A Cautionary Note on the Use of Socio‐Economic Analyses in Water Planning

Lin Crase ()

Economic Papers, 2010, vol. 29, issue 1, 41-47

Abstract: The Murray–Darling Basin Authority is required to deliver a Basin Plan that is consistent with the Commonwealth Water Act 2007. As part of the development of this plan the Authority has sought input on the methodology used to develop sustainable diversion limits, ostensibly designed to maintain and/or improve the ecological health of the Basin. Regrettably, the suggested approach implies mixing multiple and conflicting objectives into a single policy response. In this article some of the problems with this approach are highlighted. In particular questions surrounding the objective of improving ecological outcomes are raised. I conclude that the Plan is unlikely to deliver on the ecological objectives, particularly if the socio‐economic impacts and the less‐rigorous techniques for enumerating them are given excessive weight in decision making. A preferred approach would allow for separate interventions to deliver on the social and economic fronts.

Date: 2010
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