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Water Resources Modeling: A Review

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Economic Modeling of Water

Part of the book series: Global Issues in Water Policy ((GLOB,volume 3))

Abstract

Australian economists were modeling irrigation water scenarios many years before substantial reforms started taking effect. Early modelers recommended that the water authorities raise the price of irrigation water. A recurring theme of later modeling is that water trading plays an important role in improving allocative efficiency. The eventual COAG reforms included the separation of land and water titles. With this separation, water trading became easier. With such trading, the market rather than authorities determine the price of water. Modeling has shown that other institutional aspects of water management have also hindered optimal water allocations in the past.

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Notes

  1. 1.

    See http://www.environment.gov.au/water/policy-programs/lmi/index.html and http://www.environment.gov.au/water/australia/index.html

  2. 2.

    Water allocation policies in Victoria have changed substantially since. The water right and sales system was converted to high-reliability water shares and low-reliability water shares from 1 July 2007 (also unbundled were a delivery share and a water use licence). Carry over has been ­permitted in some form since 2006–2007.

  3. 3.

    That is, rights to water which had not previously been used.

  4. 4.

    In Chap. 6, these two regions experience substantial terms-of-trade gains from buybacks, even without compensation. The differences arise because Grafton and Jiang (2011) report only production-based income in these two regions: net water sales are an additional income source for farmers not reported in the study.

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Authors and Affiliations

  1. Centre of Policy Studies, Monash University, Clayton, VIC, Australia

    Marnie Griffith

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  1. Marnie Griffith
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Correspondence to Marnie Griffith .

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  1. Monash University, Centre of Policy Studies, Wellington Road, Clayton, 3800, Victoria, Australia

    Glyn Wittwer

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Griffith, M. (2012). Water Resources Modeling: A Review. In: Wittwer, G. (eds) Economic Modeling of Water. Global Issues in Water Policy, vol 3. Springer, Dordrecht. https://doi.org/10.1007/978-94-007-2876-9_4

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