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Economic cost of environmental flows in an unregulated river system* |
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| Authors: | Randall Jones Jason Crean Parakrama Aluwihare Rebecca Letcher |
| Institution: | 1. NSW Department of Primary Industries, Orange;2. Sydney University, Orange Campus;3. School of Resources, Environment and Society, the Australian National University
Randall Jones (email: randall.jones@dpi.nsw.gov.au) is Senior Research Scientist with NSW Department of Primary Industries, Orange, Jason Crean is a PhD student at Sydney University, Orange Campus, Parakrama Aluwihare is formerly an Economist with NSW Department of Primary Industries, Orange and Rebecca Letcher is a Research Fellow with School of Resources, Environment and Society, the Australian National University. |
| Abstract: | This paper applies a stochastic dynamic programming framework, incorporating links to hydrological and biophysical models, to assess the economic costs of environmental flows in an unregulated river system in the Namoi Valley of northern New South Wales, Australia. Structural adjustment decisions are included in the model to account for farmer responses to changes in environmental flows through the introduction of a water sharing plan. The results of the analysis indicate that the proposed level of environmental flows reduces water extractions by around 6 per cent, and imposes an opportunity cost of less than 1 per cent in terms of reduced net income over a 20-year period. |
| Keywords: | dynamic programming environmental flows irrigation |