Cover image for
Resource Name:
Resource Type:
External Resource
Future scenarios for the southern Murray-Darling Basin water market
Research reports
Series Issue:
Publication Date:
Since the peak of the Millennium drought, the southern Murray-Darling Basin (sMDB) has seen large increases in nut and cotton plantings, decreases in water supply due to environmental water recovery and tighter limits on water trade between regions. These changes have raised concerns about how the water market might cope under drought conditions. In this study, ABARES applies an economic model of the sMDB to simulate what would happen to the water market under a repeat of the Millennium drought, with current water demand, environmental water recovery, trade limits and carryover rules. These scenarios provide an indication of future water prices and trade patterns across the sMDB under a repeat of historical climate conditions (for the period 2002-03 to 2016-17). Key Issues * Modelling results suggest that under a repeat of historical conditions allocation water prices in the sMDB would rise no higher than the peaks observed during the previous drought. * Whilst demand for water has increased for cotton and almonds, this has been more than offset by reductions in demand in other industries particularly, grazing, dairy and rice. * Improvements in carryover rules will help to limit price rises under a repeat of the drought, with much larger volumes of water being stored between years. * Trade limits will likely be binding more often in the future, partly due to the changes in water demand. * While water price peaks are simulated to be no higher under a repeat of extreme drought conditions, they are higher on average, due in part to environmental water recovery. The modelling suggests a change in the distribution of prices, with fewer years of low prices.
Resource URL Description:
0 : Future scenarios for the southern Murray-Darling Basin water market - link to the ABARES website - HTML

1 : Interactive data dashboard - Future scenarios for the southern Murray-Darling Basin water market - Complex Type [0.1 MB]

2 : Future scenarios for the southern Murray-Darling Basin water market - Report - PDF [4.3 MB]
ABARES : Australian Bureau of Agricultural and Resource Economics and Sciences : Department of Agriculture

Right Management:
Use constraints: copyright

Other constraints: Licence type:Copyright

Other constraints: All material in this publication is licensed under a Creative Commons Attribution 4.0 International Licence except content supplied by third parties, logos and the Commonwealth Coat of Arms.

Other constraints: This publication (and any material sourced from it) should be attributed as: Gupta, M & Hughes, N 2018, Future scenarios for the southern Murray-Darling Basin water market, ABARES research report, Canberra, August. CC BY 4.0
ISBN 978-1-74323-394-8

ISSN 1447-8358
Asset Name: