on the two most recent buybacks that took place in 1996 and 1998-2000, what has been learned and what they have achieved.

MULTI-SPECIES INDIVIDUAL TRANSFERABLE QUOTAS: THE SCOTIA-FUNDY MOBILE GEAR GROUNDFISHERY

Few studies examine the economic effects of individual harvesting rights in multi-species fisheries. Using costs and earnings data from a multispecies individual transferable quota (ITQ) fishery in Nova Scotia, before and after the introduction of harvesting rights, the effects on inputs, outputs, prices, and vessel exit are examined. The results provide insights about the management of multi-species ITQs.Resource /Energy Economics and Policy,

Global water: issues and insights

This book brings together some of the world’s leading water researchers with an especially written collection of chapters on: water economics; transboundary water; water and development; water and energy; and water concepts. Introduction Freshwater governance holds a prominent position in the global policy agenda. Burgeoning water demand due to population growth and rising incomes is combining with supply-side pressures, such as environmental pollution and climate change, to create acute conditions of global water scarcity. This is a major concern because water is a primary input for agriculture, manufacturing, environmental health, human health, energy production and just about every economic sector and ecosystem. In addition to its importance, the management of freshwater resources is a complex, multidisciplinary topic. Encompassing a range of fields in the physical and social sciences, the task of sustainably meeting human and environmental water needs requires a depth and breadth of understanding unparalleled by most other policy problems. Our objective in this volume is to provide knowledge and insights into major issues and concepts related to freshwater governance. The book is divided into five themed parts: Economics, Transboundary governance, Development, Energy and Water Concepts. A part addresses each theme and opens with an introduction that provides an overview of key topics. For example, the introduction to the economics section presents two main foci: measuring the value of water and managing trade-offs between different water uses. The thematic case studies discuss issues such as water pricing in Organisation for Economic Co-operation and Development (OECD) countries, finance of water supply and irrigation infrastructure and improving agricultural production with enhanced water management. The aim of the volume is to accessibly communicate academic research from the many fields of freshwater governance. Too often, academic research is paywalled and/or written in a style that caters to colleagues in the same field, rather than a broader audience from other disciplines, the policy-making community and the general public. This open-access book presents the research of a range of global experts on freshwater governance in brief, insightful chapters that do not presume a high level of pre-existing knowledge of their respective subjects. This format is intended to present knowledge on the key problems of and solutions to global freshwater challenges. The final part presents research from several United Nations Educational, Social, and Cultural Organisation (UNESCO) supported water research Chairs and Centres. Support and coordination of the insititutions highlighted in this part of the book is provided by UNESCO. One water research Chair is The Australian National University – UNESCO Chair in Water Economics and Transboundary Governance, which was established in April 2010 and works with partners in southern Africa, UNESCO, the Global Water Partnership and other organisations to: (1) increase the skills, capacity, networks and potential of leaders and prospective water managers and policy-makers; (2) sustain and strengthen institutional capacity (especially in southern Africa) by providing a platform for collaboration and institutional development; and, (3) develop innovative research, tools, case-studies, and insights on water economics, water governance and equity. Established by the ANU–UNESCO Chair, the Global Water Forum (GWF) seeks to disseminate knowledge regarding freshwater governance and build the capacity of students, policy-makers and the general public to respond to local and global water issues. The GWF publishes accessible, subscription-free articles highlighing the latest research and practice concerning freshwater governance. A broad range of water-related topics are discussed in a non-technical manner, including water security, development, agriculture, energy and environment. In addition to publishing articles, reports and books, the GWF is engaged in a range of activities, such as the annual Emerging Scholars Award and hosting a portal to educational resources on freshwater. We hope that you enjoy reading this book and, more importantly, gain an improved understanding of the complex freshwater-governance challenges facing us all on a global scale and at a local level