Economics of protecting road infrastructure from dryland salinity in Western Australia

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[Truncated abstract] The salinisation of agricultural land, urban infrastructure and natural habitat is a serious and increasing problem in southern Australia. Government funding has been allocated to the problem to attempt to reduce substantial costs associated with degradation of agricultural and non-agricultural assets. Nevertheless, Government funding has been small relative to the size of the problem and therefore expenditure needs to be carefully targeted to interventions that will achieve the greatest net benefits. For intervention to be justified, the level of salinity resulting from private landholder decisions must exceed the level that is optimal from the point of view of society as a whole, and the costs of government intervention must be less than the benefits gained by society. This study aims to identify situations when government intervention is justified to manage dryland salinity that threatens to affect road infrastructure (a public asset). A key gap in the environmental economics literature is research that considers dryland salinity as a pollution that has off-site impacts on public assets. This research developed two hydrological/economic models to achieve this objective. The first was a simple economic model representing external costs from dryland salinity. This model was used to identify those variables that have the biggest impact on the net-benefits possible from government intervention. The second model was a combined hydro/economic model that represents the external costs from dryland salinity on road infrastructure. The hydrological component of the model applied the method of metamodelling to simplify a complex, simulation model to equations that could be easily included in the economic model. The key variables that have the biggest impact on net-benefits of dryland salinity mitigation were the value of the off-site asset and the time lag before the onset of dryland salinity in the absence of intervention. ... In the case study of dryland salinity management in the Date Creek subcatchment of Western Australia, the economics of vegetation-based and engineering strategies were investigated for road infrastructure. In general, the engineering strategies were more economically beneficial than vegetation-based strategies. In the case-study catchment, the cost of dryland salinity affecting roads was low relative to the cost to agricultural land. Nevertheless, some additional change in land management to reduce impacts on roads (beyond the changes justified by agricultural land alone) was found to be optimal in some cases. Reinforcing the results from the simple model, a key factor influencing the economics of dryland salinity management was the urgency of the problem. If costs from dryland salinity were not expected to occur until 30 years or more, the optimal response in the short-term was to do nothing. Overall, the study highlights the need for governments to undertake comprehensive and case-specific analysis before committing resources to the management of dryland salinity affecting roads. There were many scenarios in the modelling analysis where the benefits of interventions would not be sufficient to justify action.
Original languageEnglish
QualificationDoctor of Philosophy
StateUnpublished - 2008


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