Impacts of climate variability on the irrigation sector in the southern Murray-Darling Basin, Australia

Climate variability impacts on options available to irrigation landholders now, as will climate change into the future. In this paper, we demonstrate that factors that reduce effective rainfall and increase evapotranspiration and irrigation water salinity during drier periods act to reinforce climate variability impacts on irrigation water availability, indicating substantially larger costs of climate variability, and potentially climate change, than previously thought. Counteracting these impacts is the potential for on-farm and institutional adaptation options to moderate impacts. The impacts of climate variability and incremental adaptation options (including water markets) are modelled for the southern Murray Darling Basin, Australia. The estimated reductions in economic returns due to climate variability are much higher when combined effects are included but are markedly reduced when farm adaptation options are considered. There is also evidence of a threshold effect beyond which adaptation options become less effective, indicating the challenge in adapting to the larger changes anticipated under climate change.