economic impacts of sdls and water for the future peter gooday

21
www.abare-brs.gov.au Economic Impacts of SDLs and Water for the Future Peter Gooday 22 October 2010

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Economic Impacts of SDLs and Water for the Future Peter Gooday. 22 October 2010. Objectives of the reports. To examine the effect on agriculture and regional economies of The Basin plan (3500 GL option) Water for the Future - PowerPoint PPT Presentation

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Page 1: Economic Impacts of  SDLs and Water for the Future Peter Gooday

www.abare-brs.gov.au

Economic Impacts of SDLs and Water for the Future

Peter Gooday

22 October 2010

Page 2: Economic Impacts of  SDLs and Water for the Future Peter Gooday

www.abare-brs.gov.au

Objectives of the reports

• To examine the effect on agriculture and

regional economies of

– The Basin plan (3500 GL option)

– Water for the Future

– Government additional funding commitment to

bridge any remaining gap

Page 3: Economic Impacts of  SDLs and Water for the Future Peter Gooday

www.abare-brs.gov.au

Methodology

Page 4: Economic Impacts of  SDLs and Water for the Future Peter Gooday

www.abare-brs.gov.au

Model Regions

Page 5: Economic Impacts of  SDLs and Water for the Future Peter Gooday

www.abare-brs.gov.au

AusRegion model baseline2001-02

Region GRP Ag. share of Output

  $ billion % of GDP %

Northern NSW 15.4 2.0% 17.6

Riverina NSW 11.3 1.5% 26.8

Western NSW 1.5 0.2% 25.2

North East VIC 8.6 1.1% 12.7

North West VIC 10.9 1.4% 17

Queensland MDB 7.9 1.0% 14.5

South Australia MDB 3.3 0.4% 30.9

MDB Total 59 7.8% 18.3

Australia Total 759.2 100.0% 3.6

Page 6: Economic Impacts of  SDLs and Water for the Future Peter Gooday

www.abare-brs.gov.au

Employment in MDB and Australia by sector, 2006

  Murray-Darling Basin Australia

Number employed

Proportion of people employed

Proportion of people employed

No. % %

Agriculture 90,520 9.8 2.7

Services to agriculture 5,690 0.6 0.2

Manufacturing 83,760 9.1 11

Electricity, gas and water supply 8,470 0.9 0.8

Retail 128,740 14 14.3

Government administration and defence 94,710 10.3 4.7

Education 71,550 7.8 7.5

Health and community services 97,270 10.6 10.7

Other industries 340,590 37 48.1

Total employed persons 921,300 100 100

Page 7: Economic Impacts of  SDLs and Water for the Future Peter Gooday

www.abare-brs.gov.au

Data & Model Assumptions

• Regional SDL data were provided by MBDA

• Data provided by DSEWPaC included– Original water purchase (WP), average price is $2073/ML

– Infrastructure Investments, average price is $4606/ML

– Infrastructure water savings occur when SDLs are implemented

– Additional WP to bridge the gap to SDLs occurs between now and when SDLs are implemented

Page 8: Economic Impacts of  SDLs and Water for the Future Peter Gooday

www.abare-brs.gov.au

Limitations

• Water supply variability is not investigated

• Analysis provides estimates over large regions,

estimates at finer scale are not available due to

limitations in the models

• Considers only productivity improvement from

increased water use efficiency through infrastructure

investment

Page 9: Economic Impacts of  SDLs and Water for the Future Peter Gooday

www.abare-brs.gov.au

Effects of the Basin Plan and ‘Water for the Future’ water entitlements in the MDB – a conceptual

outlineEnvironmental

water

Consumptive water

SDL

Existing Diversion Limit (the ‘Cap’)

Farmer’s Share

Commonwealth’s Share

Water to be reallocated from consumptive to

environmental use

Gap to be addressed by continued buy-backs

System savings from infrastructure investments on and off farm

Buy-back

Page 10: Economic Impacts of  SDLs and Water for the Future Peter Gooday

www.abare-brs.gov.au

Impacts on Irrigated Agriculture Change in Basin-wide GVIAP

-16

-14

-12

-10

-8

-6

-4

-2

0

2007

/08

2008

/09

2009

/10

2010

/11

2011

/12

2012

/13

2013

/14

2014

/15

2015

/16

2016

/17

2017

/18

2018

/19

2019

/20

2020

/21

Year

% c

ha

ng

e in

GV

IAP

SDLs

Page 11: Economic Impacts of  SDLs and Water for the Future Peter Gooday

www.abare-brs.gov.au

Impacts on Irrigated AgricultureChange in Basin-wide GVIAP

-16

-14

-12

-10

-8

-6

-4

-2

0

2007

/08

2008

/09

2009

/10

2010

/11

2011

/12

2012

/13

2013

/14

2014

/15

2015

/16

2016

/17

2017

/18

2018

/19

2019

/20

2020

/21

Year

% c

ha

ng

e in

GV

IAP

SDLs

SDLS andGovernmentactions

Page 12: Economic Impacts of  SDLs and Water for the Future Peter Gooday

www.abare-brs.gov.au

Economy-wide impactsChange in Gross Regional Product

Scenario: SDLs and Government Actions

-0.9

-0.7

-0.5

-0.3

-0.1

0.1

0.3

2007

/08

2008

/09

2009

/10

2010

/11

2011

/12

2012

/13

2013

/14

2014

/15

2015

/16

2016

/17

2017

/18

2018

/19

2019

/20

2020

/21

Year

% c

han

ge

in G

RP MDB

Australia

Page 13: Economic Impacts of  SDLs and Water for the Future Peter Gooday

www.abare-brs.gov.au

% change in GVIAP by regionScenario: SDLs and Government Actions

-35 -30 -25 -20 -15 -10 -5 0

CondamineBorder Rivers (QLD)Border Rivers (NSW)WarregoParooNamoiMacquarieMoonieGwydirBarwon DarlingLachlanMurrumbidgeeOvensGoulburn BrokenCampaspeWimmeraLoddonMurray NSWMurray VICLower MurraySA MurrayEastern Mt Lofty

Re

gio

n

% change in GVIAP

Page 14: Economic Impacts of  SDLs and Water for the Future Peter Gooday

www.abare-brs.gov.au

GVIAP by region

0 200 400 600 800 1000

CondamineBorder Rivers (QLD)Border Rivers (NSW)

WarregoParooNamoi

MacquarieMoonieGwydir

Barwon DarlingLachlan

MurrumbidgeeOvens

Goulburn BrokenCampaspe

WimmeraLoddon

Murray NSWMurray VIC

Lower MurraySA Murray

Eastern Mt Lofty

$ million/year

Baseline SDLs and Government Actions

Page 15: Economic Impacts of  SDLs and Water for the Future Peter Gooday

www.abare-brs.gov.au

Town Level Analysis

Page 16: Economic Impacts of  SDLs and Water for the Future Peter Gooday

www.abare-brs.gov.au

Towns that are highly reliant on irrigation expenditure

Page 17: Economic Impacts of  SDLs and Water for the Future Peter Gooday

www.abare-brs.gov.au

Land Use in Murray & Murrumbidgee

Page 18: Economic Impacts of  SDLs and Water for the Future Peter Gooday

www.abare-brs.gov.au

Land use in Condamine–Balonne, Gwydir & Namoi

Page 19: Economic Impacts of  SDLs and Water for the Future Peter Gooday

www.abare-brs.gov.au

Sensitivity Analysis Reduction in Basin GVIAP, with and without interregional

trade

Page 20: Economic Impacts of  SDLs and Water for the Future Peter Gooday

www.abare-brs.gov.au

Sensitivity AnalysisBasin GVIAP by industry, with interregional trade

Page 21: Economic Impacts of  SDLs and Water for the Future Peter Gooday

www.abare-brs.gov.au

Thank you

Science and economics for decision-makers