Skip to Content

Rural Water Use and the Environment: The Role of Market Mechanisms

Commissioned study

This study has concluded. The research report was released on 25 August 2006.

The Australian Government asked the Productivity Commission to assess and report on the feasibility of establishing market mechanisms for the efficient use of rural water and for dealing with rural water-management related environmental externalities.

This study was undertaken to achieve commitments outlined in paragraph 61(iii) of the National Water Initiative.

In undertaking the study, the Commission has:

  • assessed and reported on the feasibility of establishing workable market mechanisms:
    • to provide practical incentives for investment in rural water-use efficiency and water-related farm management strategies
    • for dealing with rural water-management related environmental externalities.
  • taken into account relevant practical experiences in other areas.

The Commission was also required to recognise that the purpose of the study is to support the parties in achieving the water markets and trading outcomes and actions under the National Water Initiative, and to consult with signatories to the Initiative (including through the inter-jurisdictional water trading group) and the National Water Commission.

Draft report

The draft report for this project is not available online.

Contact the Commission's Web Team to request an electronic copy

Please note: The draft report is for research purposes only. For final outcomes of this study refer to the research report.