Reviewing the adoption and impact of water markets in the Murray–Darling Basin, Australia

Wheeler, Sarah Ann; Loch, Adam; Zuo, Alec; Bjørnlund, Henning

doi:10.1016/j.jhydrol.2013.09.019

Cited by 147 publications

(86 citation statements)

References 28 publications

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“…In the Murray-Darling Basin (MDB) of Australia, irrigators' participation in the water market has been growing over the past two decades and this provides a unique opportunity to study irrigators' water market behavior. Two major forms of water markets exist in the MDB: the water allocation market (also known as temporary water markets, which involve the short-term right to use of water) and the water entitlement market (also known as permanent water markets involving the long-term right to access water-see Wheeler et al [7] for more detail). This paper focuses on the water allocation market.…”

Section: Introductionmentioning

confidence: 99%

Understanding Irrigator Bidding Behavior in Australian Water Markets in Response to Uncertainty

Zuo

Brooks

Wheeler

et al. 2014

Water

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Water markets have been used by Australian irrigators as a way to reduce risk and uncertainty in times of low water allocations and rainfall. However, little is known about how irrigators' bidding trading behavior in water markets compares to other markets, nor is it known what role uncertainty and a lack of water in a variable and changing climate plays in influencing behavior. This paper studies irrigator behavior in Victorian water markets over a decade (a time period that included a severe drought). In particular, it studies the evidence for price clustering (when water bids/offers end mostly around particular numbers), a common phenomenon present in other established markets. We found that clustering in bid/offer prices in Victorian water allocation markets was influenced by uncertainty and strategic behavior. Water traders evaluate the costs and benefits of clustering and act according to their risk aversion levels. Water market buyer clustering behavior was mostly explained by increased market uncertainty (in particular, hotter and drier conditions), while seller-clustering behavior is mostly explained by strategic behavioral factors which evaluate the costs and benefits of clustering.

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Section: Introductionmentioning

confidence: 99%

Understanding Irrigator Bidding Behavior in Australian Water Markets in Response to Uncertainty

Zuo

Brooks

Wheeler

et al. 2014

Water

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“…Surface water markets around the world occur mainly in semiarid areas and include: United States (mostly in the western states), Chile (Limarí River Valley), Australia (Murray-Darling Basin), Spain, Canada (South Saskatchewan River Basin), South Africa, China, Brazil, Mexico and Tanzania (Loch et al 2013;Wheeler et al 2014). All water markets can be hampered by political, technical, social and administrative factors.…”

Section: Actual Groundwater Tradementioning

confidence: 99%

Lessons to Be Learned from Groundwater Trading in Australia and the United States

Wheeler

Schoengold

Bjørnlund

2016

Integrated Groundwater Management

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This chapter provides an overview of the issues and challenges facing policy makers intending to establish groundwater markets. It studies in detail two developed countries that have introduced groundwater trading and have some experience in its implementation-Australia and the United States of Americaand draws out lessons from these countries that need to be considered for the development of groundwater markets around the world. The key lessons that this chapter stresses are: the importance of establishing institutions and regulations; investing in high quality economic and scientific research; that opportunities arise from crises; and that social concerns are not always the most important considerations to be aware of for efficient and effective groundwater markets. Groundwater Global Over Extraction and ShortageGlobally, groundwater extraction is the outcome of decisions by organisations and individuals; there is little control or planning involved with its management. Groundwater withdrawals supply a large percentage of the world's population. It accounts for about 50 % of global drinking water and 43 % of global irrigation (van der Gun 2012). As detailed in Chap. 2, its overuse is associated with several

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“…However, an integrated assessment about the performance of water markets in Spain is not available. Thus, an in-depth analysis of the economic, social and environmental impacts would be necessary in order to evaluate the water markets' effects on social welfare, as has been conducted in Australia by Edwards et al, NWC and Wheeler et al [78][79][80].…”

Section: Concluding Remarks and Future Researchmentioning

confidence: 99%

Water Markets in Spain: Performance and Challenges

Palomo-Hierro

Gómez‐Limón

Riesgo

2015

Water

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Law 46/1999 incorporated formal water markets into the Spanish legal and regulatory framework, allowing spot water markets and the creation of water banks. The implementation of water markets in Spain aimed at improving the efficiency of water use by reallocating water towards uses with higher added value. However, the performance of water markets in Spain has been rather disappointing, since they have been operative only during drought periods, and even under these extreme scarcity situations, trading activity counted for less than 5.0% of total water use. The narrowness of the market suggests that there are some barriers hampering their effective functioning. This paper examines the evolution and performance of water markets in Spain, relying on a transaction costs analysis framework. This analysis allows the identification of the main factors impeding water markets from operating effectively as a water reallocation tool. This analysis also provides some guidelines on how to overcome these obstacles and, thus, how to improve the efficiency of water use.

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Reviewing the adoption and impact of water markets in the Murray–Darling Basin, Australia

Cited by 147 publications

References 28 publications

Understanding Irrigator Bidding Behavior in Australian Water Markets in Response to Uncertainty

Understanding Irrigator Bidding Behavior in Australian Water Markets in Response to Uncertainty

Lessons to Be Learned from Groundwater Trading in Australia and the United States

Water Markets in Spain: Performance and Challenges

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