A Framework for developing an integrated modelling system for water policy analysis

The irrigation industry in the Murray-Darling Basin is an important economic resource in terms of Australian agricultural production and rural employment. However, the sustainability of irrigation industries in the region is impeded by the uncertainties associated with the aging irrigation infrastructure, evolving institutional arrangements and growing resource degradation that impact on productivity. Industry reforms intended to relieve structural and behavioural impediments require wider participation of stakeholders, significant investments and commitment to change. The economic success of such policies will depend on the ability of the stakeholders to pay for those investments and the effectiveness of reforms in promoting productive innovation and market competitiveness. A modelling system to examine the spatial and intertemporal interactions of adjustment scenarios, including the evaluation of alternative infrastructure refurbishment options for the basin, is introduced in this paper. The framework will pemit the treatment of economic efficiency goals within specified environmental constraints. ABARE proposes to use this modelling framework in assessments of water resources policies, technology adoption infrastructure replacement options