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The Modelling the Uptake of Water Conservation and Efficiency Measures in Sydney report team worked with Sydney Water’s WaterFix Program to validate their agent based, decision-making model aimed at encouraging consumers to participate in water saving programs.Customer behaviour plus the development and adoption of water efficient appliances were identified as the two biggest uncertainties in estimating long-term demand for water. The team used data from the WaterFix program collected during the Millennium Drought (2001-2009) and applied it to their model, replicating Sydney householder decision-making at the time. The modelling is hoped to contribute to future water supply resilience for Sydney at a time of declining dam inflows and increasing population.The project has demonstrated the benefits of Agent-based Model (ABM) in understanding the implications of different policy setting in increasing the adoption of water conservation actions. In comparison to more traditional water demand models, the ABM can explore system leverage points and scenarios, as well as describing the complex behavioural responses across the community. The ABM approach is not as data intensive as other water demand modelling approaches so it can allow for rapid prototyping to assess water conservation policy options.The approach demonstrated in this project can provide a useful approach for the water sector in targeting investment in their water conservation programs by improving institutional capacity to evaluate likely impacts of different policy options. The emergence of big data, from the widespread uptake of smart meters and the ‘internet-of-things’, creates an opportunity to develop ABMs that simulate individual responses to water conservation programs.

The efficient and sustainable use of water is becoming standard practice in water scarce regions and pro-active policy initiatives are taken to increase supply reliability considering the local context. The aim of this paper is to evaluate farmers’ acceptance of policy strategies to increase water supply reliability in a water scarce river basin in the south east of Spain. Results from a choice experiment study suggest that farmers are willing to pay double water prices to ensure water supply reliability, through government supply guaranteed programs. However, they are averse to any other institutional changes that could assist the government to achieve increased water supply.

Changing land-ownership patterns transform many rural landscapes from agricultural to multifunctional, which may have significant implications for land management and conservation policy. This paper presents a hedonic pricing model that quantifies the value of the remnant native vegetation captured by owners of rural lifestyle properties in rural Victoria, Australia. Remnant native vegetation has a positive but diminishing marginal implicit price. The value of lifestyle properties is maximized when their proportion of area occupied by native vegetation is about 40%. Most lifestyle landowners would receive benefits from increasing the area of native vegetation on their land. Findings from this study will be used to support decisions about ecological restoration on private lands in fragmented agriculture-dominated landscapes.

Up to 60 per cent of potable water supplied to Perth, Western Australia, is extracted from the groundwater system that lies below the northern part of the metropolitan area. Many of the urban wetlands are groundwater-dependent and excessive groundwater extraction and climate change have resulted in a decline in water levels in the wetlands. In order to inform decisions on conserving existing urban wetlands, it is beneficial to be able to estimate the economic value of the urban wetlands. Applying the Hedonic Property Price approach to value urban wetlands, we found that distance to the nearest wetland and the number of wetlands within 1.5 km of a property significantly influence house sales price. For a property that is 943 m away from the nearest wetland, which is the average distance to the wetland in this study, reducing the wetland distance by 1 m will increase the property price by AU$42.40. Similarly, the existence of an additional wetland within 1.5 km of the property will increase the sales price by AU$6976. For a randomly selected wetland, assuming a 20 ha isolated circular wetland surrounded by uniform density housing, the total sales premium to surrounding properties was estimated to be around AU$140 million (AU$40 million and AU$230 million).

This paper explores the concept of agricultural resilience in the context of climate change related water scarcity. Specifically, the impact of water scarcity on agricultural production is analyzed to derive the timing of exit decisions for farmers faced with the prospect of declining profitability in agriculture but increasing benefits from land rezoning in future. The prospects of land rezoning are modeled as a poison process which may or may not be influenced by farmer’s water abstraction decisions. Selling out of agriculture before land rezoning has an impatience cost as the farmer does not gain the maximum speculative rewards. The analysis highlights the role of such speculative rewards in making farmers resilient to declining profitability in agriculture and also identifies the circumstances under which the water prices may be an ineffective policy tool for allocating water. An empirical application is performed using the above model for the case of a drought prone region in Western Australia.

Up to 60% of potable water supplied to Perth in Western Australia is extracted from the Gnangara mound. Many of the urban wetlands above the Mound are groundwater-dependent. Excessive groundwater extraction and climate change have resulted in a decline in water levels in the wetlands. This study estimates the value of urban wetlands in three local government districts in the Perth metropolitan region using the hedonic property price approach. Preliminary results found that proximity to wetlands influences the sales prices of properties. The marginal implicit price of reducing the distance to the nearest wetland by 1 metre, evaluated at the mean sales value, is AU$463. If there is more than one wetland within 1.5 kilometres of a property, the second wetland will help increase the property price by AU$6,081. For a 50 ha wetland, we estimate the total premium of on sales due to wetland proximity is AU$220 million, based on average property characteristics and medium house density. These results will help inform policy makers and land developers on the value of conserving existing urban wetlands, creating new wetland areas and urbanising rural wetlands.

Outdoor water restrictions are usually implemented as bans on a particular type of watering technology (sprinklers), which allow households to substitute for labour-intensive (hand-held) watering. This paper presents a household production model approach to analysing the impact of sprinkler restrictions on consumer welfare and their efficacy as a demand management tool. Central to our empirical analysis is an experimentally derived production function which describes the relationship between irrigation and lawn quality. We demonstrate that for a typical consumer complete sprinkler bans may be little more effective than milder restrictions policies, but are substantially more costly to the household.