Salinity, Uncertainty and Property

This project aims to develop and extend frameworks in economic theory in order to analyse the problem of salinity in Australia, and to examine possible incentive-based policies for its alleviation. The project will provide economic evidence for determining appropriate investments for solutions to environmental problems.

The four key objectives of the project are as follows:

1. A quantitative understanding of the economic and productivity impacts of past and existing salinity problems in Australia.
2. A specification of the instrument choices available to policy makers to confront salinity problems including quantity, price and regulatory approaches.
3. Adapt new theoretical insights about instrument choice in terms of climate change to the challenges faced by policy makers in controlling salinity in Australia.
4. Develop theoretical “top-down” and “bottom-up” models that incorporate the inherent uncertainty over causes, policies, outcomes and environmental stochasticity to determine “optimal” policy choices to mitigate salinity problems and encourage better land use.

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