Authors: Peter B. Dixon, Maureen T. Rimmer and Glyn Wittwer
TERM-H2O is a multi-regional model of the Australian economy adapted to include regional water accounts. Factors of production are mobile between sectors in farm industries. TERM-H2O is dynamic and also includes complementarity conditions that impose constraints on the volume of irrigation water traded between regions.
The application detailed here is to the Commonwealth government's water buyback scheme against a background of temporary drought. The buyback scheme provides a windfall gain for holders of water rights by raising the price of irrigation water. The scheme may provide a net benefit to irrigation regions while increasing environmental flows.
JEL classification: C68, Q25, R13, R15.
Keywords: regional modelling, CGE modelling, water.
An Executive Summary for Working Paper Number G-186 can be downloaded in PDF format. To print this you will need the Adobe Acrobat Reader.
Working Paper Number G-186 can be downloaded in PDF format. To print this you will need the Adobe Acrobat Reader.
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