Assessing environmental protection investments in New South Wales catchments

Abstract

In this study we analyse the benefits and costs of investing in environmental protection in regional New South Wales. We do so by generating cost-benefit analyses for three projects which aim to protect native species: the regent honeyeater in the Hawkesbury-Nepean Catchment; the malleefowl in the Lachlan Catchment; and the booroolong frog in the Namoi Catchment. By generating benefit-cost ratios for these three cases, we demonstrate the use of choice modelling as a means to estimate the often difficult-to-determine benefits associated with environmental investment. The use of choice modelling estimates strengthens the analysis by including ‘non-monetary’ values which are often excluded from such analyses. We conclude by indicating how the benefit-cost ratios can be tabulated to offer a comparison of investments, thus demonstrating how this approach gives policy makers a useful quantitative decision support tool when considering investments. Access to such information allows for the funding of only those investments that cause an improvement in the well-being of society and the prioritisation of competing proposals.

Keywords:

• cost-benefit analysis
• choice modelling
• native vegetation
• native species
• healthy waterways
• environmental protection

Acknowledgments

The authors wish to thank the Lachlan, Namoi and Hawkesbury-Nepean Catchment Management Authorities for their support.

Notes

1. CM has been applied in a wide range of environmental management contexts ranging from ecosystem resilience (Scheufele & Bennett in press) to kerbside recycling (Gillespie & Bennett in press).

2. Though the specific choice of interest (discount) rate is open to debate, once chosen it can be subjected to sensitivity analysis as in step 8 (Hanley & Barbier 2009).