Based on the findings described in the previous sections, the following information provides a reasonable basis for recommending an approach where general waterway health improvements on a significant waterway can be assessed (expressed as one-off payments in $2015): Meta-analysis of 16 choice modelling studies by Rolfe and Brouwer (2008) found an average WTP of $2.10 per km of waterway in good health per household Values provided by van Bueren and Bennett indicate a WTP of between $0.11 to $2.72 (midpoint $1.30) per km of improvement in waterway health per household on these, a WTP of $1.00 to $3.00 per Victorian household per km of significant water way returned to good health, or prevented from degrading, appears reasonable These values should be multiplied across a relevant number of households depending on the significance of the waterway. Where more specific attributes can be assessed for significant waterways, such as fish species or water quality attributes, it is recommended that values for the George River and/or Moorabool River be considered, as these both exist within an urban setting in large Australian cities and are more likely to satisfy benefit transfer requirements. Note that Georges River values (see Table 3) should only be applied to 38% of households when aggregating across Victoria to account for and 18% of households for the Moorabool River. Wetlands The literature revealed a range of wetland values depending on quality, size, and location. The typical range for preservation of wetlands was found to be between $0.0005 and $0.005 per hectare per household. For a Victorian application, this equate to between approximately $1,000 and $10,000 per hectare of wetland conserved, highlighting the large degree of uncertainty in these estimates. Bays
Amenity and recreational benefits provided by waterways and bays Description of externality benefits relevant to IWCM Webster dictionary defines amenity as “something that makes life easier or more pleasant”. Amenity therefore includes both use values such as recreation, as well as non-use values such as aspects of environmental health (including the waterway and bay values discussed in Section 3). For the purposes of this literature review, the non-use aspects of waterway amenity are discussed in the ecological health values section (Section 3), while the use aspects will be discussed in this section. It is well recognised that outdoor recreational activities are an important component of personal and social wellbeing. Waterways and bays are used recreationally for swimming, fishing, sailing, recreational hunting, and boating. Waterside recreational opportunities include camping, running, cycling, and walking. IWCM provides the opportunity for improved recreational opportunities through enhanced waterway environments and the provision of assets that can be used recreationally, such as wetlands and other water bodies. Literature review findings Key qualitative findings The key qualitative findings of the literature review for the recreational value of rivers and streams, wetlands, and the bays that are relevant to IWCM are presented below. is evidence supporting the recreational and amenity value of waterways, and clear linkages to improved waterway health enhancing these values in many cases Recreational values for waterways tend to be lower where accessible substitutes exist Key economic data
benefits of additional water use (benefit is the avoidance of costs associated with centralised supply) - currently under review and should be updated when better data is available Avoided sewerage avoided cost - $0.67 per kL of wastewater (Eastern Treatment Plant) - $0.44 per kL of wastewater (Western Treatment Plant) - apply where a permanent change in wastewater volume is expected (benefit is the avoidance of costs associated with centralised treatment) - currently under review and should be updated when better data is available Urban cooling - heat-related health impacts avoided cost of treatment $1,270 per 100,000 people per degree above 30 degrees per day - apply if LRMC approach not applicable - apply to each degree of urban cooling produced on each day above 30 degrees - does not include mortality impacts or additional impacts caused my heatwaves - sensitivity of results over a large range should be tested (+/- 50%) Urban cooling - energy savings avoided cost $0.24 per residence per degree above 20 degrees per day - apply if LRMC approach not applicable - apply to each degree of urban cooling produced on each day above 20 degrees
caused my heatwaves - sensitivity of results over a large range should be tested (+/- 50%) Urban cooling - energy savings avoided cost $0.24 per residence per degree above 20 degrees per day - apply if LRMC approach not applicable - apply to each degree of urban cooling produced on each day above 20 degrees - sensitivity of results over a large range should be tested (+/- 50%) Flood damage externalities summary Benefit Valuation approach Value Factors to consider when applying: damage - residential buildings avoided cost Approx. $1,000 per building cm of height reduced for flooding greater than 10cm below floor level - to residential flooding only - requires technical modelling to estimate change in flood height from IWCM option - sensitivity of results over a large range should be tested (+/- 50%) impacts - car transport willingness to pay - $14.35 per hour of disruption per vehicle occupant for private travel - $45.90 per hour of disruption per vehicle occupant for business travel - requires an assessment of impact of lost travel time and traffic flows as a result of floods - sensitivity of results over a large range should be tested (+/- 50%)