The water of the Great Artesian Basin is an important resource for the grazing industry in the semi-arid and arid areas of the Basin. The initial development of the Basin was a "free for all" in an open access environment. State governments now license bores to restrict the use of water, but enforcement varies across states. The most widespread use of the water from the Basin is for stock water. In some sub-basins users of stock water already compete with each other and with other uses of water. There are clear local externalities with neighbouring bores but the extent of extraction externalities of any bore on the entire Basin is probably limited. Most of the stock water is reticulated in bore drains. Replacement of the drains with a polypipe reticulation system (primarily a water saving technology) represents a major investment for users. The replacement decision is complicated by the necessity for unanimity among members of a Bore Trust and by financing constraints. As competition increases for the use of water, the pricing of water or the allocation of transferable water rights could provide incentives for the possible adoption of water saving technology.


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