The Gnangara groundwater system is Western Australia’s most important groundwater resource, but it is being depleted. Although Australia has been at the forefront of establishing water markets, Western Australia has been slow to adopt legislation that would support trade in groundwater. This study explores the impact of introducing groundwater trading within the horticulture sector for farms that extract water from the Gnangara system. We use a simulation-optimization framework to evaluate market performance. The model is based on detailed water allocation data obtained from the relevant water agency. A farm optimization model was used to generate supply and demand functions for water at the individual farm level, and the market clearing price for water was established via a uniform price double-sided auction. The level of water available for extraction was also varied. The model considers unrestricted trading and trading within relatively small groundwater zones that limit the potential for local over-extraction externalities. The results show (1) substantial economic gains from allowing trading are possible, (2) most of the gains from establishing a groundwater market can be realized from within-zone trading only, (3) industry consolidation follows the introduction of trading, and (4) without zonal trading restrictions local over-extraction externalities are present. Also, with groundwater trading, we find that reallocating water to the most efficient producers could reduce horticulture sector water extraction by 14%, while maintaining the existing value of agricultural production in the area.

Gnangara 地下水系统是西澳大利亚州最重要的地下水资源，但它正在枯竭。尽管澳大利亚一直处于建立水市场的最前沿，但西澳大利亚州在通过支持地下水贸易的立法方面进展缓慢。本研究探讨了在园艺中引入地下水交易的影响从 Gnangara 系统提取水的农场部门。我们使用模拟优化框架来评估市场表现。该模型基于从相关水务机构获得的详细水分配数据。采用农场优化模型生成个体农场层面的水供需函数，通过统一价格双面拍卖建立水的市场出清价格。可用于提取的水的水平也不同。该模型考虑了不受限制的交易和相对较小的地下水区域内的交易，这些区域限制了当地过度开采外部性的可能性。结果表明 (1) 允许交易可能带来可观的经济收益，(2) 建立地下水市场的大部分收益只能通过区域内交易实现，(3) 引入交易后行业整合，(4) 没有区域交易限制，存在局部过度提取外部性。此外，通过地下水交易，我们发现将水重新分配给最高效的生产者可以将园艺部门的水提取量减少 14%，同时保持该地区农业生产的现有价值。