Salinity and Economics

Dryland salinity results because the concentration of soluble salts near the soil surface disallows for plant growth. Economic externalities that develop from dry land salinity include loss of agricultural productivity, loss of natural biodiversity, damage to buildings, roads and other structures, and degradation of water supplies etc. Salinity is therefore arguably the greatest environment threat facing Western Australia. With limited public resources, government policies, strategic as well as cost effective methods to reduce dry land salinity is critical.

In this investigation some economic policies or strategies of reducing salinity and keeping a sustainable future will be discussed and highlighted;

1) Tradable Pollution Licenses: Environmental resources do not have a “price’ paid by users hence leads to serious depletion. To solve this problem governments should set pollution limits for each industry and issue tradable licenses where farmers with less polluting or better production (less externalities) can sell their unused licenses to other more polluting farmers (more externalities). If this “licensing strategy’ was to take place

4) Government Taxation and Subsidies: Tax rebates or tax enhanced tax deductibility allows farmers to have more money invested towards reducing salinity. However the majority of farmers may not use their saved finances for reducing salinity so this is why it is a good idea to place taxation on inputs that are used in production that cause environmental damage. This forces firms to adopt strategies or technologies that result in less externalities in order to achieve their goal of profit maximization. Subsidies/ cash payments are designed to encourage certain types of production. Eg. Share farming/ Cost Sharing. Cost sharing means that some of the cost farmers undertake in order to fix up the salinity problem of salinity will be subsidized/paid by the government. Whereas share farming may be when a government agency plants trees or crops on farmers land but the earnings are shared between the government and farmer.

of negative externalities. On the otherhand rewards should be handed to farmers who have undertaken changes in their mix of land use and management area. Rewards more include cash or credits tokens (eg. dolphins for tuna) for the farms products. This is a significant incentive for farmers as it is provides good publicity a

Some topics in this essay:
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