Supply and Demand for Water Use by New Forest Plantations, Invited Paper

Thomas Nordblom, J.D. Finlayson, Iain Hume

Research output: Book chapter/Published conference paperConference paperpeer-review

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Abstract

The evolution in understanding sources of river water and the roles of different vegetative land covers, such as annual crops, perennial pastures and tree plantations, intercepting and using rain water before it reaches rivers, is briefly reviewed. Plantations are nowrecognised as the greatest water users per unit of area and have been employed strategicallyto dry out water sources causing salinity problems. The paper estimates the economicdemand for water by future upstream plantations in six watersheds with different meanannual rainfalls and locations with respect to downstream water users in the MacquarieRiver Catchment, New South Wales, given different tree product values ($40, $50, $60 and $70/m3) and the direct and opportunity costs of establishment. The aggregate supply ofwater is posited in terms of marginal values to each of several downstream sectors and theirinitial holdings of all water entitlements on the river. The impacts of water demand for newtree planting are examined at each tree product value under each of two settings: withoutand with the requirement that permanent water entitlements must be purchased beforeestablishing a plantation. Sector by sector predictions of changes in water use, new tree plantation areas, and economic surpluses are quantified for each of the eight combinationsof conditions.
Original languageEnglish
Title of host publicationEconomics and Environment Network Symposium 2010
EditorsJeff Bennett
Place of PublicationCanberra, ACT
PublisherEnvironmental Economics Research Hub
Pages1-33
Number of pages33
Publication statusPublished - 2010
EventEconomics and Environment Network Symposium - Australian National University, Canberra, Australia
Duration: 22 Nov 201024 Nov 2010

Conference

ConferenceEconomics and Environment Network Symposium
CountryAustralia
Period22/11/1024/11/10

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