Demand for Water Use by New Tree Plantations and Downstream Economic, Social and Environmental Interests
In Webb AA, et al. (Eds). Revisiting Experimental Catchment Studies in Forest Hydrology. International Association of Hydrological Sciences (IAHS) Publication 353, IAHS Press, Wallingford, UK. ISBN 978-1-907161-31-5. pp 217-232
15 Pages Posted: 24 Sep 2012 Last revised: 16 Feb 2016
Date Written: 2012
New tree plantations in upland watersheds may directly displace other land uses such as perennial or annual pastures or cropping on arable land, affecting both water yields (W) and river salt loads (S). Our “factorial vector analysis” describes the envelope of possible changes in long run W,S combinations. Economic analyses find least-cost changes in land uses to attain particular W,S targets from a watershed. Changes alter watershed net present value as direct and opportunity costs are subtracted from earning prospects of new tree plantations given stumpage values ($40, $50, $60 and $70/m3) to determine their marginal values of water. Water use distributions are projected under two regulatory settings: (1) where no downstream water entitlements need be purchased, and (2) where the latter are required for new plantations. Economic balances are projected with initial supply of water entitlements held by downstream irrigators, stock and domestic interests and wetland environmental areas.
Keywords: evapotranspiration, interception, watershed, rivers, groundwater, salinity, environmental services, water entitlement, downstream externality, market, economic surplus, urban water, irrigation, wetlands, Murray-Darling Basin, Australia
JEL Classification: Q150, Q180
Suggested Citation: Suggested Citation