Economic Modeling Of Water: The Australian Cge Experience (global Issues In Water Policy)

As anthropogenic climate change accelerates, leading both to weather unpredictability and extremes, the issue of water use and extraction has never had a higher profile. There are few places where the problems of water management are more urgent than Australia, where drought, overextraction and salinisation have become major policy concerns, and where widespread and prolonged water shortages have spawned major shifts in urban water supply policy. This volume examines economic CGE (computable general equilibrium) modeling that, while applicable to a wide array of policy issues, has in practice been deployed largely in assessing water supply and management. It focuses in part on the vital Murray Darling Basin, Australia’s most significant source of riverine water supply, where environmental restoration and regional economic needs entail a complex balancing act. The book details the innovative TERM (The Enormous Regional Model) approach to regional and national economic modeling, and explains the conversion from a comparative-static to a dynamic model. It moves on to an adaptation of TERM to water policy, including the additional theoretical and database requirements of the dynamic TERM-H2O model. In particular, it examines the contrasting economic impacts of water buyback policy and recurring droughts in the Murray-Darling Basin. South-east Queensland, where climate uncertainty has been borne out by record-breaking drought and the worst floods in living memory, provides a chapter-length case study. The exploration of the policy background and implications of TERM’s dynamic modeling will provide food for thought in policy making circles worldwide, where there is a pressing need for solutions to similarly intractable problems in water management. Front Matter....Pages i-xv Practical Policy Analysis Using TERM....Pages 1-9 Front Matter....Pages 11-11 The TERM Model and Its Database....Pages 13-35 Introducing Dynamics to TERM....Pages 37-55 Front Matter....Pages 57-57 Water Resources Modeling: A Review....Pages 59-77 The Theory of TERM-H2O....Pages 79-98 Buybacks to Restore the Southern Murray-Darling Basin....Pages 99-118 The Economic Consequences of a Prolonged Drought in the Southern Murray-Darling Basin....Pages 119-141 Urban Water Supply: A Case Study of South-East Queensland....Pages 143-162 Applying TERM-H2O to Other Countries....Pages 163-178 Back Matter....Pages 179-186 Annotation Providing a balance between environmental restoration and regional economic needs in the Murray Darling Basin has become a major policy issue. This title details the TERM (The Enormous Regional Model) approach to regional modelling, focussing on applications to water policy Economic Modeling of Water 4 Foreword 6 Preface 8 Contents 10 Contributors 12 List of Figures 14 List of Tables 16 Chapter 1: Practical Policy Analysis Using TERM 18 Part I: The TERM Approach 27 Part II: Water Modeling 70 About the Authors 189 Index 192