Discussion of responses to climate change has focused on the options of
mitigation and adaptation. These have frequently been presented as polar
alternatives, with some opponents of action to stabilize the global climate
arguing that it would be more cost-effective to focus on adaptation. However,
mitigation and adaptation are not exclusive alternatives, and will, in many cases
be strategic complements (Bosello, Carraro and de Cian 2009).
Even with action to stabilize atmospheric concentrations of CO2 at or near
current levels, climate change will continue for some decades and adaptation will
therefore be necessary. Conversely, as will be shown in this paper, most
adaptation strategies are feasible only if the rate and extent of climate change is
limited by mitigation.
In this paper, we will discuss the problems of modelling and responding to
climate change in irrigation systems, using the Murray-Darling Basin as an
example. We will examine the role of uncertainty in detail. Finally, we will
consider how responses to climate change interact with water policy.
The analysis follows the state-contingent modelling approach presented by
Adamson, Mallawaarachchi and Quiggin (2007) and previously applied to
medium term modelling of climate change by Adamson, Mallawaarachchi and
Quiggin (2009). It extends previous work by examining the interaction between
adaptation and mitigation, a task which requires the use of a range of long run
climate projections for the period 2010 to 2100.
The paper is organized as follows. The implications of global climate change for
water resources and their management are outlined in Section 1. The economic,
social and environmental significance of the Murray-Darling Basin is described
in Section 2, and the effects of climate change on the already highly variable
rainfall patterns of the Basin are discussed. Section 3 deals with the modelling of
water allocation, using a state-contingent approach to risk and uncertainty, in
which irrigators may respond flexibly to changes in the stochastic distribution of
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