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Non-market values, as measured by willingness to pay, are often required for integrated resource management projects where assessments include a range of social, financial and environmental indicators. In this study, improvements to the Tuckean wetland in New South Wales, Australia was presented as part of a discrete choice experiment. One treatment group was given more background information about the history and economy of the case study area, information about acid sulfate soils and a quiz. The other treatment group was given less background information and no quiz. The confidence intervals on willingness to pay estimates overlap suggesting more information has limited impact on willingness to pay estimates. Information influences perceptions of the survey and preference heterogeneity for some of the attributes. Our findings suggest that given the limited impact of background information, less information may be preferred due to cost considerations.

Worldwide, water scarcity, profit-cost pressure and restructuring of agricultural markets have led to on-farm diversification. The Goulburn Valley’s (GV) pome and stone fruit farms, in the Murray-D...

At the global level, the UN 2030 Agenda for Sustainable Development Goal 14 calls for action to significantly reduce marine litter pollution by 2025. To understand the non-market benefits of removing marine litter, researchers have conducted numerous studies on Willingness to Pay (WTP) for reductions in beach litter. This paper estimates the overall effect size of WTP for a worldwide dataset of 63 primary studies over 22 years by applying a meta-regression technique to assess the variability in WTP estimates. The results show an annual mean effect size of $US0.71 (or $US35.29) per person for a 1 % (for a corresponding 50 %) reduction in all types of beach litter. The observed heterogeneity is associated with WTP elicitation methods, beach attributes, geographic locations, and per-capita income. This study yields valuable information for policy makers to develop cost-effective policies and recommends standardised measurements to benchmark changes in marine litter pollution.

Water allocation regimes that adjudicate between competing uses are in many countries under pressure to adapt to increasing demands, climate‐driven shortages, expectations for equity of access, as well as societal changes in values and priorities. International authorities expound standards for national allocation regimes that include robust processes for addressing the needs of ‘new entrants' and for varying existing entitlements within sustainable limits. The claims of Indigenous peoples to water represents a newly recognised set of rights and interests that will test the ability of allocation regimes to address the global water governance goal of equity. No study has sought to identify public attitudes or willingness to pay for a fairer allocation of water rights between Indigenous and non‐Indigenous people. We surveyed households from the jurisdictions of Australia's Murray‐Darling Basin, a region undergoing a historic government‐led recovery of water, and found that 69.2% of respondents support the principle of reallocating a small amount of water from irrigators to Aboriginal people via the water market. Using contingent valuation, we estimated households are willing to pay A$21.78 in a one‐off levy. The aggregate value calculated for households in the basin's jurisdictions was A$74.5 million, which is almost double a recent government commitment to fund the acquisition of entitlements for Aboriginal nations of this basin. Results varied by state of residency and affinity with environmental groups. An information treatment that presented narrative accounts from Aboriginal people influenced the results. Insights from this study can inform water reallocation processes.

Trade-offs involving land use change, cultural values, water resources and jobs are critically important to understand the opportunity cost of resource extraction. Stated preference techniques can be particularly useful in eliciting the non-market values expressed as trade-offs. This study assesses preferences over the management of groundwater released from deep mining operations in Western Australia. A discrete choice experiment is used to investigate the trade-offs Australians are prepared to make for remote economic, ecological and cultural goods against costs. The results suggest that there is heterogeneity of preferences as indicated by a three-class structure of a latent class model. One class supports the use of released groundwater across a range of economic, ecological and cultural uses modelled: extending town water supply, restoring rangeland habitat, creating jobs for Aboriginal Australians and preserving cultural waterholes. The smallest class supports all these uses except job creation and the final class only supports preserving cultural waterholes. These results illustrate public attitudes towards cultural values as well as wider environmental policy tensions between instrumental and intrinsic values.

Urban development has altered surface-water hydrology of landscapes and created urban heat island effects. With climate change, increasing frequency of extreme heat events and in some areas, episodic drought and flooding, present new challenges for urban areas. Green infrastructure holds potential as a cost-effective means of providing microclimate cooling and stormwater diversion. Further, green open spaces when combined with the provision of equipment and facilities have the potential to promote physical and emotional well-being. However successful implementation may be predicated on co-ordinated efforts of multiple agencies. The Institutional Analysis and Development framework developed by Crawford and Ostrom is used in a case study to understand the institutional impediments, transaction costs and gaps in responsibility associated with the delivery of green infrastructure. Lessons learned are potentially transferable to other urban settings. Our analysis reveals areas of high transaction costs as well as a gap in the polycentric decision-making of agencies. The local government council is concerned with the well-being of its residents but has limited financial capacity. None of the agencies who deliver green infrastructure have responsibility for facilitating the indirect or preventative health benefits. Thus, a co-ordination problem among agencies can lead to suboptimal investments in green infrastructure.

Utilities face the challenge of enhancing long-term water security while minimising undesirable economic, social and environmental impacts of supply and demand management options. This paper provides an example of how the ecosystem services concept can be used to enumerate and organise broad impacts of water supply options. A case study of Adelaide, South Australia, is used to examine costs and benefits associated with different sources of water and source-water mix scenarios. Ecosystem service impacts are estimated using estimates from the literature. Seven water supply and demand management options are considered for Adelaide: 1) the River Murray, 2) Mt. Lofty Ranges catchments, 3) wastewater reuse, 4) desalination, 5) stormwater harvesting, 6) groundwater and 7) water conservation. The largest costs are associated with sourcing water from conservation measures such as water restrictions on outdoor watering estimated at $1.87/kL. Salinity damage costs associated with residential uses are estimated at up to $1.54/kL. Salinity damage costs of wastewater reuse were estimated at $1.16/kL. The largest benefit is coastal amenity services associated with stormwater harvesting and treatment estimated at $1.03/kL. Results show that there is a trade-off between financial costs and ecosystem services impacts with source-water mix scenarios with the highest ecosystem services cost having the lowest financial O&M cost and vice versa. This highlights the importance of taking ecosystem services into account when evaluating water supply options.

The increasing physical and economic scarcity of water due to increasing societal demands and climate change will require worldwide water policy reform. Water reform is an area of public policy fraught with polarised positions regarding community and environmental welfare. As opposition to water policy reform becomes entrenched, transaction costs increase. Nowhere is this more evident than the controversy surrounding, and irrigators’ opposition to, the Murray-Darling Basin Plan in Australia. This study sought to understand irrigators’ trust issues and why they feel the way they do towards water reform, though a best-worst survey methodology and regression analysis. The results suggest that irrigators believe they are shouldering a fair share of the water reform burden. Lack of trust in the national water agency and the federal government is associated with irrigator location, age and climate change disbelief. Findings support the recent push for more localised water decision-making to promote social trust. Refereed/Peer-reviewed

© 2019 Australasian Agricultural and Resource Economics Society Inc. In nonmarket valuation, practitioners must choose a format for the valuation questions. A common approach in discrete choice experiments is the ‘pick-one’ format, often with two alternative policy proposals and a status quo from which the respondent selects. Other proposed formats, include best-worst elicitation, where respondents are asked to indicate their most and least favoured alternative from a set. Although best-worst formats can offer efficiency in data collection, they can also lead to responses that are difficult to reconcile with neoclassical welfare estimation. The current article explores methodological issues surrounding the use of pick-one versus best-worst data for nonmarket valuation, focusing on framing and status quo effects that may occur within three-alternative discrete choice experiments. We illustrate these issues using a case study of surplus groundwater use from Western Australian mining. Results identify concerns that may render best-worst data unsuitable for welfare estimation, including a prevalence of serial choices in which the status quo is universally chosen as the worst alternative, rendering part of the choice process deterministic. Asymmetry of preferences and serial choices can be obscured when models are estimated using ‘naively’ pooled best-worst data. Results suggest that caution is warranted when using best-worst data for valuation, even when pooled results appear satisfactory.

Existing water resources are under stress due to increasing demands associated with population and economic growth as well as the effects of climate change which can reduce available supply and increase demand. Alternative sources such as stormwater harvesting and treated wastewater are being considered in many cities to supplement existing water supplies. Stormwater harvesting schemes that supplement existing water supply systems are complex as they consist of an integrated set of components that perform the functions of collection, storage, treatment, distribution and discharge. Many options and possible sizes exist for each component. Furthermore, the selection and evaluation of stormwater harvesting schemes need to consider economic, environmental and social criteria, as well as technical feasibility. In order to deal with this complexity, an integrated framework is presented that assists authorities with determining if stormwater harvesting is preferable to other water sources and, if so, what type of stormwater scheme is best.

Estimates of price elasticities of water entitlements (known as permanent water or water rights in the United States) are complicated by data limitations and problems of endogeneity. To overcome these issues, we develop an approach to generate stated preference data and combine them with revealed preference data to estimate price elasticities from various types of water entitlement sales in the southern Murray-Darling Basin, Australia. Our results suggest that price elasticities of demand and supply of high security water entitlements are inelastic in the relevant market price range between AUD $1,700 to $2,100 per mega-liter, and that supply is relatively more inelastic than demand. For lower reliability water entitlements, the price elasticity of demand is estimated to be even more inelastic than high security water entitlements. The price elasticity of supply for general security water entitlements is similar to high security water entitlements, while the supply of low reliability water entitlements is extremely inelastic for our data set. The comparison between the stated and revealed preference data provides strong evidence of support for a data fusion approach; nevertheless, some differences in water sale preferences were found for irrigators choosing not to sell all of their water. The consistency of our results signals support for the use of this methodology in other water basins around the world. Refereed/Peer-reviewed

Among the measures taken by the Australian government to address one of the worst droughts on record in the Murray-Darling Basin, exit package issues have rarely been investigated. A stated preference survey was designed to identify the range of water prices required for irrigators to sell all their water entitlements and leave the irrigation industry. Farmer participation responses are generally price elastic. There are large regional differences in price elasticities, but within a region there are few differences based on subgroups of farmers. Refereed/Peer-reviewed

In an effort to increase the livability of its cities, public agencies in Australia are investing in green infrastructure to improve public health, reduce heat island effects and transition toward water sensitive urban design. In this paper, we present a simple and replicable approach to building a business case for green infrastructure. This approach requires much less time and resources compared to other methods for estimating the social and economic returns to society from such investments. It is a pragmatic, reasonably comprehensive approach that includes socio-demographic profile of potential users and catchment analysis to assess the economic value of community benefits of the investment. The approach has been applied to a case study area in the City of Brimbank, a western suburb of Greater Melbourne. We find that subject to a set of assumptions, a reasonable business case can be made. We estimate potential public benefits of avoided health costs of about AU$75,049 per annum and potential private benefits of AU$3.9 million. The project area is one of the most poorly serviced areas in the municipality in terms of quality open spaces and the potential beneficiaries are from relatively low income households with less than average health status and education levels. The values of cultural (recreational benefits, avoided health costs, and increased property values) and regulating (reduction in heat island effect and carbon sequestration) ecosystem services were quantified that can potentially offset annual maintenance costs.

© 2014 Published by Elsevier Ltd. All rights reserved. Coastal environments are increasingly under threat from multiple stressors and pressure from human activities across the land-sea interface. Managing these pressures from people requires, more than ever, understanding what is at stake in terms of the benefits and values associated with coastal waters. This article presents the results of a choice experiment which was designed to elicit society's willingness to pay in the context of economic and environmental trade-offs people to improve coastal water quality. The study site is a coastal Australian city, Adelaide, South Australia. The city discharges a large proportion of its stormwater and treated wastewater to the coastal waters of Gulf St Vincent. Willingness to pay for a package of improvements to urban water management is considerable. A mix of projects that restores 25 days per year of water clarity, seagrass area from 60% to 70% of the original area and five reef areas is worth $AUS67.1. M to households in the Adelaide metropolitan area. The results can inform public policy discussions including the cost-benefit analysis of different water management strategies including investments in urban infrastructure.

This paper investigates the accessibility and usefulness of the Ecosystem Services (ES) framework to policy analysts. Using a mixed methods approach of document analysis and semi-structured interviews we examine how an ES assessment of the benefits of restoring water to the Murray-Darling Basin (MDB) in Australia has been used by government agencies in policy and planning. The ES assessment links changes in water management under the Basin Plan with modelled changes in water quality, river flows and inundation patterns and in turn to modelled freshwater and estuarine ecosystem response. These ecological responses were expressed in terms of incremental ES benefits which were valued monetarily using a variety of valuation techniques. To investigate how these pieces of information were used in the policy debate around the re-allocation of water in the MDB, semi-structured interviews were conducted with 20 Australian, State, and local government officials as well as academics and consultants. The interviews were designed to uncover the complex information dissemination process through networks within and among agencies. The results are mixed as to whether the assessment served to influence public policy. The report has been utilized and cited by Australian federal agencies, the downstream State of South Australia and conservation-based NGOs in their position statements and as such has been used as evidence in support of re-allocation of water in the MDB. A number of interview participants commented that the ES assessment raised awareness and this may lead to broader usage of the information and framework in the implementation phase of MDB water reform.

In the South Australian Murray Darling Basin Natural Resource Management (NRM) region, our case study site, decision-making and implementation of state NRM policy rests with a relatively small number of NRM leaders, advisors and support staff. In this paper we explore whether these community NRM leaders reflect the values and attitudes of landholders in the wider region. Our interest in the potential for shared values derives from NRM and the wider literature of the importance of shared values for driving institutional trust and NRM outcomes. A set of scales was used to measure key values and attitudes which shape participation in NRM programs. Data were collected from community NRM leaders and landholders from across the region. Through statistical testing, this study demonstrates that the values of the community NRM leaders differ to those of landholders on four out of the six values and attitudes examined. Landholders are more economically motivated, have a stronger sense of tradition, are more capital constrained and have a different set of environmental attitudes than community NRM leaders. Alternatives for building trust, given significant differences in shared values, are discussed.

Most Australian capital cities require many 100,000s of additional dwellings to accommodate demographic change and population pressures in the next two or three decades. Urban growth will come in the form of infill, consolidation and urban expansion. Plans to redevelop environmental amenities such as parks and open green spaces are regularly being put forward to local councils and State governments. Maintaining parks and reserves represents one of the largest costs to local councils. To aid in the evaluation of some of the different propositions, we report the results of a spatial hedonic pricing model with fixed effects for Adelaide, South Australia. The results indicate that the private benefits of a close proximity to golf courses, green space sporting facilities, or the coast, are in the order $0.54, $1.58, and $4.99 per metre closer (when evaluated at the median respectively). The historic Adelaide Parklands add $1.55 to a property’s value for each additional metre closer. We demonstrate how the estimated model could be used to calculate how local private benefits capitalized in property values change with changes in the configuration of a park.

© 2015, Springer Science+Business Media Dordrecht. The increasing use of internet surveys for stated preference studies raises questions about the effect of the survey mode on welfare estimates. A number of studies have conducted convergent validity investigations that compare the use of the internet with other survey implementation modes such as mail, telephone and in-person. All, but one, of these comparison studies is confounded different sample frames for the different modes of survey implementation. In this study we investigate differences in internet and mail survey modes holding the sample frame constant. This is done in the context of a choice-modelling study of improvements in the River Murray in Australia. We also investigate sample frame holding the survey mode (mail) constant. We find that survey mode (internet vs. mail) influences welfare estimates, and the internet welfare estimates are about 78 % of the mail welfare estimates on average. There is not a significant effect of sample frame (internet panel vs. postal addresses) on welfare estimates for implementation of a mail survey.

With water security issues looming large for much of the world's population, efficient use of water will become increasingly important. One solution is recycling wastewater however consumer acceptability is uncertain with the potential for rejection. People may support wastewater recycling conceptually but reject products containing recycled water due to the "yuck" factor. This simple problem presented an opportunity to compare different experimental approaches emerging from different literatures. This paper reports on an experiment which utilises meat products purported to be manufactured with or containing recycled production wastewater to explore choice behaviour. Participants (n=. 203 adult consumers of minced beef products) were randomly assigned into two conditions, a Binding Condition (told they would be eating four random selections of their next choices) and an Experience Condition (asked to taste four meatball samples prior to completing their next lot of choices). Statistically significant preference and scale differences between the pre-and post intervention were observed suggesting that participants may initially under-estimate their acceptance of a product with a negative attribute when they believe they are just answering a survey. One explanation of the differences among conditions is that participants experience a degree of anticipatory dread if told they will be eating their next choices in a survey compared with just answering a survey or experiencing the product prior to making choices. Results suggest that any investment in recycling will need to be justified on the basis of avoided waste charges and/or reductions in input costs as consumers are not willing to pay a premium to conserve water. Refereed/Peer-reviewed

This paper presents a hedonic property price model of rural land in a natural resource management region of the Murray-Darling Basin in Australia. In traditional hedonic models, the marginal value of environmental amenities is estimated using distance to or size of the environmental asset. The approach applied in this study offers the potential for a richer set of information, where environmental assets are described in terms of their 'recreational attractiveness'. The level of recreational attractiveness is represented as latent variables that are based on park facilities and recreational activities offered at each site. For a property in the study area that is 1 km away from the River Murray, moving half a kilometre closer will increase the property price by $245,000, holding every other variable constant at the mean. This value is magnified by $27,000 if the house is in an area where there is high river recreational attractiveness and drops by $14,000 if river recreational attractiveness is low. By including recreational quality indices in a typical hedonic framework that is corrected for spatial dependency, the model is able to capture how individuals value environmental amenities around their homes based on the site's natural characteristics as well as recreational services.

Urban communities rely on a complex network of infrastructure assets to connect them to water resources. There is considerable capital investment required to maintain, upgrade and extend this infrastructure. As the remit of a water utility is broader than just financial considerations, infrastructure investment decisions must be made in light of environmental and societal issues. One way of facilitating this is to integrate consideration of externalities into decision making processes. This paper considers the concept of externalities from an asset management perspective. A case study is provided to show the practical implications to a water utility and asset managers. A framework for the inclusion of externalities in asset management decision making is also presented. The potential for application of the framework is highlighted through a brief consideration of its key elements.

The River Murray and the Coorong in Australia have been in a state of decline. With the prospect of extended droughts and shifts in inflows due to climate change, difficult choices loom. The options include halting the decline, triage of some assets along the River or staying with the declining river system. To support decision-making, a survey was designed to elicit willingness to pay for improvements in environmental quality. Over 3000 Australians responded to this survey. The study focuses on key River Murray environmental quality indicators: the frequency of bird breeding along the River Murray, increasing native fish populations in the River Murray, increasing the area of healthy vegetation along the River Murray, and restoring water bird habitat in the Coorong. State/Territory models were jointly estimated using a panel multinomial logit error-components model. Willingness to pay estimates for improvements in environmental quality were calculated for the River Murray and the Coorong. Respondents were found to be willing to pay most for the Coorong and to improve waterbird breeding frequency. Respondents from the Australian Capital Territory were found to have significantly higher willingness to pay whereas those in Victoria had a significantly lower willingness to pay than respondents in other states.

The use of most nonmarket valuation techniques is predicated on respondents paying additional amounts of money for increased provision of a public good. However, in many circumstances this may not be appropriate. Treaty rights or the capacity of a government to raise and collect taxes in the context of a developing country may preclude the introduction of new taxes. Alternatively, there may be settings where respondents reject the notion of an additional payment and a different approach to estimating nonmarket values is needed. This article demonstrates a methodology for estimating compensating budget reallocation, which is the amount of expenditure on other public goods that respondents are willing to forego for the government to provide more of another public good. One of the main contributions of this article is a demonstration of how to improve the specification of the opportunity costs of budget reallocations. Second, using choice modelling for the estimation of budget reallocations is compared with ...

Numerous studies have been published that consider the relationship between open spaces and property values. In this study, we examine the potential impact of water restrictions on the value of different types of green space. Restrictions on the use of water on outdoor areas are a popular means for governments or utilities to limit water use in urban areas. In this paper, a hedonic pricing model is used to analyse the effects that increasingly severe water restrictions might have on the perceived value of public and private green spaces in Adelaide, South Australia. A hedonic pricing model is estimated that contains housing characteristics, neighbourhood amenities, fixed effects to control for unobserved neighbourhood characteristics and temporal control variables for inflation. The findings suggest that water restrictions are not having a significant impact of the value of outdoor spaces on private properties. There are indications that substitutions may be occurring with the proximity to playgrounds, which are watered more regularly, becoming significant with increasing severity of water restrictions. However, close proximity to large public parks with trails for walking which remain in a natural state throughout the year (brown and dry in summer) is negatively correlated with the selling price regardless of water restrictions. This suggests that households in this market may be using some public green spaces for recreation in lieu of private areas but not all public open spaces are equal. This has implications for urban and landscape planners, especially given the likelihood of ongoing water restriction under climate change. Refereed/Peer-reviewed

In this paper, we explore the use of choice modelling for obtaining implicit prices for attributes associated with changes in the reliability of household water services. While not often estimated in practice, the collection of information about willingness to accept compensation is relevant for utilities as customers often have implicit or explicit property rights for particular levels of customer service. Given ageing infrastructure in many cities, maintaining customer service standards requires large capital expenditures. It may be more economically efficient to allow standards to decline in some areas and compensate consumers. Therefore it is useful to understand the value of attributes of water service provision using willingness to accept and how this differs from willingness to pay. We therefore estimate both willingness to accept and willingness to pay measures, and find that respondents value a larger range of attributes using the willingness to accept approach.

Conservation investment in agricultural landscapes has evolved to take a more market-based or business approach. However, current levels of conservation investment are not likely to mitigate degradation to natural capital and ecosystem services. We propose the further evolution of a conservation industry to generate substantially increased investment in conservation in agricultural landscapes, particularly from the private sector. A mature conservation industry is envisaged as comprising of investors, producers, and service providers who produce conservation products and services, exchanged via market transactions. A number of requirements for a viable and effective conservation industry are identified including institutional infrastructure (conservation market institutions and regulatory systems), information provision (quantifying benefits, business models, and accounting and auditing standards), and facilitation (entrepreneurship incubation and capacity building). A conservation industry requires careful design and planning in order to operate effectively. Whilst it is not without risk, a conservation industry has the potential to increase participation and investment in conservation actions and enhance the sustainability of agricultural landscapes. Refereed/Peer-reviewed

Environmental policy makers are interested in ways to prevent environmental degradation without significantly limiting economic and social development. Increasingly, market-based instruments are being incorporated into the suite of policy tools to accomplish these aims. However, the lack of information on market-based instruments accessible to non-economists limits understanding of how and when a market-based instrument can be integrated into a traditional policy regime. This paper aims to address the lack of accessible information using a generic screening process for policy instruments demonstrated through application to a non-point source pollution problem in Lake Taupo, New Zealand. Refereed/Peer-reviewed

Ecosystem services-based approaches have been applied to decisions about trade-offs between alternative uses of land (RaudseppHearne et al. 2010; Maes et al. 2012; Bryan & Crossman 2013; Geneletti 2013; Seppelt et al. 2013), but have been used less commonly to assess trade-offs in alternative uses of water (Schluter et al. 2009; Rouquette et al. 2011; Liu et al. 2013). In this chapter we provide an overview of a case study into quantifying the ecosystem services and associated benefits (and their monetary values) of a new water-sharing plan that will return water to the environment in the Murray-Darling Basin, Australia. This serves as an illustration of how to operationalize an ecosystem services-based approach, as defined in this book. Chapter 2 in this book emphasizes that there is a gap between the conceptualization and endorsement of ecosystem services by both researchers and policy makers and the incorporation of ecosystem services-based approaches into natural resources management practice. The present chapter demonstrates the operationalization of an ecosystem services-based approach in the context of water resource planning and management. We estimate the changes to a range of final ecosystem services (Boyd & Banzhaf 2007; Kumar 2010) that result from the implementation of a discrete policy scenario, and provide economic estimates for the associated benefits. Our work contributes to the still scarce literature on real-world examples of integrating empirical data on the biophysical supply of ecosystem services with their socio-cultural context and monetary valuation to inform investment decisions (Martin-Loopez et al. 2014; see also Mulligan et al., this book). The Murray-Darling Basin contains iconic and internationally important wetlands and is Australia’s major food-producing area. In terms of gross value, about 40% of Australia’s agriculture and 50% of irrigated agriculture is produced in the Basin (Australian Bureau of Statistics 2013). However, the dominance of food production has come at the expense of other ecosystem services provided by land and water resources in the Basin, primarily due to the decline in health of river, wetland, and floodplain ecosystems (Kingsford 2000; Kingsford et al. 2011).

A series of reforms in the water industry in Australia has created a demand from the industry and regulators for objective methodologies to evaluate incremental changes in the customer service standards. In this paper, the use of choice modeling for estimating implicit prices associated with urban water supply attributes is explored. Results from multinomial logit (MNL) and random parameters logit (RPL) models show that increases in annual water bills and the frequency of future interruptions were the most important attributes. Implicit price confidence intervals based on the best models suggest that people are willing to pay positive amounts to achieve a water supply that is less frequently interrupted. The provision of alternative water supplies during an interruption and notification of the interruption were found to be unimportant to respondents. Choice modeling proved to be a useful technique and provided the industry and regulators with additional information for standard setting.

The economics of reuse water is a challenging area of economic research and policy. There are many calls to subsidise water and reuse water in order to produce food and other value-added products. However, there are many competing demands on the budgets of most governments. As an alternative to subsidies, the water charging system is re-examined and a framework of charging for water, wastewater and reuse is presented. The Australian context is used as a case study. Charges can be tailored to address specific goals and objectives and put together as a package. The charging framework presented is a pragmatic approach to charging for first-use and reuse water that incorporates the cost to the environment or what economists refer to as externalities. Externalities are often location specific and temporal in nature and as a result a charging system would need to reflect this. Regular review and updating of charges would be required. By incorporating these externalities in a charging framework for first use, reuse and disposal, these environmental costs are said to be internalised in the investment decision. The long-term outcome would be a more sustainable investment pattern that improves the benefits to society. Copyright © 2005 John Wiley & Sons, Ltd.

This paper outlines how an area-based water allocation system for irrigating crops could be converted to a system of shares, structured so as to allow the development of a low cost trading market for water and salinity shares. It stresses the need for separation of entitlements of water from land and the separation of water rights into their various components. By moving to this type of allocation system, combined with some safeguard provisions, trade in groundwater could be facilitated in the South East Water Catchment located in the State of South Australia. Separation of salinity and other environmental impacts from water volume trading will allow market assessment of highest and best use to include consideration of environmental impacts. Although the focus of the paper is on groundwater allocation and management, the principles and concepts outlined are applicable to surface water systems.

Increasingly, water agencies and utilities have an obligation to consider the broad environmental impacts associated with investments. To aid in understanding water cycle interdependencies when making urban water supply investment decisions, an ecosystem services typology was augmented with the concept of integrated water resources management. This framework is applied to stormwater harvesting in a case study catchment in Adelaide, South Australia. Results show that this methodological framework can effectively facilitate systematic consideration and quantitative assessment of broad environmental impacts of water supply investments. Five ecosystem service impacts were quantified including provision of 1) urban recreational amenity, 2) regulation of coastal water quality, 3) salinity, 4) greenhouse gas emissions, and 5) support of estuarine habitats. This study shows that ignoring broad environmental impacts can underestimate ecosystem service benefits of water supply investments by a value of up to A$1.36/kL, or three times the cost of operating and maintenance of stormwater harvesting. Rigorous assessment of the public welfare impacts of water infrastructure investments is required to guide long-term optimal water supply investment decisions. Numerous challenges remain in the quantification of broad environmental impacts of a water supply investment including a lack of peer-reviewed studies of environmental impacts, aggregation of incommensurable impacts, potential for double-counting errors, uncertainties in available impact estimates, and how to determine the most suitable quantification technique. Refereed/Peer-reviewed

We report on a grounded theory research methodology to elicit the values that underpin community leaders' advice on regional natural resource management. In-depth, semi-structured in-person interviews of 56 community leaders permitted respondents to explore their values and to elucidate some trade-offs. Furthermore, analysis of the coded transcripts provides evidence of the anthropocentric nature of values, and the importance of people, communities, and physical infrastructure. As well, the relative silence by community NRM leaders on supporting and regulating ecosystem services may reveal a lack of understanding of these functions rather than a discord in values. The tested methodology provides one approach to understanding the values of important advisory groups that are increasingly being required to guide regional agencies that implement natural resource management policy. Results indicate that, in practice, the values expressed may at times be confrontingly anthropocentric, although those interviewed also expressed existence values. Greater understanding of values is a prerequisite to the design of improved natural resource management.

This study presents results from a survey of southern Murray-Darling Basin irrigators about the percentage of funds they would allocate towards a variety of current and hypothetical trade-off choices for recovering environmental water. The findings, allowing for state-based differentials, suggest irrigators marginally prefer infrastructure expenditure above the sum of a set of market-based options (namely water entitlement purchasing, temporary water market products and exit-based packages). However, their infrastructure preference weighting is less than current budget expenditure, and use of market-based options has higher support from irrigators than current policy recognises. Further, analysis of past and current infrastructure and market-based water recovery expenditures reveals large price-per-megalitre disparities, which may be explained by diminishing marginal returns. Targeting expenditure in line with preferences of irrigators may result in increases in economic efficiency. Refereed/Peer-reviewed

Refereed/Peer-reviewed

Whilst biophysical, and increasingly economic, values are often used to define high priority hotspots in planning for conservation and environmental management, community values are rarely considered. The community values mapping method presented in this paper builds on the concept of natural capital and ecosystem services and the landscape values methodology to link local perception of place to a broader measure of environmental values at the landscape level. Based on in-depth interviews and a mapping task conducted with 56 natural resource management decision-makers and community representatives, we quantified and mapped values and threats to natural capital assets and ecosystem services in the South Australian Murray–Darling Basin region. GIS-based techniques were used to map the spatial distribution of natural capital and ecosystem service values and threats over the region and analyse the proportional differences at the sub-regional scale. Participants assigned the highest natural capital asset value to water and biota assets primarily for the production of cultural, regulating and provisioning services. The most highly valued ecosystem services were recreation and tourism, bequest, intrinsic and existence, fresh water provision, water regulation and food provision. Participants assigned the highest threat to regulating services associated with water and land assets. Natural capital asset and ecosystem service values varied at both sub-regional and place-specific scales. Respondents believed people were integral to the environment but also posed a high threat to natural capital and ecosystem services. The results have implications for the way values toward natural capital and ecosystem services may be integrated into planning for environmental management. Refereed/Peer-reviewed

Market-based instruments are policies that rely on price signals as incentives to encourage private actions with public environmental benefits. They are becoming increasingly popular worldwide as instruments of natural resource management. Experience suggests that success of such policies can critically depend on design detail and that these design challenges are especially significant for diffuse source environmental issues. This article describes a process for the ex ante design of market-based approaches for diffuse source environmental issues that involves: (1) identifying potential impediments to efficient functioning of the market mechanisms, (2) qualitatively evaluating the potential significance of identified impediments given case-study-specific context, and (3) consideration of policy design features to overcome high-priority impediments. An Australian case study is described where the developed methodology was applied to the design of a credit trade policy to reduce the salinity consequences of drainage, a result of prevailing agricultural practice. Refereed/Peer-reviewed

This paper describes a comprehensive method to design, test and then implement a Payments for Ecosystem Services (PES) framework to combat the environmental consequences of extensive native vegetation clearance in Australia. Clearing of vegetation, primarily due to the expansion of farming areas, has often resulted in regional dryland and irrigation salinity. The market based approach adopted ? a groundwater recharge credit trading scheme ? was designed using empirical data from a social survey and experimental economics. The objective of the trial is to test the cost effectiveness of an incentive based recharge credit trade scheme designed to engage landholders in establishing and managing deep rooted pasture and woody perennials to reduce these adverse salinity impacts. The scheme, based on a voluntary ?cap and trade? approach, allows farmers to meet recharge obligations by land management actions or by trading credits. Assessment of the scheme so far suggests that an incentive for aggregate group outcome achievement included in the design may have motivated higher enrollment rates than would have otherwise resulted. A schedule has been developed relating land management practices and recharge credits. The audited performance based payment system, has provided increased motivation to manage for environmental outcomes compared to the previous policy.

Economics and the Future tackles the discounting issue from a number of angles, ranging from relatively short-term private financial decisions, to very long-term public issues spanning generations. The authors present differing perspectives and original ideas in a style that remains accessible while addressing some of the more difficult questions about discounting in theory and practice. It reveals that the economic issues regarding time are embedded in a broader social, ethical and philosophical context.

Agricultural abandonment reflects a post war trend in western Europe of rural depopulation to which isolated and poorer areas are most vulnerable. The commercialisation of agriculture, through technological developments, and the influence of Common Agricultural Policy have increased productivity and focused agricultural activity on more fertile and accessible land thus transforming traditional approaches to farming. In many areas this has lead to a decline in traditional labour intensive practices and marginal agricultural land is being abandoned. The problems that these trends create are particularly marked in mountain areas. The social and economic impacts of these changes have been well documented. However, the implications for environmental policy are less well recognised. This paper reviews the literature on abandonment and gives a comparative analysis of European mountain case studies to assess the environmental impacts of land abandonment and decline in traditional farming practices. It finds abandonment is widespread and that, while the influence of environmental changes is unpredictable due to environmental, agricultural and socio-economic contextual factors, abandonment generally has an undesirable effect on the environmental parameters examined. The application of agri-environment policy measures in relation to abandonment is discussed and suggestions for future policy are proposed.

specified characteristic of the houses in question, Pi= i=l ... n is az.' interpreted as the marginal implicit value of each specified characteristic, and e is a random error term. In the analysis reported here, it is assumed that within the relatively shortterm period analyzed, buyers' demand for housing attributes is stable and the supply of the range of single family housing and associated attributes is fixed, thus abstracting from the potential problem of identification that may affect estimation of the demand for attributes (Rosen 1974; Epple 1987).2 A random sample of 60 single family homes which had sold in Edmonton, Alberta in March 1993 was drawn from the Edmonton Real Estate Board's

Despite the focus by stakeholders, the States and the Murray-Darling Basin Authority on exploring the economic costs and benefits of the proposed Murray-Darling Basin Plan, there are a number of issues relevant to an economic evaluation of the Plan that are easily overlooked. While a proposed Murray-Darling Basin plan has been released, water sharing agreements will continue to evolve and much detail remains to be worked out as part of implementation at the state level. Given this, we seek to synthesise current research on the costs and benefits of the Murray-Darling Basin plan. In doing so we discuss eight issues relevant to understanding the net-benefits of water reforms that, though recognised in the literature and policy debates, have become somewhat peripheral despite their potential importance. The first two issues are related to the potential social costs associated with reduced viability of communities and ongoing viability issues for farms. The next three issues are focused on benefits from the proposed Plan. This includes the estimation of benefits for downstream beneficiaries, the opportunity provided to farmers from selling water and the benefits associated with reductions in system risk due to non-incremental changes in ecosystems. The remaining three issues relate to approaches for maximising the benefits associated with the water reform process. This includes the evaluation of a wider range of options, consideration of how to better use water markets to assist farmers to manage risk, and evaluating not only how much water is needed but how it can be more effectively managed.