Downstream benefits vs upstream costs of land use change for water-yield and salt-load targets in the Macquarie Catchment, NSW Report as inadecuate




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The net present value (NPV) of downstream economic benefits of changes inwater-yield (W) and salt-load (S) of mean annual river flow received by a lowercatchment from an upper catchment are described as a 3-dimensional (NPV,W, S)surface, where dNPV/dW > 0 and dNPV/d(S/W) < 0. Upstream changes in land use (i.e.forest clearing or forest establishment, which result in higher or lower water-yields,respectively) are driven by economic consequences for land owners. This paper definesconditions under which costs of strategic upstream land use changes could be exceeded bycompensations afforded by downstream benefits from altered water-yields and/or lowersalt loads. The paper presents methods, and preliminary calculations for an example river,quantifying the scope for such combinations, and raising the question of institutionaldesigns to achieve mutually beneficial upstream and downstream outcomes. Examplesrefer to the Macquarie River downstream of Dubbo, NSW, and Little River, an upstreamtributary.

Keywords: policy ; markets ; upstream ; downstream ; water, salinity

Subject(s): Land Economics/Use

Issue Date: 2007

Publication Type: Conference Paper/ Presentation

PURL Identifier: http://purl.umn.edu/10355

Total Pages: 12

Series Statement: Conference Paper

Record appears in: Australian Agricultural and Resource Economics Society (AARES) > 2007 Conference (51st), February 13-16, 2007, Queenstown, New Zealand





Author: Nordblom, Thomas L. ; Hume, Iain H. ; Finlayson, John D. ; Kelly, Jason A. ; Welsh, Rob ; Hean, Robyn L.

Source: http://ageconsearch.umn.edu/record/10355?ln=en







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