Investing in recovering water for the environment in Australia's Murray-Darling Basin.

Irrigated agriculture makes an important contribution to the economy of Australia's Murray-Darling Basin. Competing water demand, recurring drought and climate change have ushered in an era of water policy reform. To recover water for the environment, surface water extraction is capped and investment in irrigation infrastructure is prioritized. This article applies a computable general equilibrium model to evaluate the economic impacts of investment in irrigation in a case study of the Murrumbidgee subcatchment. Results indicate an increase in regional output, income and employment, while at the national level there is a small negative impact resulting from the transfer of resources to the basin and the crowding out of private investment. [ABSTRACT FROM AUTHOR]