Is dilution the solution for water pollution? An economic analysis

Upananda H. Paragahawewa, Graeme J. Doole and Bob Bower

No 202984, 2015 Conference (59th), February 10-13, 2015, Rotorua, New Zealand from Australian Agricultural and Resource Economics Society

Abstract: High nitrate concentrations have been reported within Canterbury aquifers due to agricultural intensification. Reducing nutrient loadings to groundwater by a reasonable degree is difficult for industry because of the anticipated cost of effective mitigation technologies. A novel alternative is to decrease nitrate concentration through increasing the amount of water present in the aquifer through the use of Managed Aquifer Recharge (MAR) in combination with some minor farm-level mitigation practices. However, this poses a difficult economic problem that involves balancing the benefit of lowering nitrate concentrations in groundwater, improving reliability of groundwater availability for future irrigation, the capital cost of MAR infrastructure, and the cost of source surface water to use in the dilution. This study presents a dynamic economic analysis that weights these alternative sources of value. Overall, it is shown that a MAR scheme is of positive value to both the environment and economy, with an average benefit: cost ratio of four, and around $76m of income and 170FTE of employment gain per annum at regional level.

Keywords: Farm Management; Land Economics/Use; Resource/Energy Economics and Policy (search for similar items in EconPapers)
Pages: 15
Date: 2015-02
New Economics Papers: this item is included in nep-agr and nep-env
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aare15:202984

DOI: 10.22004/ag.econ.202984

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