Category Archives: Water

298 – Potential value from restoring urban drains

I remember as a child playing in the stormwater drains near my home in suburban Perth. The drains were straight, steep-sided, fenced off (to keep us out) and the banks were bare grass, but the water contained little fish, called gambusia, that we loved to catch, not caring that they were actually feral pests.

These days, there is growing interest in restoring urban drains to something approaching a natural stream, including natural vegetation on the surrounding land. In a study funded by the CRC for Water Sensitive Cities, we set out to measure the benefits from restoring a particular drain in Perth.

gambusiaThe drain in question was Bannister Creek, which is really close to my childhood home and those other drains I played in.

In 1979 the creek was straightened, deepened, and made into a traditional drain. During the 1980s and 1990s, the area was urbanised, leading to loss of the wetland system and riparian vegetation, nutrient-rich runoff from lawns and gardens, runoff from industry, and increased erosion and pollution problems in the catchment. Additionally, during high-rainfall events, the increase in the volume and speed of water surging through the now straightened and steeply-banked Banister Creek main drain had become a public-safety risk.

In response, a volunteer group formed (the Bannister Creek Catchment Group), with the aim of improving the creek/drain, including a project to rehabilitate a section of it to a “living stream”. The aim was that this would provide flood-mitigation, local amenity benefits, improved water quality, and slower flow velocity.

The restoration project, from 2000 to 2002, involved giving the creek a more natural shape, with meanders, riffles, fringing sedges, gentle sloping banks, and thick vegetation on the banks.

The transformation from drain to living stream can be seen in Figure 1, which tracks the evolution of the area through time.


Figure 1. Drain restoration over time.

Figure 2 shows the changes at ground level. They were pretty dramatic.


Figure 2. Before and after drain restoration.

To estimate the impact of these changes we examined changes in house prices in the area. We used a statistical model to separate out the various influences on house prices, so that we could isolate the influence of the drain restoration.

This approach means that we are capturing the benefits to local residents, but not possible benefits to others, and not ecological benefits that local residents are unaware of. We expect that the measured benefits would include aspects of amenity, recreation and environmental values.

The results were really interesting, and somewhat surprising in their magnitudes. We found that the restoration project had an influence on property prices over a distance of about 200 metres from the creek. Given that the restored section of the creek was about 320 metres long, quite a large number of property values were affected.

In the first few years after project commencement, property values in the area actually fell, probably reflecting a negative attitude to the substantial earthworks that were required.

However, by 2007 the impact had become very positive. On average, the sale prices of houses in the area rose eventually by an average of 3.9 to 4.7% due directly to the restoration project. Considering only these benefits, the costs of the project were only about 25 to 50% of the benefits.

Overall, the results were very encouraging about the prospects for this type of project to deliver worthwhile benefits to the community.

Further reading

Polyakov, M., Fogarty, J., Zhang, F., Pandit, R. and Pannell, D. (2016). The value of restoring urban drains to living streams, Water Resources and Economics Journal web site ♦ IDEAS page

292 – Walking the Thames Path

My wife is a keen walker and has been angling to get me to do a long walking holiday with her for years. I finally said I’d do it, provided we avoid hills. She chose the Thames Path, which is not only flat, but also supremely beautiful and really interesting.

thames01Day 1 of walking, source to Ashton Keynes. The source is dry, as it usually is. About a kilometre “downstream” there is a gushing spring where the flow really starts. At this stage the Thames is just a narrow stream and the water is crystal-clear. We get stuck in a water-logged field and stung by nettles but still have a lovely first day. In Ashton Keynes the infant Thames runs down the main street, between the road and people’s houses, requiring mini bridges for cars at each house.

thames02Day 2, to Cricklade. The path departs from the Thames for a bit and takes us between a series of man-made lakes, which are the result of old gravel mining. I saw an otter in one of them! It is striking that as soon as we reach a paddock where cows have access to the river, the water goes from almost perfectly clear to cloudy.

Day 3, to Upper Inglesham. We walk under a busy road (the A419) near Cricklade, but after that it’s very peaceful and mostly remote from people. Apart from locals walking their dogs, we’ve seen only one pair of Thames walkers going upstream so far.

thames03Day 4, to Kelmscott. Just before Lechlade-on-Thames the river suddenly widens and becomes navigable to motor boats. Soon after that, we reach the first of many locks (there are 44 on the Thames). It is fascinating watching how they work. In the village of Kelmscott is the home of William Morris (famous 19th century designer, writer and socialist activist) and we enjoy looking inside his home which is open to the public this day.

thames04Day 5, to Newbridge. As on most days, there is a bit of the path that departs from the bank, presumably because of an uncooperative landholder. Chimney Meadows Nature Reserve is lovely. We meet a woman from the Wildlife Trust which manages the Reserve and learn how they manage meadows quite actively to maintain their appearance. We’re seeing increasing numbers of slow-moving power boats, mostly long, narrow canal boats.

Day 6, to Eynsham. Another day, another beautiful walk. We are amused by the toll bridge charging 5p per car crossing between Swinford and Eynsham. The locals we meet are mostly delightfully enthusiastic about us walking the Thames. We are also struck by how many of them have relatives in Australia – almost all of them, it seems.

thames05Day 7, to Oxford. We pass a beautiful wood and the first significant hill close to the river. We start to meet more other walkers. Signs of civilisation increase steadily as we approach Oxford. Close to Oxford the river feels more managed. We spend several days in Oxford, resting and exploring all the amazing things.

Day 8, to Abington. Beyond Oxford, it quickly becomes beautiful and verdant again. We meet Margaret and Gordon, septuagenarians who are also doing the Thames Walk. I hope we’re as fit as they are at that age. In Abingdon we learn about their eccentric tradition of throwing thousands of buns off the top of the County Hall to the crowds massed below, to celebrate significant royal events.

thames06Day 9, to Dorchester-on-Thames. Yesterday we both felt that we could have walked further, but today (which is not much further) we feel worn out by day’s end. It’s another beautiful day walking right by the water the whole way. Dorchester has many really old buildings. We stay at the Fluer de Lys Inn, built in 1520. These really old places tend to be rather crooked; the floor level in our room varies by about 20 cm.

Day 10, to Steatley. A long day of walking, with by far the worst weather of the trip. It rains heavily and consistently, the path gets muddy and then, unusually and unfortunately, the vegetation closes tightly in on the path. We get completely drenched pushing through it. The insides of my boots could not have been wetter if I’d walked in the river. We are so cold and uncomfortable when we reach Moulsford that we pike out and get a taxi the last few km to Streatley.

thames07Day 11, to Reading. After yesterday’s rain I fear we’ll be up to our knees in mud today, but it mostly isn’t bad. Near Whitchurch-on-Thames, the path goes up a hill and through a wood – one of the most beautiful stretches of the whole walk. The last part of today’s walk is into Reading, making it the least natural part of the walk. In Caversham (over the river from Reading) I visit the Fox and Hounds Hotel where, in April 1960, teenagers John Lennon and Paul McCartney played in public as a duo for the only time. This was well before the Beatles were playing regular gigs.

Day 12, to Henley-on-Thames. The river is very much wider than it was in the early days of our walk. The Saturday market is packing up when we make it into Henley. This market has been going since the 13th Century. Two other notable things about Henley are that it is world famous for its rowing regatta, and it’s where my grandfather lived up until 1910. He later took up rowing, and won the Kings Cup in the Western Australian crew of 1927.

thames08Day 13, to Marlow. I feel a bit melancholy knowing this is our last day. There is a lot more development along the bank today than we’ve previously seen. We’ve seen some pretty expensive houses along the way since about Abingdon, but today takes the cake. One place we get to walk through seems like it could be owned by a billionaire. Still, it’s a lovely walk. We celebrate the conclusion with a cup of tea in Marlow, and then get a ferry back to Henley where we’re staying.

Overall, a wonderful experience. I hope we get an opportunity to do the rest of the walk into London at some stage.

281 – Ranking Environmental Projects Revisited

In 2013 I put out a set of 20 blog posts giving practical advice about ranking environmental projects. I’ve upgraded the consolidated report about this to make it even easier to use and more broadly applicable.

My working paper on ranking environmental projects has been quite popular, with about 450 downloads, and I’ve had good feedback from various people who actually used it. I’ve put out a new version of the working paper with lots of small improvements, but with three main ones.

  1. I’ve included two additional ways to estimate the potential benefits of a project. The original paper was based on the approach we use in INFFER, which is designed for projects that address discrete, identifiable environmental assets. There are environmental projects that aren’t like that, and the new report makes it easier to evaluate and rank those.
  2. I’ve provided templates that can be used to ask the specific questions about each project to collect the required information for evaluation and ranking. These are somewhat based on INFFER, but they are Word documents, so that users can easily adapt them to suit their own purposes.
  3. I’ve provided spreadsheets which can be used to collate the information collected in the Word templates. They include the formulas needed to calculate the Benefit: Cost Ratio for each project. There are various versions of the spreadsheets, matching the different approaches outlined in the report. The versions vary in complexity and detail, depending on how much depth the environmental organisation wants to go into for each project.

The new version of the working paper is available at AgEcon Search, and the templates and spreadsheets can be downloaded from the data archive page on my web site.

I’ve also created a version of the report that is specifically targeted to urban water managers and utilities. There are many organisations linked to the CRC for Water Sensitive Cities who I think could find this version useful.

Further Reading

Pannell, D.J. (2015). Ranking environmental projects, Working Paper 1506, School of Agricultural and Resource Economics, University of Western Australia. Full paper ♦ Water Sensitive Cities version

Pannell, D.J., Roberts, A.M., Park, G., Alexander, J., Curatolo, A. and Marsh, S. (2012). Integrated assessment of public investment in land-use change to protect environmental assets in Australia, Land Use Policy 29(2): 377-387. Journal web site ♦ IDEAS page for this paper

274 – Tokenistic policies

Many government actions are tokenistic. They are too small to really make a difference, but they are pursued anyway. Why do governments do this, and how do they get away with it without provoking public anger?

Listening to ABC Radio National’s breakfast program this week, I heard an interesting interview with Professor Hugh White from the Strategic and Defence Studies Centre at the Australian National University. He was arguing that the current response to the IS threat in Syria and Iraq is too small and constrained to achieve any significant impact on the progress of IS.

“If you find yourself, as I think we do today, undertaking military operations without making them big enough to give yourself a reasonable chance of success, you’re just going through the motions and you’re better off not doing it.”

“Going through the motions doesn’t make strategic sense and I don’t think it makes moral sense either.”

jetWhat struck me about this argument was its similarity to my own argument about some environmental investments by governments. Starting with dryland salinity, I argued that our investment was spread too thinly across too many investments for any of them to be successful. Reinforcing this, the Australian National Audit office concluded that the level of change in land management in well-monitored cases was about one percent of the level needed to achieve stated targets.

More recently, I’ve been researching other aspects of water quality (nutrients and sediment) and there too governments tend to hugely under-fund projects. For example, funding to protect the Gippsland Lakes in Victoria from nutrient and sediment pollution is around 2% of the level that would be needed to achieve the official target of a 40% reduction. (See PD210)

One question is, why do governments do this? The reasons probably vary from case to case, but I think there are two main factors. The first is, to be seen to be doing something. At least in some cases, the government realises that the funding allocated is woefully inadequate, but they proceed with the policy anyway because they think there is electoral advantage in being seen to be doing something, rather than nothing. So this is a cynical political motive.

In other cases, I think the reason is ignorance, combined with a lack of evidence and analysis in the policy-development phase, combined with a tendency towards excessive optimism about the effectiveness of a proposed policy (PD213). That was the problem with the salinity policy. Lots of people thought it was a good idea to have a policy to combat such a prominent national problem, but very few people had enough knowledge of the science and economics of salinity to recognise that the policy was badly misconceived and would achieve little. The policy approach adopted was an evolution of earlier programs (the National Landcare Program and the Natural Heritage Trust) rather than one designed after careful analysis of what it would really take to substantially reduce the impacts of salinity.

This second reason is, perhaps, less offensive than raw cynical politics, but it’s still terrible.

Another interesting question is, how do they get away with it? Why is there not more public anger directed at these politically motivated or ill-conceived policies? Here are some possibilities.

Complexity. The issues I’ve talked about are complex and multi-faceted. It can be difficult even for experts to work out what policy response would be most effective. Most people lack the expertise to judge whether any particular policy response will be effective. They don’t have the time or inclination to learn enough to make those judgements. They therefore trust governments to do what they say they are doing.

Time lags. For some of these issues, the effects of current management would not be felt for some time – years or even decades in the future. By then, it’s hard to make the connection back to policies that were put in place previously, and judge whether they made a positive difference.

Intractability. Some of these problems could be solved but only at exorbitant expense, while others can’t be solved at all in any practical sense. I suspect that governments sometimes recognise this and then implement the least costly policy they think they can get away with politically.

Communication challenges. I was interested that, in her interview with Hugh White, the program’s host Fran Kelly did not pursue questions about the tokenistic nature of the policy, focusing instead on other issues. Perhaps she felt the argument was too complex or subtle to be comprehended by people eating their Weet Bix. Or perhaps she herself didn’t recognise its significance.

Sometimes an underfunded policy does explode into political controversy because of its ineffectiveness, but usually they don’t. Normally, they drift along, spending money and going nowhere much. They might receive an adverse review from some government committee or inquiry, but governments tend not to respond substantively to those sorts of reviews if they think they can get away with it.

Overall, policy tokenism is an understandable but regrettable aspect of our system of democratic government. It is hard to combat, but sometimes can be changed by outside pressure, either from the public or from vocal expert commentators.

Further reading

Pannell, D.J. and Roberts, A.M. (2010). The National Action Plan for Salinity and Water Quality: A retrospective assessment, Australian Journal of Agricultural and Resource Economics 54(4): 437-456. Journal web site here ♦ IDEAS page for this paper

Roberts, A.M. Pannell, D.J. Doole, G. and Vigiak, O. (2012). Agricultural land management strategies to reduce phosphorus loads in the Gippsland Lakes, Australia, Agricultural Systems 106(1): 11-22.    Journal web site here ♦ IDEAS page for this paper

267 – Budget 2014 and the environment

Last week’s budget included funding cuts to many areas of government, and the environment certainly was one of the areas to suffer. There were some new initiatives, but they were outweighed by what was taken away. 

The most substantial environmental initiative in the budget is the Emissions Reduction Fund (ERF), a key part of the government’s election promise of a Direct Action climate policy. The headline commitment is A$2.55 billion, although spending in the next three years will be only A$300 million, A$355 million and A$417 million – 30% less than the amounts announced by Environment Minister Greg Hunt as recently as November last year.

The ERF is intended to replace the carbon tax, which is expected to raise more than A$7 billion in 2013-14. It is no secret that economists generally don’t support this policy change, viewing it as a move from a relatively efficient to a relatively inefficient mechanism that will worsen the deficit.

volunteersAnother of the key initiatives also amounts to give and take. There is A$525 million over four years for the Green Army (another election promise), which will undertake a range of environmental work. But this is almost fully offset by cuts of A$484 million over five years to the Caring for our Country programme and Landcare, now merged into a new National Landcare Programme.

Of the A$1 billion over four years that remains in the merged programme, some is tied to other election commitments, such as a nature corridor in Western Sydney (A$7.5 million), a Whale and Dolphin Protection Plan (A$2 million), and the 20 Million Trees programme (A$50 million).

These changes amount to a substantial cut in funding to Australia’s 50 regional natural resource management bodies – a fate they also suffered after the last change of government in 2007.

On the face of it, the budget looks to have delivered on an election promise to safeguard Australia’s most iconic environmental asset, the Great Barrier Reef, with a new Reef Trust set to provide A$40 million over four years.

But while this sounds respectable, it is a very small percentage of the amount needed to achieve existing targets for the reef. It is also partly offset by a A$2.8 million cut (over four years) to the Great Barrier Reef Marine Park Authority.

There are lots more cuts too. The 4900 staff employed in the environment portfolio will be reduced by 300, although that is fewer than might have been feared.

Then there are numerous cuts to existing programs. The most affected areas, predictably, are those related to climate change, including carbon storage, renewable energy and alternative fuels. The Australian Renewable Energy Agency is to be wound up, saving A$1.3 billion over five years starting in 2017-18. Funding of A$1 billion remains to support existing projects. 

Another large saving is a A$459 million cut to the Carbon Capture and Storage Flagship Programme, also commencing in 2017-18.

Climate Spectator has confirmed that an earlier promise of A$500 million for a One Million Solar Roofs program has been quietly dropped. Similarly, there is no sign of the promised A$50 million for Solar Schools, and the promised Solar Towns program has been dramatically scaled down, from A$50 million to A$2.1 million.

Biodiesel and ethanol will both be subject to increasing excise rates, growing to 50% of the “energy content equivalent tax rate” (the scale by which fuels are taxed according to how much energy they contain) by 2021. This will reduce the incentive for people to prioritise these fuels over fossil fuels.

Meanwhile, there are various cuts to fuel efficiency and green technology measures, including:

  • The National Low Emissions Coal Initiative (A$17 million)
  • The Clean Technology Programme (A$45 million)
  • The National Greenhouse and Energy Reporting Scheme (A$2 million)
  • The Ethanol Production Grants program (A$120 million over six years)
  • Grants to support algal synthesis and biofuels (A$5 million)
  • The Cleaner Fuels Grants Scheme
  • Water and science

Water is also a target for cuts, with the abolition of the National Water Commission (A$21 million over four years) and savings of A$408 million in the Sustainable Rural Water Use and Infrastructure progam, leaving that program with A$4.5 billion over 10 years.

These savings include reduced funding for water buyback, with the government prioritising water recovery through infrastructure projects. In this, the government has chosen to prioritise a highly inefficient method to generate water, in response to political pressure from the agriculture sector. As with the changes to climate policy, this policy conflicts with the government’s aim to be seen as a sound economic manager.

Environmental research funding will probably be affected by cuts to CSIRO (A$111 million), the Cooperative Research Centre program (A$80 million) and the Australian Research Council (A$75 million). It will definitely be affected by cuts to the National Environmental Research Program (A$21 million), the Office of Water Science (A$10 million) and the Australian Institute of Marine Science (A$8 million).

Finally, the decision to resume indexation of the fuel excise will have an incidental effect on the environment. One cannot help being struck by the irony of this measure being introduced by a government that was so highly critical of the carbon tax and the burden it places on the community.

The initial cost of this change will be relatively minor (A$280 million in 2014-15), but it will grow rapidly year by year (to A$1.85 billion by 2017-18). Before long, its annual cost may exceed that of Australia’s carbon pricing arrangements, depending on how prices change in Europe’s carbon market, which the previous government had signed up to.

Not that I’m being critical of the decision to index the fuel excise. As well as generating revenue, it will reintroduce at least some of the incentive to reduce fossil fuel consumption that will be lost if the Senate approves the government’s plan to dismantle the carbon pricing system.

That point aside, it is not a good budget for the environment – but then that was expected. In relative terms, the environment probably hasn’t been hit any harder than other areas like health and education.

A version of this article was first published in The Conversation on 14 May 2014.

I did an interview on ABC Radio National (Bush Telegraph program) on 16 May 2014 about Landcare and the Budget. You can listen to it here. (My bit starts about half way through the item.)