The management of inland wetlands and river flows and the importance of economic vaulation in New South Wales

Consumptive use of water, particularly for irrigated agriculture, has greatly reduced flows in many rivers in NSW. This has reduced the amount of flooding in inland wetlands and reduced many of their ecological values. Difficult policy decisions are required to halt or reverse this degradation. We revise current policies and frameworks for decisions about management of river flows and inland wetlands in NSW. The commercial value of water for irrigation is often measured in terms of agricultural output, while the value of water for preserving wetland quality is described in ecological terms. In this paper we advocate the need for the correct valuation of the benefits of irrigation as well as the need to use environmental valuation techniques to estimate the monetary value of improved wetland quality when using an economic framework to assist in decisions about the management of river flows and inland wetlands. The paper reviews the use of revealed preference and stated preference techniques for estimating the monetary value of improved environmental quality, and provides examples of where these techniques have been used to value wetlands and river flows.