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The NSW Cap & Pipe the Bores Program is a jointly funded Commonwealth and State initiative that operates within the Australian Government’s Great Artesian Basin Sustainability Initiative (GABSI) framework. The third five-year period of GABSI was due to commence on 1st July 2009. This economic study of changes in landholder water management under the Cap & Pipe the Bores program was undertaken to inform the development of GABSI phase 3 policy in NSW. The study consisted of a small number of case studies of farming enterprises across the Great Artesian Basin Groundwater Management Zones of Surat South, Surat East, Surat West, Warrego and Central in NSW. The apparent landholder economic feasibility of the program was dependent on individual farm characteristics as much as location to the bore and geographic location within the GAB.

The NSW Cap & Pipe the Bores Program is a jointly funded Commonwealth and State initiative that operates within the Australian Government's Great Artesian Basin Sustainability Initiative framework. Under the Water Sharing Plan for the NSW Great Artesian Basin Groundwater Sources 2008, 70 per cent of the water savings made since 1999 shall be retained in the aquifers of the Basin to improve pressures and provide for groundwater dependent ecosystems. The remaining 30 per cent of the water savings may be released to extractive users over the term of the Water Sharing Plan to facilitate the continued economic and social welfare of regional western NSW. As the first step in this water release, part of the water savings from the Cap & Pipe the Bores program were auctioned in July 2009 in the western NSW town of Walgett. All lots offered at auction were sold. The study reviews the pre auction analysis of demand, and outlines the auction process and outcomes as well as the implications for future water sales. The outcomes of the auction will inform ongoing water allocation policy.

The Catchment Management Authorities in New South Wales have programs that are collectively investing $436 million over four years to achieve catchment-wide natural resource/environmental improvements. In this paper, we consider the question of how to best allocate these resources so as to increase the well-being of the public within catchments and the state. We consider the current approaches used by CMAs and make a case for Benefit-Cost Analysis as an alternative means of assessing ex ante questions of priority setting at the catchment level and for project appraisal. A major issue for BCA is the estimation of potential benefits from project investments, particularly the estimation of values that catchment communities and those living outside the catchments place on the non-use benefits associated with environmental improvements. We discuss alternative means of eliciting such values and propose the stated-preference method of Choice Modelling as a means of overcoming this Benefit-Cost Analysis shortcoming, because it incorporates advances in non-market valuation.

We describe a landscape scale non-linear discrete choice spatial optimisation model for identifying cost-effective strategies for achieving environmental goals. Spatial heterogeneity and configuration issues such as fencing costs, patch sizes and network linkages are explicitly accounted for and quasi-optimal allocations are determined using simulated annealing. Applications of the model being developed with New South Wales Catchment Management Authorities are discussed. These focus on targeting investments in revegetation to control dryland salinity and erosion and provide biodiversity benefits whilst minimising direct and opportunity costs. We compare our approach with alternate investment approaches.

Natural resource management decision making by Catchment Management Authorities in NSW is being aided by a project involving bio-physical modelling and the development of an alternative decision-making framework. The objective of the bio-physical modelling process is to generate predictions of environmental or natural resource outcomes rather than project outputs. These outcomes can then be used in an investment framework to help priority setting and project decision making. Questions that arise in bio-physical modelling include those relating to scale and scope. Scale issues include how to address the landscape impacts of particular (or a series of local) on-ground works proposals. Scope issues include assessment of multiple-attribute responses to particular changes. In a multi-disciplinary context the challenge is then to translate this information into units that can be adapted to a decision-support framework. Existing Catchment Management Authorities decisions are often based on scoring and weighting of environmental improvements using an environmental benefits index, however other economic frameworks are possible. We discuss the important context for these questions in the decision making framework.

This study reviewed case studies and research focussed on the issues of managing native vegetation, the problems of salinity and the relationship between the two. It then addressed the economic feasibility of six tree planting configurations to reduce the impacts of salinity. The method used a spreadsheet model showing the benefits and costs of various planting configurations over a 30-year time span. This model can be used to assess the monetary net benefit/costs of reducing recharge of a vegetation management proposal. Inputs can be varied to tailor the model to different catchments. Even when applied to local groundwater systems, the impact on salinity in terms of land salinised, salt loads and dollars was small. These factors can represent major impediments to the implementation of tree planting and vegetation regeneration.

Efficient management of water in unregulated river systems is essential in meeting current and future needs of water users and the environment. As an integral part of the new water management process, volumetric conversions convert current area based licences into volume based licences. Hydrology modelling determines the Daily Extraction Limits for different flow conditions in each management rule proposed for meeting environmental objectives in the catchment. The case study is the Adelong Creek Catchment, an unregulated river catchment in southeastern New South Wales. Economic and hydrological modelling assesses the impacts of proposed extraction rules, designed to meet environmental flow objectives, on water availability in the catchment. A spreadsheet based optimisation model was developed to assess the impacts of different flow management rules on the regional agricultural economy. The suitability of this approach will be assessed for application to other unregulated stream catchments.

This paper outlines the impacts of ignoring the costs to the community of increased rural waterlogging and salinity. It identifies the cost of no further action, and the costs and benefits of undertaking a land and water management plan. The processes of developing and evaluating the plan are explained. Difficulties in obtaining data, both for the community and the economist, are discussed. Data availability then shapes the range of costs and benefits that can be evaluated. The paper looks at the process and results of a case study of a Land and Water Management Plan for an irrigation district in central New South Wales. The case study demonstrated all the complexities of community and professional conflict, difficulties in data availability, budget and time constraints and a rigorous review process. Also discussed are the implications of recommendations of this Land and Water Management Plan Economic Evaluation for the community and government.

Multicriteria analysi, wetlands, economics