Markets - Water Markets: Australia's Murray-Darling Basin and the US Southwest

ICER Working Paper No. 15/2009

34 Pages Posted: 22 Jul 2009

See all articles by Gary D. Libecap

Gary D. Libecap

University of California, Santa Barbara (UCSB) - Donald Bren School of Environmental Science & Management; University of Arizona - Karl Eller Center; National Bureau of Economic Research (NBER); PERC - Property and Environment Research Center

Quentin Grafton

The Australian National University

Clay Landry

affiliation not provided to SSRN

R. J. O'Brien

affiliation not provided to SSRN

Date Written: July 22, 2009

Abstract

Worldwide supplies of fresh water are increasingly scarce relative to demand. This problem is likely to be exacerbated with climate change. In this paper, we examine water markets in both Australia’s Murray Darling Basin and the western US and their prospects for addressing water scarcity. The two regions share a number of important similarities including: climate variability that requires investment in reservoirs to make water available in low-rainfall periods; the need for internal and cross-border (state) water management; an historical major allocation of water to irrigators; increasing competition among different uses (agricultural, environmental and recreational in situ uses, urban demand); and the potential for water trading to more smoothly and quickly allocate water across these competing uses. A comparison of the two regions provides important insights about how economic factors can encourage more efficient water allocation, market structure and government regulation.

Suggested Citation

Libecap, Gary D. and Grafton, Quentin and Landry, Clay and O'Brien, R. J., Markets - Water Markets: Australia's Murray-Darling Basin and the US Southwest (July 22, 2009). ICER Working Paper No. 15/2009 . Available at SSRN: https://ssrn.com/abstract=1437510 or http://dx.doi.org/10.2139/ssrn.1437510

Gary D. Libecap (Contact Author)

University of California, Santa Barbara (UCSB) - Donald Bren School of Environmental Science & Management ( email )

4670 Physical Sciences North
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HOME PAGE: http://www.esm.ucsb.edu/people/usernew.asp?user=glibecap

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HOME PAGE: http://www.bpa.arizona.edu/~libecap

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PERC - Property and Environment Research Center

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Quentin Grafton

The Australian National University ( email )

Crawford School (Bldg 132)
The ANU
Acton, Canberra, Australian Capital Territory 2601
Australia

HOME PAGE: http://https://crawford.anu.edu.au/people/academic/quentin-grafton

Clay Landry

affiliation not provided to SSRN ( email )

R. J. O'Brien

affiliation not provided to SSRN ( email )

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