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

Author

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

Abstract

The net present value (NPV) of downstream economic benefits of changes in water-yield (W) and salt-load (S) of mean annual river flow received by a lower catchment 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 defines conditions under which costs of strategic upstream land use changes could be exceeded by compensations afforded by downstream benefits from altered water-yields and/or lower salt loads. The paper presents methods, and preliminary calculations for an example river, quantifying the scope for such combinations, and raising the question of institutional designs to achieve mutually beneficial upstream and downstream outcomes. Examples refer to the Macquarie River downstream of Dubbo, NSW, and Little River, an upstream tributary.

Suggested Citation

  • Nordblom, Thomas L. & Hume, Iain H. & Finlayson, John D. & Kelly, Jason A. & Welsh, Rob & Hean, Robyn L., 2007. "Downstream benefits vs upstream costs of land use change for water-yield and salt-load targets in the Macquarie Catchment, NSW," 2007 Conference (51st), February 13-16, 2007, Queenstown, New Zealand 10355, Australian Agricultural and Resource Economics Society.
  • Handle: RePEc:ags:aare07:10355
    DOI: 10.22004/ag.econ.10355
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    Cited by:

    1. Nordblom, T.L. & Christy, B.P. & Finlayson, J.D. & Roberts, A.M. & Kelly, J.A., 2010. "Least cost land-use changes for targeted catchment salt load and water yield impacts in south eastern Australia," Agricultural Water Management, Elsevier, vol. 97(6), pages 811-823, June.
    2. Nordblom, Tom & Finlayson, John D. & Hume, Iain H. & Kelly, Jason A., 2009. "Supply and Demand for Water use by New Forest Plantations: a market to balance increasing upstream water use with downstream community, industry and environmental use?," Research Reports 280785, New South Wales Department of Primary Industries Research Economists.

    More about this item

    Keywords

    Land Economics/Use;

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