Natural Resource Buybacks

BDA Group’s report on natural resource buybacks, funded by Land and Water Australia, raises a number of concerns relevant to the Australian Government’s Water for the Future buyback program. The report demonstrates that no single instrument is likely to be effective in meeting the diversity of environmental watering demands faced under the Living Murray and more broadly across Australia. A key factor underlying this conclusion is the significant variability in watering demands over time within and between different sites.

The report demonstrated the importance of tailoring market instruments to suit the characteristics of individual environmental demands and prevailing water markets. The challenges will be compounded where environmental managers will have to build water portfolios to meet a suite of environmental watering demands with varying levels of complementarity and connectivity. The potential rewards from an effectively constructed portfolio will also be commensurately larger. The report can be downloaded here.

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