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Ecological Economics: Decentralization And Coordination

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Discuss about the Ecological Economics for Decentralization and Coordination.



The scarcity of resource is the primary economic problem. Notably, there would have been no economic problem, if the resources were not limited in nature. Hence, it is important for an economy to identify the scarce resources and their substitutes to implement a balance in the economic position of the nation. The primary reason for the occurrence of scarcity is the increasing demand of people for goods and limited supply of natural resources. The paper has been developed to conduct an analysis of scarce resource in Australia and identify the government policies that are used to control the use of scarce resources (Healey, 2009). Furthermore, the study will present various substitute and alternatives that can be used to overcome the scarcity of resource in Australia.

Currently, Australia is facing a drought that has led to a scarcity of water for irrigation purpose. Hence, a downfall can be seen in the production of Australian Agricultural Industry. Currently, the shortage of water has led to rising in the price range for buying a permanent water entitlement to $1000 to $1800 per megalitre. On the other hand, seasonal prices have risen to $147 to $197 per megalitre. Hence, a high level of scarcity can be seen for water resources in the Australian market that have negatively impacted the agricultural and other industries of the country (Chang, 2015). Furthermore, the Australian people face scarcity in water for their regular uses that have emerged to be a major problem for the economy.

Scarce Resource in Australia

Charis Chang (2015), in his article, says that water is becoming one of the major scarce resources of Australia. According to Sarah Wheeler, a day will come when people will start a war for water. The government report presents the increasing importance of water in the recent years. Water crisis can be seen all across the globe, but in the case of Australia, it is at an alarming level (Chang, 2015). A figure has been given below that presents the quantity of water delivery in irrigation districts and quantity of milk production in the Northern Victorian region. Hence, it can be seen that production of milk in the Victorian region is comparatively more than the water deliveries in the irrigation districts.

Water Vs Milk in Australia

Figure: Water Vs Milk in Australia

Source: (Pratt, 2015)

It can be seen that the Global Water Crisis has topped the Global Risk Perception Survey for the current year, beating the massive and rapid spread of infectious diseases. There are several consequences of the water crisis in the Australian economy. For example, water crisis and rise in the price of water supply have lead to increasing in the price of agricultural products. Furthermore, it increases the expenditure of the government in supplying fresh water to drink. Along with that, the scarcity of water also impacts the expenditure of the common people to meet the daily requirements of water. Currently, people have started installed filtering equipment and rainwater harvest systems by incurring massive investment to meet their daily requirement of fresh water (Hatanaka and Bagherzadeh, 2011). Hence, there is a need of substitute resources and better government policies to control the scarcity of water in Australia.

Government policies to control scarcity of resources

Through the identification of economic vandals over water resources, as an environment minister, Mr Turnbull has voted for water projects such as Murray-Darling Basin Plan. The Prime Minister of Australia wants to include farmers in agriculture portfolio so that water sources can be clearer (Sustainable Diversions in the Murray-Darling Basin, 2010). The health of the waterways must be managed efficiently following scientific methods to control irrigators. In the South Australian territory, the government has interested to develop irrigators in the lower end of the water resources such as rivers to balance the water issues (Parker and Tsur, 2007). By identifying the role of controlling the scare resources, cost-saving innovations have been implemented to preserve the water resources from contamination. Additionally, the government of Australia has identified the environmental issues to protect the natural water resources for future use. In order to protect the water pollution, significant legislations have been implemented in the industries such as heavy engineering industry and others to stop water contamination (Chang, 2015).  Recently, considering the worst drought situations in Queensland area, a national agenda on water scarcity has been announced to deal with the unfavourable challenges related to issues of water scarcity (Hajkowicz, 2007). Notably, due to the increase in population and climate change, the consumption of water has been increased dramatically.


Substitution of scare resources

In the case of natural resource economics, the primary objective of government policies is to find out replacements of scarce resources such as water. Environment resources such as water have been one of essential scare resources in recent time. The availability of water resources must be protected from contamination so that endless water cycle can be developed. The substitution of water resource can be done through managing efficient water recycling process (T. Kingsford, 2009). The government of Australia has developed water filtration plants so that scarcity of water resources can be solved to some extent. Apart from that, water utilised in industrial purpose must be restored and reused to put an end to the water scarcity. Furthermore, water scarcity has significantly affected the mass population of the country. Apart from that, rainwater harvesting is another popular concept to mitigate extensive issues of water scarcity. Recently, the shortage of water has created a water market in Australia (Donnelly, 2015). Therefore, effective provisional plan and prompt decision-making of the government authorities can be instrumental in solving the issues attached to Australia's water crisis. Currently, contamination of water must be protected to limit the scarcity of water resource. Moreover, the mass population of the country must understand the issue of water shortage so that no wastage of water should be done.


The article has helped to understand the level of the issues associated with water scarcity in Australia. Moreover, the knowledge of the current scenario can be efficient to evaluate the existing position of the public as well as government on this challenging issue. Through the identification of the critical circumstances related to the water crisis, the role of the Australian government has been analysed in the paper. In order to protect the wetlands and waterways of the country, significant environment policies have been figured out. Furthermore, the contemporary agriculture portfolio and water recycling plants have been developed to eliminate the issue. Evidently, the role of the social public will be crucial to achieving the objectives to deal with the issue.



Chang, C. (2015). The precious resource we’ll all be fighting over. [online] NewsComAu. Available at: [Accessed Aug. 2016].

Donnelly, W. (2015). Modeling and Measuring Natural Resource Substitution. EJ, 6(4).

Hajkowicz, S. (2007). Allocating scarce financial resources across regions for environmental management in Queensland, Australia. Ecological Economics, 61(2-3), pp.208-216.

Hatanaka, A. and Bagherzadeh, N. (2011). A scheduling approach for distributed resource architectures with scarce communication resources. International Journal of High Performance Systems Architecture, 3(1), p.12.

Healey, J. (2009). Water management. Thirroul, N.S.W.: Spinney Press.

Parker, D. and Tsur, Y. (2007). Decentralization and Coordination of Water Resource Management. Boston, MA: Springer US.

Pratt, J. (2015). Delinquency as a Scarce Resource. The Howard Journal of Criminal Justice, 24(2), pp.93-107.

Sustainable Diversions in the Murray-Darling Basin. (2010). Sydney, N.S.W.: Wentworth Group of Concerned Scientists.

Kingsford, R. (2009). Managing Australia?s Scarce Water Resources for the Environment. Pac. Conserv. Biol., 15(1), p.4.

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