An Integrated Modelling Approach For Assessing Water Allocation Rules

Understanding the magnitude and location of environmental and economic trade-offs is the main aim of the COAG Water Reforms process (DLWC 1999a). Since its inception in the early nineties, Catchment Management Committees and Boards have sought to develop and implement methods for determining appropriate water allocation policy rules at the catchment scale in NSW. This paper outlines a modelling methodology developed to assess water allocation rules as part of the COAG Water Reform Process. The first part of the paper introduces the concept of modelling nodes, a fundamental concept in model development and integration. This is illustrated by presentation of the model conceptual framework. Subsequent sections describe the process of identifying economic modelling units and economic techniques employed to achieve the study aims. Specifically, the study approach identifies why these techniques were selected and how they were utilised in a linear programming formulation. A major component of the work not discussed in detail is the hydrological and habitat system components that are integrated with the economic system. However, aspects of integration with the hydrological system are introduced.