scholarly journals Comparative assessment of water markets: insights from the Murray–Darling Basin of Australia and the Western USA

Water Policy ◽  
2011 ◽  
Vol 14 (2) ◽  
pp. 175-193 ◽  
Author(s):  
R. Quentin Grafton ◽  
Gary D. Libecap ◽  
Eric C. Edwards ◽  
R. J. (Bob) O'Brien ◽  
Clay Landry
Keyword(s):  
Institutional Innovation ◽  
Third Party ◽  
Water Markets ◽  
Western Usa ◽  
Murray Darling Basin ◽  
Freshwater Diversions ◽  
Scarce Water ◽  
Total State ◽  
Total Market

Water markets in Australia's Murray–Darling Basin (MDB) and the western USA are compared in terms of their ability to allocate scarce water resources. The study finds that the gains from trade in the MDB are worth hundreds of millions of dollars per year (note that all monetary units of dollars in this article are treated as US$ because Australian$ are converted at par). Total market turnover in water rights exceeds US$2 billion per year while the volume of trade exceeds over 20% of surface water extractions. In Arizona, California, Colorado, Nevada and Texas, trades of committed water annually range between 5 and 15% of total state freshwater diversions with over US$4.3 billion (2008 US$; monetary units in dollars are expressed in their value in US$ in 2008) spent or committed by urban buyers between 1987 and 2008. The two-market comparison suggests that policy attention should be directed towards ways of promoting water trade while simultaneously mitigating the legitimate third party concerns about how and where water is used, especially in conflicts between consumptive and in situ uses of water. The study finds that institutional innovation is feasible in both countries and that further understanding about the size, duration and distribution of third party effects from water trade and how these effects might be regulated, can improve water markets' ability to manage water scarcity better.

Overcoming third party effects from water trading in the Murray–Darling Basin

Water Policy ◽  
2006 ◽  
Vol 8 (1) ◽  
pp. 69-80 ◽  
Author(s):  
Teri Etchells ◽  
Hector M. Malano ◽  
Thomas A. McMahon
Keyword(s):  
Water Quality ◽  
Exchange Rates ◽  
Water Use ◽  
Third Party ◽  
Water Markets ◽  
Policy Makers ◽  
Water Trading ◽  
Murray Darling Basin ◽  
Delivery Reliability ◽  
Will Force

Water markets have great potential to increase the efficiency of water use. However, the very process of transferring a water entitlement can result in third party effects. Specifically, there are three types of impact that can affect the entitlements of third party irrigators: volumetric reliability, delivery reliability and water quality effects. In each case, policy makers must decide whether they will try to prevent the impacts and whether they will force traders to internalise third party effects. Potential strategies range from non-interventionist options, such as restricting trade, to market interventions, such as exchange rates, which adjust traded entitlements to account for volumetric externalities.

Determinants of water purchases by pistachio producers in an informal groundwater market: a case study from Iran

Water Policy ◽  
2015 ◽  
Vol 18 (3) ◽  
pp. 599-618 ◽  
Author(s):  
Tinoush Jamali Jaghdani ◽  
Bernhard Brümmer
Keyword(s):  
Water Allocation ◽  
Field Survey ◽  
Water Markets ◽  
Factors Affecting ◽  
Marginal Value ◽  
Socioeconomic Characteristics ◽  
Participation Decision ◽  
Eastern Iran ◽  
Scarce Water

Market-based water allocation systems have the potential to ensure that scarce water will flow to the user who earns the highest marginal value from that water. However, the number of recorded instances where water supply problems are solved by market-based systems remains limited. This study attempts to identify the decisive factors that motivate farmers’ participation in informal spot water markets in the Rafsanjan aquifer in south-eastern Iran. A two-stage random sampling was carried out in a field survey from November 2008 to February 2009. A logit model is used to test the factors affecting farmers’ decisions to buy groundwater from neighbours who share the same pump. The results show that the technological variables contribute substantially to the participation decision. For example, a decrease in water quality, an increase in the age of the garden, and an increase in the size of the water quota reduce the probability of participation. In contrast, more scattered plots, a higher water flow level from pumping, and a deeper well increase the probability of participation in water markets. Finally, the results suggest that in this area, the participation in water markets is motivated more by profit increasing factors than by farmer socioeconomic characteristics.

Improving water markets in Spain: Lesson-drawing from the Murray-Darling Basin in Australia

2022 ◽  
Vol 259 ◽  
pp. 107224
Author(s):  
Sara Palomo-Hierro ◽  
Adam Loch ◽  
C. Dionisio Pérez-Blanco
Keyword(s):  
Water Markets ◽  
Murray Darling Basin ◽  
Lesson Drawing

scholarly journals Production choices with water markets and risk aversion: the role of initial allocations and forward trading

2018 ◽  
Vol 46 (4) ◽  
pp. 579-608 ◽  
Author(s):  
Philippe Bontems ◽  
Céline Nauges
Keyword(s):  
Irrigation Water ◽  
Weather Conditions ◽  
Water Markets ◽  
Initial Water ◽  
Production Risk ◽  
Net Returns ◽  
Murray Darling Basin ◽  
Forward Trading ◽  
Allocation Decisions

Abstract We develop a theoretical model that describes risk-averse farmers’ decisions when facing production risk due to uncertain weather conditions and when irrigation water can be traded on a market. We focus on the role of initial water allocations granted to irrigated farms at the start of the season. The presence of water markets makes the future water price uncertain and hence the value of initial water allocations uncertain. We analyse the properties of this background risk and study how initial water allocations impact farmers’ land allocation decisions between an irrigated crop and a non-irrigated crop, both characterised by random expected net returns. We then extend the model by permitting irrigation water to be traded ex-ante at a known price (forward market). Finally, we illustrate our main theoretical findings using simulations. We calibrate distributions of the random variables based on observed data from the Murray–Darling Basin in Australia where a water market has been in place for several decades.

scholarly journals Removing barriers to facilitate efficient water markets in the Murray-Darling Basin of Australia

2009 ◽  
Vol 96 (11) ◽  
pp. 1641-1651 ◽  
Author(s):  
M. Ejaz Qureshi ◽  
Tian Shi ◽  
Sumaira E. Qureshi ◽  
Wendy Proctor
Keyword(s):  
Water Markets ◽  
Murray Darling Basin

A Comparative Assessment of Water Markets: Insights from the Murray-Darling Basin of Australia and the Western US

2011 ◽  
Author(s):  
Gary D. Libecap ◽  
R. Quentin Grafton ◽  
Eric C. Edwards ◽  
R. J. O'Brien ◽  
Clay Landry
Keyword(s):  
Comparative Assessment ◽  
Water Markets ◽  
Murray Darling Basin ◽  
Western Us

Water allocation reform to meet environmental uses while sustaining irrigation: a case study of the Murray–Darling Basin, Australia

Water Policy ◽  
2014 ◽  
Vol 16 (4) ◽  
pp. 739-754 ◽  
Author(s):  
Rosalind Bark ◽  
Mac Kirby ◽  
Jeffery D. Connor ◽  
Neville D. Crossman
Keyword(s):  
Water Allocation ◽  
Policy Instruments ◽  
Third Party ◽  
Irrigation District ◽  
Murray Darling Basin ◽  
Major River ◽  
Development Goals ◽  
Rapid Adjustment ◽  
Considerable Pressure

Governments are developing policy to reallocate water to environmental uses in many of the world's major river basins developed for irrigation. These policies can place considerable pressure on the irrigation sector to adjust, and may be perceived to conflict with food security and rural development goals. This paper reviews the literature examining opportunities to reduce irrigation district and third party externalities associated with rapid adjustment to water reallocation, with emphasis on recent water reform in the Murray–Darling Basin (MDB), Australia. We focus on opportunities to improve joint environmental and regional economic outcomes, by targeting and sequencing policy instruments operating at different scales.

scholarly journals Assimilation of Soil Moisture and Ocean Salinity (SMOS) brightness temperature into a large-scale distributed conceptual hydrological model to improve soil moisture predictions: the Murray–Darling basin in Australia as a test case

2020 ◽  
Vol 24 (10) ◽  
pp. 4793-4812
Author(s):  
Renaud Hostache ◽  
Dominik Rains ◽  
Kaniska Mallick ◽  
Marco Chini ◽  
Ramona Pelich ◽  
...  
Keyword(s):  
Soil Moisture ◽  
Brightness Temperature ◽  
Large Scale ◽  
Root Zone ◽  
Meteorological Model ◽  
Murray Darling Basin ◽  
Ocean Salinity ◽  
Physically Based ◽  
Temperature Observations

Abstract. The main objective of this study is to investigate how brightness temperature observations from satellite microwave sensors may help to reduce errors and uncertainties in soil moisture and evapotranspiration simulations with a large-scale conceptual hydro-meteorological model. In addition, this study aims to investigate whether such a conceptual modelling framework, relying on parameter calibration, can reach the performance level of more complex physically based models for soil moisture simulations at a large scale. We use the ERA-Interim publicly available forcing data set and couple the Community Microwave Emission Modelling (CMEM) platform radiative transfer model with a hydro-meteorological model to enable, therefore, soil moisture, evapotranspiration and brightness temperature simulations over the Murray–Darling basin in Australia. The hydro-meteorological model is configured using recent developments in the SUPERFLEX framework, which enables tailoring the model structure to the specific needs of the application and to data availability and computational requirements. The hydrological model is first calibrated using only a sample of the Soil Moisture and Ocean Salinity (SMOS) brightness temperature observations (2010–2011). Next, SMOS brightness temperature observations are sequentially assimilated into the coupled SUPERFLEX–CMEM model (2010–2015). For this experiment, a local ensemble transform Kalman filter is used. Our empirical results show that the SUPERFLEX–CMEM modelling chain is capable of predicting soil moisture at a performance level similar to that obtained for the same study area and with a quasi-identical experimental set-up using the Community Land Model (CLM) . This shows that a simple model, when calibrated using globally and freely available Earth observation data, can yield performance levels similar to those of a physically based (uncalibrated) model. The correlation between simulated and in situ observed soil moisture ranges from 0.62 to 0.72 for the surface and root zone soil moisture. The assimilation of SMOS brightness temperature observations into the SUPERFLEX–CMEM modelling chain improves the correlation between predicted and in situ observed surface and root zone soil moisture by 0.03 on average, showing improvements similar to those obtained using the CLM land surface model. Moreover, at the same time the assimilation improves the correlation between predicted and in situ observed monthly evapotranspiration by 0.02 on average.

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