Debunking Murray-Darling Basin water trade myths
Date
2022
Authors
Wheeler, S.A.
Editors
Advisors
Journal Title
Journal ISSN
Volume Title
Type:
Journal article
Citation
The Australian Journal of Agricultural and Resource Economics, 2022; 66(4):797-821
Statement of Responsibility
Sarah Ann Wheeler
Conference Name
Abstract
Australia, and particularly the Murray–Darling Basin (MDB), has the most mature and adopted water markets globally. Water trading is an important policy tool to deal with water scarcity issues, demonstrating allocative, dynamic and productive efficiency benefits. At the same time, water markets have been controversial in Australia. Markets have been blamed for a range of issues, including claims of unsustainability, inequity, farm bankruptcy, farmer distress and farm exit. This study reviews the MDB water trade literature and finds little evidence to support such myths. Arguably, the biggest misconception is that critics do not separate water markets from the meta-governance institutional structures that define them. Perceived water market failures are often due to governance issues –not water trade per se. This is not to say that market failure does not exist, it does, and indeed, there are also serious distributional issues that need addressing (e.g., water property entitlements for indigenous stakeholders). As such, water market design and governance need to adapt and evolve as problems arise and the market matures. However, in an era of increasing water scarcity, enabling water trade remains one of the most important instruments available to assist in water sharing, reallocation and farm adaptation to climate change.
School/Discipline
Dissertation Note
Provenance
Description
Access Status
Rights
© 2022 The Author This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited.