think climate. think change.
Department of Climate Change
Funded by the Australian Greenhouse Office and managed by the Northern Territory Department of Infrastructure, Planning and Environment, November 2003
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This report details the methodology and results of an economic cost-benefit evaluation of salinity mitigation options for the Mary River in the Northern Territory of Australia. The analysis provides a benchmark methodology for future cost-benefit evaluations of projects involving environmental change, and will provide a guide for evaluating options to protect against sea-level rise.
The Mary River floodplain is an important part of the network of over 10,000 km2 of coastal freshwater wetlands in the Northern Territory. These are the only remaining significant areas of wetland in Australia unaffected by water extraction or other intensive agricultural development (Whitehead,Wilson and Bowman 1990, p. 85; Whitehead and Saalfeld 2000, p. 496). The Mary River wetlands are unique, in that the river system has a much smaller outlet to the sea than the other Northern Territory wetlands,with the possible exception of the Arafura swamp. This results in a much larger area of inundation from rainfall, and extended retention of fresh water throughout the driest part of the year. This unique habitat is a highly productive ecosystem and has resulted in a disproportionately large contribution to the Territory’s magpie geese, barramundi, threadfin salmon and snapper yields compared with other areas, as well as providing a unique opportunity in the Territory for fattening cattle into the late dry season. Crocodile populations are amongst the densest in the Northern Territory, if not the world (Webb 1987, quoted in Whitehead 1996). The high productivity and biological diversity also attracts a growing number of tourists each year. The Mary floodplain does not contain any particular unique species or biodiversity, but the quantum and richness of its biota gives the Mary a special value.
However, this ecosystem is significantly affected by saline intrusion, which began in the 1940s and accelerated in the 1980s to inundate approximately 240 km2 of the wetland system.
Works to mitigate saline intrusions, including the construction of a network of earthen barrages, have been applied in the Mary River system since the 1980s. Satellite monitoring, showing the recovery of areas of melaleuca forest and other vegetation, indicates that these mitigation actions have been effective. However, a need to determine whether this mitigation action delivered value was recognised. Discussions between the NT Greenhouse Unit (NTGU) and the Australian Greenhouse Office (AGO) revealed that a cost-benefit evaluation of the mitigation action would not only help determine the worthiness of the mitigation action, but also illustrate a means of assessing proposals that would result in adaptation to a changing climate. This analysis would be especially useful where risks involve the loss of intangible value from environmental change.
This study has been designed to deliver both an evaluation of the particular mitigation strategies in the Mary River Basin, and a benchmark methodology that could be applied in future climate adaptation studies. The methodology that has been applied is consistent with Commonwealth Department of Finance Guidelines and evaluates a range of feasible options for salinity mitigation by:
The analysis is based upon a clear understanding of the scientific uncertainties and the risks associated with valuing intangibles. For this reason, the approach taken placed emphasis on the strength of the conclusions that can be drawn on the ranking of the more promising options and as to whether benefits exceed costs, rather than on delivering highly precise estimates of benefits and costs.
This approach can reduce the costs of a sound assessment, or improve the tractability of the analysis - and also recognises the complexities and subjectivity inherent in quantifying many intangible effects.
For the purposes of illustrating the cost-benefit analysis and its possible application for assessing options for adaptation to climate change, this study evaluated four feasible options to address salinisation in the Mary River catchment:
1. Base Case - Letting nature take its course by abandoning any further mitigation investment. Under this scenario there would be a rapid increase in salinised land, with a reduction in agricultural,wild harvest and tourism activity.
This option was compared with three rehabilitation options:
2. Band-aid - Completing the basic network of small barrages, stabilising these with spillways to deal with their vulnerability to wet season flows and maintaining them over time. This option would most likely result in maintaining the existing area of freshwater wetlands, but no retrieval of previously lost areas.
3. Two Chokes - Reducing the strength of tidal flows and therefore limiting salinisation by choking the two main channels, Sampan and Tommycut, with submerged weirs constructed from geotextile bags filled with mud. The existing small barrages would be maintained. This option has a higher capital cost than the previous option. Retrieval of some lost freshwater wetlands is likely with this approach.
4. Two Coastal Barriers - A notional option based on previous research suggesting that there may be options to use barriers at the creek mouths or offshore to reduce tidal flows and slow the salinisation process. Although this option is not feasible at this time, it allows consideration of a more expensive project that might allow retrieval of the same area of freshwater wetlands, as in Option 3 but within a shorter timeframe.
The study results indicate that:
The study illustrates the use of an economic methodology for assessing options aimed at the protection and recovery of natural systems in a current situation. This methodology could also be applied in assessing adaptation options to possible future climate change scenarios.
In particular, the study demonstrates techniques for using existing Northern Territory tourist data for valuation of the effect of environmental changes on the economic benefits of tourism. In addition, the review of non-use valuation studies shows how survey techniques or data from surveys can be applied to achieve, at a minimum, a coarse valuation of nonuse aspects of environmental change.
This economic methodology may therefore have application to other studies, including those related to agriculture and natural resource systems in the Northern Territory or more generally.
