An Economic Analysis of the Eutrophication Problem of the Barwon and Darling Rivers in New South Wales

Chris M. Alaouze

Australian Economic Papers, 1999, vol. 38, issue 1, 51-63

Abstract: The focus of the paper is the 1000 km toxic blue‐green algal bloom which afflicted the Barwon and Darling Rivers in 1991. Factors which contributed to the bloom are increased water use for irrigation, drought and nutrient pollution, mainly phosphorus from sewage treatment plants and other point sources. A model for finding the optimal allocation of nutrient removal amongst point sources is developed in which the blue‐green algal externality impacts on a number of locations on the rivers. The cost of pollution function is unknown but our results suggest that if the marginal costs of phosphorus removal are low, the equilibrium level of phosphorus at each location is likely to be below that which reduces the recreational value of the rivers.

Date: 1999
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