Complex but rewarding: putting a value on the Murray-Darling plan

Money isn’t the only way of measuring the Murray-Darling’s environmental benefits, but it’s a useful one. CSIRO

One of the big challenges around the Murray-Darling Basin Authority’s Proposed Basin Plan is to work out just how much the basin’s environment would benefit from the plan.

When the Guide to the proposed Basin Plan was released in 2010 there was plenty of information to fuel debate about the costs to irrigated agriculture and communities of reduced water use. However, there was less information on the benefits to Australia of returning river environments to a healthier state.

CSIRO was commissioned by MDBA in June 2011 to lead a study of the environmental benefits to Australia that may arise from implementing the proposed plan and, where possible, to place a monetary value on these benefits.

Our research showed that the increased water likely to be delivered under the proposed plan could provide substantial, life-giving benefits to red gum forests and other vegetation communities on the lower floodplains. The higher floodplains of red gum and black box woodlands would receive less water due to channel capacity constraints, flooding of private land and roads, and the limits of dam releases.

CSIRO

Fish such as Macquarie perch, golden perch and silver perch which use the floodplain wetlands benefit most from the increased water, whereas those that spawn during low flows in the main river channel may benefit less. The returned water will provide more minor breeding events for water birds, which should help sustain populations, but the major bird breeding events across south-eastern Australia are triggered only by the occasional major floods.

People living in the basin will also benefit from these healthier river environments. Improvements to water quality, healthy red gum forests, full lakes and increased numbers of native fish and water birds are highly valued by society.

In an economic sense, a healthy river environment in the Murray-Darling basin provides a set of services and human benefits that have been valued for the first time. If the environment has better water quality, water treatment costs may be reduced; so the economic value of this ecosystem service to society is the amount of avoided water-treatment costs.

Healthy natural environments also have high value to many Australians just because they exist and will leave a cherished legacy to future generations, recognising that they also contribute to wellbeing through a strong sense of being part of a thriving landscape. These social values can be quantified by carefully designed surveys of people’s willingness to pay to ensure healthier environments.

CSIRO

Overall, these benefits were valued by CSIRO at between $3 billion and $8 billion in 2010 dollars, although the value is undoubtedly significantly higher as not all environmental benefits could be given a monetary value.

The largest monetised benefits come from the improved ecosystem services to the Murray River, Lower Lakes and Coorong. Carbon sequestration from healthier forests across the river ecosystems is also worth hundreds of millions of dollars, although not in a way that is presently realisable through carbon trading.

These estimates of monetary value will be useful in the economic cost and benefit analysis that the MDBA is required to undertake when evaluating the Proposed Basin Plan. They will also play a valuable role in informing community discussion about the trade-offs that need to be made between the economy, communities and the environment if current water sharing arrangements are changed in line with the proposed plan.

The monetary value is expressed as a range because of the difficulty of converting broad descriptions of ecosystem states to a more precise figure.

While it is clear that the ecosystem benefits to Australia as a whole are worth multiple billions of dollars in the event the Proposed Basin Plan were implemented, it is important to appreciate that not everyone views money as the measure of environmental value.

The deep spiritual significance of riverine ecosystems to Indigenous communities, for example, cannot be meaningfully expressed in monetary terms. Other people place a high aesthetic value on a healthy environment, and it is these types of non-monetary values that make the task of delivering a sustainable future for the basin all the more challenging.

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