Demand for water use by new tree plantations and downstream economic, social and environmental interests

New tree plantations in upland watersheds may directly displace other land uses such asperennial or annual pastures or cropping on arable land, affecting both water yields (W) and river saltloads (S). Our 'factorial vector analysis' describes the envelope of possible changes in long run W,Scombinations. Economic analyses find least-cost changes in land uses to attain particular W,S targetsfrom a watershed. Changes alter watershed net present value as direct and opportunity costs aresubtracted 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 tworegulatory settings: (1) where no downstream water entitlements need be purchased, and (2) where thelatter are required for new plantations. Economic balances are projected with initial supply of waterentitlements held by downstream irrigators, stock and domestic interests and wetland environmental areas.