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A Report on the over-Extraction of Groundwater in Queensland

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A Report on the over-Extraction of Groundwater in Queensland
A REPORT ON THE OVER-EXTRACTION OF GROUNDWATER IN QUEENSLAND

Prepared for:
THE IDEAS SUMMIT ON THE ENVIRONMENT

Due: 22 May 2013

Submitted: 22 May 2013

Prepared By: Katie Gray
Executive Summary
The purpose of this report is to focus on an aspect of environmental economics, namely over-extraction of groundwater in Queensland and provide and evaluate a possible solution for this issue.
Groundwater is a valuable resource which is not being protected in Queensland. Its preservation is dependent on climatic conditions and extraction rates. High extraction rates lead to irreversible damage to the volume of groundwater available for use.
Over-extraction of groundwater is a form of market failure as society’s economic and social goals are not being achieved – the future of the resource of groundwater is being jeopardised due to over-extraction. This is as a result of ill-defined property rights allowing people to over-exploit the resource without experiencing the negative consequences of their actions and information gaps regarding the severity of the issue causing the government to do little to resolve it.
To rectify this situation, there is a need for increased metering on Queensland bores and wells. This would supply the missing information needed to accurately gauge the severity of the issue. Once meters have been installed throughout Queensland, the government will be able to consider further action.
This report has evaluated the introduction of tradable permits to the legislation surrounding groundwater. It has considered the outcomes of a positive effect on the environment, and firm efficiency, however it has highlighted the fact that the introduction of tradable permits may have a negative effect on the competitiveness of firms.
This report is not a comprehensive analysis of the issue of over-extraction of groundwater in Queensland. It has presented the introduction of tradable permits as a possible solution, but the report recognises


Bibliography: Australian Natural Resources Atlas Natural Resource Topics, 2009 Water - Queensland - Water Resources Overview, Australian Government, accessed 12 May 2013, . Barron OV et al, 2011 Climate change impact on groundwater resources in Australia Cave, D et al., 2011, Economics for the Real World, Third edn, Pearson Australia, Melbourne. Dahlberg, E n.d. Tradable Pollution Permits as a Remedy for the Negative Externality, Stanford, accessed 1 May 2013, Kirkwood, L et al., 2009, Economics for the Real World, Second Edition edn, Pearson Heinemann, Melbourne. Plazinska, A, 2007, ‘Understanding Groundwater’, SCIENCE for DECISION MAKERS, p. 1, accessed 12 May 2013, Australian Government , Bureau of Rural Sciences.] Price Mechanism, 2013 The Economic Times, accessed 16 May 2013, . Sullivan, R, 2009, ‘Addressing our groundwater crisis’, www.ecomagazine.com, p. 1, accessed 12 May 2013, ECOS, CSRIO Waterlines report, National Water Commission, Canberra.
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