Assessment of the potential costs and benefits of water trading across northern Australia

Assessment of the potential costs and benefits of water trading across northern Australia Report

Author(s): W.D. Nikolakis, R.Q. Grafton
Published: 2011
Publisher: North Australian Indigenous Land and Sea Management Alliance (NAILSMA), and Tropical Rivers and Coastal Knowledge (TRaCK), Charles Darwin University

Abstract: This report is the final of three reports and part of a two year project entitled Establishing water markets in northern Australia: a study to assess feasibility and consequences of market-based mechanisms of water delivery. This third report provides an assessment of the potential costs and benefits of water markets across northern Australia with consideration of efficiency, equity and effectiveness criteria. The region under focus is the tropical belt of northern Australia which comprises the jurisdictions of Queensland, Northern Territory and Western Australia, (with attention on the Gulf, Timor and North East drainage divisions). There are preconditions for a water market to be effective. Important is for there to be low to medium transactions costs. A transaction cost is the costs involved in executing a trade that are above and beyond the actual price paid for the water (they can include travel time, fees, title searches and other costs). The potential for high and increased transactions costs is significant across northern Australia. A key reason for this is uncertainty over Indigenous rights and interests to water, which if not resolved could impose constraints on water markets. This suggests that there must be greater certainty around Indigenous involvement in water markets.

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Suggested Citation
W.D. Nikolakis, R.Q. Grafton, 2011, Assessment of the potential costs and benefits of water trading across northern Australia, Report, viewed 16 June 2025, https://www.nintione.com.au/?p=3154.

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