Marit E. Kragt

An integrated approach to linking economic valuation and catchment modelling

An increased emphasis on integrated water management at a catchment scale has led to the development of numerous modelling tools. To support efficient decision making and to better target investment in management actions, such modelling tools need to link socioeconomic information with biophysical data. However, there is still limited experience in developing catchment models that consider environmental changes and economic values in a single framework. We describe a model development process where biophysical modelling is integrated with economic information on the non-market environmental costs and benefits of catchment management changes for a study of the George catchment in northeast Tasmania, Australia. An integrated assessment approach and Bayesian network modelling techniques were used to integrate knowledge about hydrological, ecological and economic systems. Rather than coupling existing information and models, synchronous data collection and model development ensured tailored information exchange between the different components. The approach is largely transferable to the development of integrated hydro-economic models in other river catchments. Our experiences highlight the challenges in synchronizing economic and scientific modelling. These include the selection of common attributes and definition of their levels suitable for the catchment modelling and economic valuation. The lessons from the model development process are useful for future studies that aim to integrate scientific and economic knowledge.

Effects of Great Barrier Reef degradation on recreational reef-trip demand: a contingent behaviour approach

There is a growing concern that increased nutrient and sediment runoff from river catchments are a potential source of coral reef degradation. Degradation of reefs may affect the number of tourists visiting the reef and, consequently, the economic sectors that rely on healthy reefs for their income generation. This study uses a contingent behaviour approach to estimate the effect of reef degradation on demand for recreational dive and snorkel trips, for a case study of the Great Barrier Reef in Australia. Results from a negative binomial random effects panel model show that the consumer surplus current reef visitors derive from a diving or snorkelling trip is approximately A

Using Choice Experiments to Value Catchment and Estuary Health in Tasmania with Individual Preference Heterogeneity

185 per trip. Furthermore, results indicate that reef trips by divers and snorkellers could go down by as much as 80 per cent given a hypothetical decrease in coral and fish biodiversity. This corresponds to a decrease in tourism expenditure by divers and snorkellers on full-day reef trips in the Cairns management area of the Great Barrier Reef Marine Park of about A

Modellers' roles in structuring integrative research projects

103 million per year.

Dynamics and the economics of carbon sequestration: common oversights and their implications

Choice experiments (CE) have become widespread as an approach to environmental valuation in both Australia and overseas. However, there are few valuation studies that have addressed natural resource management (NRM) changes in Tasmania. Furthermore, few studies have focussed on the estimation of estuary values. The CE study described in this paper aims to analyse community preferences for NRM options in the George catchment, Tasmania. Catchment health attributes were: the length of native riverside vegetation; the number of rare native animal and plant species in the George catchment; and area of healthy seagrass beds in the Georges Bay, which was used as a measure of estuary condition. Mixed logit models with interactions between socio-economic variables and the choice attributes were estimated to account for systematic and random taste heterogeneity across respondents. Results reveal considerable variation in preferences towards the attributes and show that value estimates are significantly impacted by the way in which we account for preference heterogeneity. Preference heterogeneity thus needs to be considered when estimating community willingness-to-pay for environmental changes. This study further shows little responsiveness to the presented changes in estuary seagrass area.

Accounting for Nonmarket Impacts in a Benefit-Cost Analysis of Underground Coal Mining in New South Wales, Australia

Effective management of environmental systems involves assessment of multiple (physical, ecological, and socio-economic) issues, and often requires new research that spans multiple disciplines. Such integrative research across knowledge domains faces numerous theoretical and practical challenges. In this paper, we discuss how environmental modelling can overcome many of these challenges, and how models can provide a framework for successful integrative research. Integrative environmental modellers adopt various roles in integrative projects such as: technical specialist, knowledge broker, and facilitator. A model can act as a shared project goal, while the model development process provides a coordinated framework to integrate multi-disciplinary inputs. Modellers often have a broad generalist understanding of environmental systems. Their overarching perspective means that modellers are well-placed to facilitate integrative research processes. We discuss the challenges of interdisciplinary academic research, and provide a framework through which environmental modellers can play a role in guiding more successful integrative research programmes. A key feature of this approach is that environmental modellers are actively engaged in the research programme from the beginning-modelling is not simply an exercise in drawing together existing disciplinary knowledge, but acts as a guiding structure for new (cross-disciplinary) knowledge creation.

Estimating shadow price for symbiotic nitrogen and technical efficiency for legume‐based conservation agriculture in Malawi

Accurate assessment of the cost of carbon sequestration is important for the development of mitigation policies globally. Given that sequestration in soils or vegetation is a lengthy process, such assessment requires financial discounting and making realistic assumptions about changes over time in the rate of sequestration, the price of carbon, and the opportunity cost incurred by adopting sequestration practices. Our objective is to demonstrate how these assumptions affect estimates of the cost of sequestration-based mitigation strategies. Using an Australian case study of soil carbon sequestration, our estimates of the carbon price required for financial viability are highly sensitive to dynamic assumptions, varying by a factor of four with different assumptions. Yet the influence of these time-related assumptions is poorly acknowledged in the literature, with many studies either failing to disclose their assumptions, or employing questionable assumptions and methods. Recommended global strategies are for researchers to report their assumptions related to dynamics much more transparently and to improve their research methods and the realism of their assumptions when analysing the economics of carbon sequestration. We recommend that policymakers become better aware of the issues created by dynamics, so that they are able to validly interpret assessments of the cost of sequestration and to ensure that they design policies in a way that facilitates fair comparison of the costs of mitigation strategies that operate over different timescales.

Spatial and Scope Effects: Valuations of Coastal Management Practices

Strategic inquiries into coal mining by Australian Governments advocate increased use of comprehensive benefit cost analyses and nonmarket valuation studies when assessing individual project proposals. The study reported in this paper addresses these Government concerns, by integrating results of a choice experiment into a benefit cost analysis undertaken for a Colliery in the Southern Coalfield of New South Wales, Australia. Results of the study were used to aid the State government in evaluating proposals for continued underground coal mining. We show that impacts of mine subsidence on streams, swamps, and Aboriginal sites negatively affect community wellbeing. Social welfare increases with the length of time that the mine provides direct employment. We demonstrate how implicit price estimates from the choice experiment can be incorporated into a benefit cost analysis of continued mining. Benefit cost analyses were carried out for a range of policy scenarios—including policies that would restrict mining activities at the Colliery and protect environmental and cultural features in the Southern Coalfield. Notwithstanding the environmental impacts generated by mining operations, continued mining is shown to be a more economically efficient course of action.

Greenhouse gas abatement costs are heterogeneous between Australian grain farms

Determining the value of legumes as soil fertility amendments can be challenging, yet this information is required to guide public policy and to incentivise prescribed land-management practices such as conservation agriculture. We use a directional input distance function (DIDF) to estimate shadow prices for symbiotic nitrogen and the technical efficiency for mixed maize-legume production systems in Malawi. The shadow prices reflect the trade-off between fertiliser nitrogen and symbiotic nitrogen required to achieve a given quantity of output. Our results reveal considerable technical inefficiency in the production system. The estimated shadow prices vary across farms and are, on average, higher than the reference price for commercial nitrogen. The results suggest that it would be beneficial to redesign the current price-support programs that subsidise chemical fertilisers and indirectly crowd-out organic soil amendments such as legumes.

Modelling with stakeholders - Next generation

We explore how values for environmental management in the Kimberley region of Australia respond to changes in spatial scale and attribute scope. A discrete choice experiment was conducted that included the impacts of management on marine no‐take areas, Aboriginal rangers, recreational facilities, and coastal development. A split sample single‐site design was used to estimate values for the Kimberley region as a whole, and for two separate smaller sub‐regions, allowing us to test for spatial preference heterogeneity. Management outcomes for different regions were displayed on a map to show respondents explicitly where outcomes would occur. We show that willingness to pay results are similar between the two smaller sub‐regions, and that willingness to pay for the attributes increased when management occurred at the larger geographical scale. However, respondents were somewhat insensitive to changes in the scope of the two cardinal attributes: area of no‐take and number of rangers. We discuss the implications of this spatial and scope insensitivity for choice experiment research.