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A reform process is underway in the Murray-Darling Basin (Australia) to reallocate water from irrigated agriculture to the environment. The scale, complexity and politics of the recovery process have prompted interest in the role of local environmental water managers within state and federal governance arrangements. This paper examines prospects for a local role in environmental water management through the lens of the subsidiarity principle: the notion that effective governance devolves tasks to the lowest level with the political authority and capacity to perform them. The article defines and applies the subsidiarity principle to assess evolving federal-state-local interactions in environmental water policy, planning and practice in Australia's Murray-Darling River. In this context, subsidiarity is useful to clarify institutional roles and their coordination at a whole-of-river level. This analysis demonstrates opportunities for a local role in information gathering, innovation and operational flexibility to respond to opportunities in real time. It identifies significant limits to local action in upstream-downstream tradeoffs, economies of scale, capacity building and cost sharing for basin-wide or national interests, and accountability mechanisms to balance local, state and national rights and responsibilities. Lessons are relevant internationally for regions confronting complex allocation tradeoffs between human and environmental needs within multi-jurisdictional federal systems. Refereed/Peer-reviewed

Over-allocation of fresh water resources to consumptive uses, coupled with recurring drought and the prospect of climate change, is compromising the stocks of natural capital in the world’s basins and reducing their ability to provide ecosystem services. To combat this, governments world wide are making significant investment in efforts to improve sharing of water between consumptive uses and the environment, with many investments centred on modernisation of inefficient irrigation delivery systems, and the purchase of water by government for environmental flows. In this study, spatial targeting was applied within a cost-benefit framework to reconfigure agricultural land use in an irrigation district to achieve a 20% reduction in agricultural water use to increase environmental flows and improve the provision of other ecosystem services. We demonstrate using spatial planning and optimisation models that a targeted land use reconfiguration policy approach could potentially increase the net present value of ecosystem services by up to AUS$463.7m. This provides a threshold level of investment that would be justified on the basis of benefits that the investment produces. The increase in ecosystem services include recovering 61 GL of water for environmental flows, the sequestration of 10.6m tonnes of CO2-e/yr, a 13 EC (?S/cm) reduction in river salinity, and an overall 24% increase in the value of agriculture. Without a targeted approach to planning, a 20% reduction in water for irrigation could result in the loss of AUS$68.7m in economic returns to agriculture which may be only marginally offset by the increased value of ecosystem services resulting from the return of 61 GL of water to the environment.

Conservation investment in agricultural landscapes has evolved to take a more market-based or business approach. However, current levels of conservation investment are not likely to mitigate degradation to natural capital and ecosystem services. We propose the further evolution of a conservation industry to generate substantially increased investment in conservation in agricultural landscapes, particularly from the private sector. A mature conservation industry is envisaged as comprising of investors, producers, and service providers who produce conservation products and services, exchanged via market transactions. A number of requirements for a viable and effective conservation industry are identified including institutional infrastructure (conservation market institutions and regulatory systems), information provision (quantifying benefits, business models, and accounting and auditing standards), and facilitation (entrepreneurship incubation and capacity building). A conservation industry requires careful design and planning in order to operate effectively. Whilst it is not without risk, a conservation industry has the potential to increase participation and investment in conservation actions and enhance the sustainability of agricultural landscapes. Refereed/Peer-reviewed

Environmental policy makers are interested in ways to prevent environmental degradation without significantly limiting economic and social development. Increasingly, market-based instruments are being incorporated into the suite of policy tools to accomplish these aims. However, the lack of information on market-based instruments accessible to non-economists limits understanding of how and when a market-based instrument can be integrated into a traditional policy regime. This paper aims to address the lack of accessible information using a generic screening process for policy instruments demonstrated through application to a non-point source pollution problem in Lake Taupo, New Zealand. Refereed/Peer-reviewed

Irrigation induced salinity is adversely affecting the agricultural industry and the environment in many countries around the world. Spatial location of irrigation enterprises has been identified as one important factor that needs to be taken into account by policies aimed at mitigating salinity. In particular, policies aimed at restricting the location of irrigation enterprises have been recently proposed to address the irrigation induced salinity problem. This article compares and contrasts the costs of two versions of such a policy: a standalone irrigation zoning policy, where new irrigation enterprises are only allowed to locate in low salinity impact zones; and a salinity offsetting policy, where new irrigation enterprises can locate in high salinity impact zones, provided that they offset their salinity impact elsewhere. A key finding is that the offsetting policy is both less costly and more effective in reducing salinity than a standalone irrigation zoning policy. This is due to the presence of incentives for choosing "optimal" location of irrigation enterprises when the costs of salinity offsets are taken into account. Refereed/Peer-reviewed

Hydro-economic modeling is the combination of economic principles and hydrological modeling to achieve a more integrated representation of water resource management. In the Murray–Darling Basin (MDB), hydro-economic modeling has been widely used to analyze and inform basin-wide water policy. A growing but uneven literature base has prompted this review of MDB hydro-economic studies published over the past three decades to identify innovations and avenues for advancement. We focus particularly on the treatment of uncertainty, which is inherent in all modeling. While consideration of uncertainty is increasing in prominence, our review indicates the robust treatment of epistemic and stochastic uncertainty have not been fully integrated in the hydro-economic modeling literature. When hydro-economic modeling results are used to inform policy, treatment of uncertainty has both technical and political implications. We conclude that the methodological rigor of MDB hydro-economic modeling can be vastly improved with greater attention to quantifying, reducing and communicating uncertainties inherent in the modeling of water resources. Refereed/Peer-reviewed

Global agroecosystems can contribute to both climate change mitigation and biodiversity conservation, and market mechanisms provide a highly prospective means of achieving these outcomes. However, the ability of markets to motivate the supply of carbon sequestration and biodiversity services from agricultural land is uncertain, especially given the future changes in environmental, economic, and social drivers. We quantified the potential supply of these services from the intensive agricultural land of Australia from 2013 to 2050 under four global outlooks in response to a carbon price and biodiversity payment scheme. Each global outlook specified emissions pathways, climate, food demand, energy price, and carbon price modeled using the Global Integrated Assessment Model (GIAM). Using a simplified version of the Land Use Trade-Offs (LUTO) model, economic returns to agriculture, carbon plantings, and environmental plantings were calculated each year. The supply of carbon sequestration and biodiversity services was then quantified given potential land use change under each global outlook, and the sensitivity of the results to key parameters was assessed. We found that carbon supply curves were similar across global outlooks. Sharp increases in carbon sequestration supply occurred at carbon prices exceeding 50 $ tCO(2)(-1) in 2015 and exceeding 65 $ tCO(2)(-1) in 2050. Based on GIAM-modeled carbon prices, little carbon sequestration was expected at 2015 under any global outlook. However, at 2050 expected carbon supply under each outlook differed markedly, ranging from 0 to 189 MtCO(2) yr(-1). Biodiversity services of 3.32% of the maximum may be achieved in 2050 for a 1 $B investment under median scenario settings. We conclude that a carbon market can motivate supply of substantial carbon sequestration but only modest amounts of biodiversity services from agricultural land. A complementary biodiversity payment can synergistically increase the supply of biodiversity services but will not provide much additional carbon sequestration. The results were sensitive to global drivers, especially the carbon price, and the domestic drivers of adoption hurdle rate and agricultural productivity. The results can inform the design of an effective national policy and institutional portfolio addressing the dual objectives of climate change and biodiversity conservation that is robust to future uncertainty in both national and global drivers. Refereed/Peer-reviewed

Over-allocation of water resources to irrigation, industry, and cities has severely impacted flow-dependent riverine ecosystems and led to growing interest in ways to restore water to the environment; one increasingly popular approach is water buybacks. This paper reviews US and Australian experiences in buying back water, focusing on the conditions which enable and inhibit environmental water acquisitions in each country. We also compare experiences with buyback efforts in fisheries, another natural resource sector. Lessons from these experiences provide important insights into how future water buyback programmes to acquire environmental water could be operated more effectively. The review suggests that the overall success of an environmental water buyback is likely to be enhanced by (1) legal and institutional settings which clearly define water rights and lower administrative and other barriers to water transfers, (2) non-governmental organizations and community groups which play a complementary role to government, (3) creation of a system that will fairly distribute future risk of water availability and provide choices for a variety of ways of obtaining water, and (4) efforts that minimize negative community impacts, thus helping to maximize irrigator participation. Refereed/Peer-reviewed

A consistent methodology enabling the estimation of the economic losses associated with drought and the comparison of estimates between sites and across time has been elusive. In this paper, we develop an ecosystem service approach to fill this research gap. We apply this approach to analysis of the Millennium Drought in the South Australian portion of the Murray-Darling Basin which provided a natural experiment for the economic estimation of hydrological ecosystem service losses. cataloguing estimates of expenditures incurred by Commonwealth and state governments, communities and individuals, we find that nearly $810 million was spent during the drought to mitigate losses, replace ecosystem services and adapt to new ecosystem equilibria. The approach developed here is transferable to other drought prone regions, providing insights into the potentially unexpected consequences of drought and ecosystem thresholds and socioeconomic and political tipping points after which ecosystem restoration may become very costly. Our application to the South Australian Murray-Darling Basin demonstrates the potential of this approach for informing water, drought preparedness and mitigation policy, and to contribute to more robust decision-making. Refereed/Peer-reviewed

Groundwater trade is widely advocated for reallocating scarce groundwater resources between competing users, and managing over-allocated and declining aquifers. However, groundwater markets are still in their infancy, and the potential benefits and opportunities need investigation, particularly where there is a need to reduce the extraction from declining aquifers.This article evaluates economic impacts of reducing groundwater extraction for irrigation use in peri-urban Perth, Australia, where irrigation, a lake-based ecosystem, and public water supply are highly dependent on a declining groundwater resource. We present an assessment of market-based water trading approaches to reduce groundwater extraction with an economic model representing diversity in returns to groundwater use across a population of irrigators.The results indicate that potential economic costs of a proportional reduction in available groundwater for irrigation are 18-21% less if groundwater trade is possible. We also evaluate a water buyback from irrigation to provide public water supply as an alternative to new infrastructure. We find that buying back up to around 50% of current irrigation allocations could create new public water supply only at the cost of $0.32-0.39 million per GL, which is less than one fifth of the costs of new desalinisation or recycled water supply options ($2-3 million per GL). We conclude that, with rapid development of computer and internet based trading platforms that allows fast, efficient and low cost multiple party trading, it is increasingly feasible to realise the economic potentials of market-based trade approaches for managing overexploited aquifers. Refereed/Peer-reviewed

[1] Many hydrologic systems are likely to be affected by climate change. This is of particular importance given that agricultural production systems are inextricably linked to the hydrologic systems they rely upon. Although irrigation is often employed as a method to dampen the effect of short-term variation in climatic inputs to agricultural production, sources of irrigation water are not immune to long-term climatic change. Irrigation water use decisions are most often made at the farm level. It is at this scale that the economic and social impacts of climate change will be manifest. This paper presents an integrated stochastic dynamic modeling framework that can be used to investigate the viability of irrigated farms under alternative climate change scenarios. The framework is applied to a theoretical farm in the Murray Darling Basin, Australia, under four potential future climate scenarios. It is found that neglecting interannual variability in climatic inputs to agriculture consistently underestimates the reduction in farm viability caused by climate change and that multiyear sequences of climate states strongly influence estimates of farm profitability.

Vulnerability assessments have often invoked sustainable livelihoods theory to support the quantification of adaptive capacity based on the availability of capital-social, human, physical, natural, and financial. However, the assumption that increased availability of these capitals confers greater adaptive capacity remains largely untested. We quantified the relationship between commonly used capital indicators and an empirical index of adaptive capacity (ACI) in the context of vulnerability of Australian wheat production to climate variability and change. We calculated ACI by comparing actual yields from farm survey data to climate-driven expected yields estimated by a crop model for 12 regions in Australia's wheat-sheep zone from 1991-2010. We then compiled data for 24 typical indicators used in vulnerability analyses, spanning the five capitals. We analyzed the ACI and used regression techniques to identify related capital indicators. Between regions, mean ACI was not significantly different but variance over time was. ACI was higher in dry years and lower in wet years suggesting that farm adaptive strategies are geared towards mitigating losses rather than capitalizing on opportunity. Only six of the 24 capital indicators were significantly related to adaptive capacity in a way predicted by theory. Another four indicators were significantly related to adaptive capacity but of the opposite sign, countering our theory-driven expectation. We conclude that the deductive, theory-based use of capitals to define adaptive capacity and vulnerability should be more circumspect. Assessments need to be more evidence-based, first testing the relevance and influence of capital metrics on adaptive capacity for the specific system of interest. This will more effectively direct policy and targeting of investment to mitigate agro-climatic vulnerability. Refereed/Peer-reviewed

The explanatory model of cross-cultural miscommunication, or crosstalk, is extended here through a multi-feature, multi-dimensional analysis of Soviet and American speakers' discourse in two three-hour audio/video "spacebridge" meetings. The study demonstrates that variation between speakers' uses of co-occurring sets of lexical and syntactic features can contribute to crosstalk. Crosstalk is shown to be functionally motivated by interlocutors' different constructions of the speech-event context and norms of interpretation. A factor analysis of lexical and syntactic features in spacebridge participants' discourse identifies two main dimensions of stylistic variation; use of the sets of co-occurring features that constitute these dimensions are interpreted as performing different discourse functions, and thereby indexing different aspects of the speech-event context. Soviet floor turns that exhibit the greatest stylistic divergence from American stylistic behavior and expectations are shown to correlate with communicative breakdowns in the spacebridges, and thereby to contribute to crosstalk. The analysis suggests that, at some level, stylistic contextualization cues are quantitatively "analyzed" in real time by discourse participants, and it demonstrates some of the explanatory potential of quantitative modeling of complex indexical processes such as stylistic accommodation, divergence, and opposition. (Crosscultural communication, miscommunication, crosstalk, indexicality