Conference Agenda
Overview and details of the sessions of this conference. Please select a date or location to show only sessions at that day or location. Please select a single session for detailed view (with abstracts and downloads if available).
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Daily Overview |
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Egg-Timer: Water and Agriculture Location: D-106 Session Chair: Luoye Chen, Hong Kong University of Science and Technology (Guangzhou) | |
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Early Allocation Announcements and Land-Use Decisions in the Murray Darling Basin Cap and Trade on Water University of Bologna, Italy Climate change is increasing the variability of water availability, while the rising social, ecological, and economic costs of traditional supply-side management have shifted the policy focus toward demand-side mechanisms, such as seasonal forecasts and water markets. The Murray-Darling Basin (MDB), where the world most devel- oped water market is located, is characterized by extreme hydro-climatic variability that necessitates complex strategies to support irrigated agriculture. While recent work by Rafey (2023) has demonstrated that water market realloca- tion generates substantial welfare gains in the MDB during droughts by optimizing water use after land-use decisions are made, this study overlooks adjustments at the earlier, extensive margin. A critical challenge remains in understanding how the timing of water allocation announcements drives irreversible planting decisions for water-intensive summer crops like rice and cotton, which must be sown before total seasonal water availability is fully known. To address this, we analyze agricultural land-use decisions across six regions in the southern and northern Murray–Darling Basin (MDB) from 2006 to 2020, using a panel regression framework to estimate the causal effect of pre-planting water allocation announcements on aggregate crop acreage, while controlling for rainfall and seasonal climate outlooks. We find that farmers significantly adapt acreage in response to early allocation signals. Specifically, in the NSW Murray and Murrumbidgee regions, the reduction in water demand driven by acreage contraction compensated for between 6.03% and 12.98% of the total yearly water reduction in the southern MDB during periods of scarcity. This response is comparable in magnitude to the gains from post-land-use decision reallocation found by Rafey (2023). These findings imply that in the MDB water market ex-ante acreage adaptation provides a resilience mechanism compa- rable to ex-post water trading, highlighting the critical value of early allocation information for managing water scarcity | |