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Rethinking the externality issue for dryland salinity in Western Australia
Author(s) -
Pannell David J.,
McFarlane Donald J.,
Ferdowsian Ruhi
Publication year - 2001
Publication title -
australian journal of agricultural and resource economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.683
H-Index - 49
eISSN - 1467-8489
pISSN - 1364-985X
DOI - 10.1111/1467-8489.00152
Subject(s) - externality , dryland salinity , market failure , salinity , natural resource economics , economics , business , microeconomics , environmental science , ecology , soil biodiversity , biology , soil science , soil organic matter , soil water
Dryland salinity has been conceived of as a problem involving massive off‐site impacts and therefore requiring coordinated action to ensure that land managers reduce those off‐site impacts. In economic terms, salinity is seen as a problem of market failure due to externalities, including external costs from one farmer to another and from the farm sector to the non‐farm sector. In this article, we argue that, at least in Western Australia (WA), externalities are much less important as a cause of market failure than has been widely believed. If all externalities from salinity in WA were to be internalised, the impact on farm management would be small.