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Ecological basis for river habitat and in-stream flow management

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					      Case study 11


      Ecological basis for river habitat and
      in-stream flow management



                                     suMMaRy

date of evaluation: June 2005


duration and projects:

The projects analysed that were supported by Land & Water Australia (LWA) were GRU10
(1993–94 to 1997–98), GRU18 (1995–96 to 1996–97) and GRU22 (1996–97).



Nature of innovation:

The three projects analysed in this case study produced scientific knowledge on in-stream
ecology and its interaction with flow regimes in Queensland waterways; as well as important
information on a range of techniques for allocating water for environmental use.



Who was involved:

The Centre for Catchment and In-Stream Research at Griffith University carried out the three
projects. In addition to funding from LWA, resources were also contributed by the Queensland
Department of Primary Industries and Fisheries.


adoption and impact:

The scientific knowledge has been widely incorporated into decision-making processes
on environmental allocation of water, as well as into monitoring programs with respect
to aquatic ecosystem health. Specific examples include its use in the development of the




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      Environmental Health Monitoring Program of the south-east Queensland Healthy Waterways
      Program; and the incorporation of the science and techniques for determining environmental
      flows into the Queensland water resource planning process.


      evaluation:

      A benefit–cost analysis for the investment in the three Griffith University projects was carried
      out through valuing benefits from an improvement in water quality outcomes in south-east
      Queensland due to improved monitoring processes; as well as the benefits from a more
      transparent and scientific process for water resource allocation in Queensland. Willingness-
      to-pay estimates for improved water quality and improved equity in water allocation outcomes
      were used as key assumptions in valuing the benefits.



      Investment criteria

      The results of the investment analysis21 were:

       Criterion                                                    discount rate 6%

                                               Benefits to date      all benefits and      Benefits to LWa
                                              only and all costs         all costs          and LWa costs

       Present value of benefits ($m)                1.22                  5.17                  2.69

       Present value of costs ($m)                   3.08                  3.08                  1.60

       Net present value ($m)                        –1.87                 2.09                  1.09

       Benefit:cost ratio                          0.39 to 1             1.68 to 1             1.68 to 1

       Internal rate of return (%)                 Negative                10.26                 10.29




      Current contact:

      Angela Arthington, Griffith University, Nathan, Queensland, telephone 07 3875 7403




      21 The values used in the tables and text of this case study are not the most up-to-date ones. Please
         check the main report for values that have been updated to 2005–06 dollars, are discounted to June
         2006, and reflect a 40-year analysis period. The case studies in future editions will incorporate the
         updated values.




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                               FuLL Case study

Introduction

The flow regimes of many of Australia’s rivers have been altered over time due to increased
demands for water for various purposes including urban, industrial and agricultural uses.
The importance of flow regimes to the ecology and health of rivers has been increasingly
recognised.

Land & Water Australia (LWA) funded research in the 1990s into the ecological impacts
of varying flow regimes on aquatic health. This coincided with the Council of Australian
Governments (COAG) review of water resource policy in 1994, which recommended that
comprehensive systems for water allocation be introduced that take account of water
entitlements, water trading arrangements and the provision of water for the environment.

Conceptual frameworks, practical methods and improved scientific information were required
to assist with the implementation of the COAG reforms. Three Griffith University projects were
funded by LWA to progress methods and scientific knowledge in this area.



Investment description

The three projects funded by LWA were GRU10, GRU18 and GRU22. All three projects were
carried out at Griffith University by the Centre for Catchment and In-Stream Research (CCISR).

GRU10 (Ecological basis for river habitat and in-stream flow management) ran from April
1994 to December 1998. Its objectives were:

•    to determine the effects of flow regime, including drought and flood sequences on
     channel morphology, in-stream cover, substrate diversity and other attributes of fish
     habitat, including certain aspects of water quality, in selected Queensland rivers

•    to develop statistical models describing the relationship of flow regime, in-stream
     habitat and fish community structure (diversity, species composition, age structure of
     populations) in these rivers, and to further develop a conceptual model which integrates
     these relationships and the effects of spatial variation in flow regimes

•    to verify these relationships via experimental manipulations in selected rivers (e.g. by
     manipulating habitat and thereby fish species)

•    to define the flow events governing the breeding cycles and levels of recruitment of
     selected, indicator fish species, and the habitat requirement of each life history stage

•    to determine the tolerances of these species to various levels, sequences and durations
     of flooding and drought




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      •    to develop guidelines on the minimum and optimum flow regimes required to maintain
           channel morphology, in-stream cover, substrate diversity and fish habitat, fish breeding
           cycles and recruitment, and fish community structure, in selected Queensland rivers

      •    to provide a manual summarising all available information (from this project, previous
           CCISR research and the literature) on the biology, tolerances, habitat and flow
           requirements of Queensland riverine fish species for the use of water managers,
           integrated catchment management groups and other scientists.

      Rivers in the study were the Mary, Brisbane, Albert, Logan, Johnstone, Tully, Mulgrave,
      Russell and Burdekin.

      GRU18 (Rapid procedure for practical in-stream assessments) was funded from 1995–96 to
      1996–97. Its objectives were:

      •    to assess the concept and approach of the South African ‘building block methodology’
           (BBM) and report on it to LWA as a possible or partial means of developing rapid in-
           stream flow assessment of Australian riverine systems

      •    to demonstrate the applicability and suitability of BBM via an Australian case study, the
           Logan River in south-east Queensland

      •    to provide a procedural manual describing BBM or an appropriate variation of it for use
           in future Australian in-stream flow assessments.

      GRU22 (Comparative evaluation of environmental flow assessment techniques) was
      undertaken in 1996–97. The project evolved out of a national seminar conducted in 1995
      that identified several priority areas for research and development (R&D) with respect to
      environmental flow assessment. The objectives of the project were:

      •    to review currently used and available techniques for assessing flow requirements,
           so that water managers have the key information and recommendations on which
           techniques are suitable for which suite of environmental values, their limitations,
           advantages and cost-effectiveness

      •    to propose a best-practice framework for the application of techniques to environmental
           flow assessment

      •    to provide R&D priorities for the refinement, development and integration of the
           techniques to facilitate their use in water allocation and water reform.



      Investment costs

      Table 1 presents the investment costs for the three projects by year for LWA, Griffith
      University (CCISR) and the Queensland Department of Primary Industries and Fisheries
      (QDPIF). It shows that LWA contributed about 52% of the total funding in nominal terms.




282
table 1. Resources invested (nominal dollars) by year for LWA, researchers and funding
partners

 year                Project            LWa         Griffith         QdPIF           total
                                                   university

 1993–94              GRU10            34,397        7,000           34,500          75,897

 1994–95              GRU10           149,843        30,000         116,500         296,343

 1995–96              GRU10           153,372        30,000         118,000         301,372

                      GRU18            43,569        26,528          15,000          85,097

 1996–97              GRU10           158,080        30,000         119,500         307,580

                      GRU18            23,805        16,328          15,000          55,133

                      GRU22            47,000                                        47,000

 1997–98              GRU10           161,308        30,000         119,500         310,808

 Total                                771,374       169,856         538,000        1,479,230

Source: Nick Schofield, Land & Water Australia



Principal outputs


Project GRu10

The research carried out as part of GRU10 examined the potential to model and predict
the distribution of fish assemblages based on a combination of catchment and habitat
related variables and also examined theoretical predictions that fishes should be less tightly
regulated by habitat structures in rivers with variable flow regimes.

The GRU10 research found that catchment landscape factors (e.g. elevation, catchment area
and distance to river mouth, and aspects of flow variability) determine which species are
present at a particular location within a catchment. However, it is local factors that may be
more important in determining the relative abundances of individual species. Flow variability
falls into the latter category. The research also found that streams in catchments with more
predictable flows contained fish assemblages characterised by significantly more diverse
and uniform assemblages than streams with unpredictable flows. It was demonstrated
that flow variability does affect fish assemblage regulation and structuring, but that a
landscape perspective is needed in order to appreciate the mechanisms by which these
differences arise.

Models predicting fish assemblage structure were used successfully in the Logan River BBM
trial and Brisbane River environmental flow study funded by the Southeast Queensland Water
Corporation. As part of a separate investment, the researchers also carried out a research
project for the Queensland Government’s Water Infrastructure Planning and Development
Information Plan (WIPDIP) that further developed these applications.




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      As part of GRU10, research was carried out to determine how flow events interact with the
      breeding cycles of three species of fish. The results showed that the reproductive styles of the
      three species of fish reflect a complex interplay of hydrological regime, channel morphology
      and sexual selection. It was found that a critical period of stable low flows is important for
      successful fish reproduction in wet-tropics streams and that stream regulation that interferes
      with this critical period has the potential to interfere with reproduction of those species that
      spawn during the low-flow period between August and November in Queensland.

      A draft manual of guidelines was produced, but not published by LWRRDC as originally
      intended. However, the information within it underpinned the production of four literature
      reviews on methods for the assessment of environmental flows in rivers and new LWRRDC
      work on flows of importance to estuaries.

      Using this research as a basis, Freshwater fishes of north-eastern Australia, a 684 page book was
      published by CSIRO in 2004. This book has become a prime reference text for research, teaching,
      consulting work, aquarium hobbyists, and anyone with general interest in freshwater fish in
      northern Australia (Angela Arthington, pers. comm., April 2005). To July 2004, approximately 550
      copies of this book had been sold (Angela Arthington, pers. comm., July 2005). A review can be
      found in the journal River Research and Applications (volume 21, number 9, 2005).

      The research resulted in a number of papers that demonstrate how flow variability in a large
      catchment influences aquatic habitats and fish assemblages, and the implications for flow
      management. These papers provided a basis for recommending flow requirements of fish in
      the Burdekin River in a water allocation management plan (WAMP) framework, and in the
      Logan, Bremer, Brisbane, Pine. Mary, Burnett, Fitzroy, Pioneer and Barron water resource
      plans (WRPs).

      Papers produced by the researchers describe the freshwater fish fauna and the biology
      of important species in streams of the wet tropics region, the dune fields of Cape Flattery
      and monsoonal rivers of Cape York. These papers highlighted the diversity and levels of
      endemicity of stream fishes in the wet tropics region, and addressed the conservation
      and management of rare species. This body of work is of relevance to the Wet Tropics
      Management Authority, Australian Department of Environment and Heritage, QDPIF and
      to catchment managers and integrated catchment management and natural resource
      management groups.

      Project GRu18

      Project GRU18, which sought to assess and apply the South African building block methodology
      (BBM), identified a number of key strengths of the BBM process. These include that it:

      •    is a simple and rapid methodology

      •    is a consistent, structured approach

      •    is a holistic approach with the flexibility to incorporate all available information




284
•    involves vigorous transparent reporting

•    incorporates a monitoring program to assess the benefits of environmental flows

•    can be applied to part of a river system or to a whole catchment.

However, it was also observed that a number of improvements could be made to the
methodology. These included defining the desired future state of the river; using predictive
models to extend best scientific knowledge; and making more use of flow data before and
during workshops.

The results of the research were documented in two reports describing the Logan River
trial, in order to demonstrate the practicability of the BBM approach and ways it could be
strengthened. From this case study, Griffith University researchers developed a methodology
for river flow restoration, and applied this to the Brisbane River. Another approach termed the
benchmarking methodology (now used routinely in Queensland WAMPs and WRPs) was also
developed from the experience of the Logan River trial of BBM. Griffith University researchers
also developed the fish component of the South African DRIFT (downstream response to flows
transformation) flow method.

Project GRu22

Project GRU22 produced four reports including:

•    Comparative Evaluation of Environmental Flow Assessment Techniques: R&D
     Requirements (Arthington et al. 1998a)

•    Comparative Evaluation of Environmental Flow Assessment Techniques: Best Practice
     Framework (Arthington et al. 1998b)

•    Comparative Evaluation of Environmental Flow Assessment Techniques: Review of
     Holistic Methodologies (Arthington 1998)

•    Comparative Evaluation of Environmental Flow Assessment: Review of Methods
     (Arthington and Zalucki,1998)

The above reports have been widely quoted and are one of the most significant Australian
information sources on environmental flow assessment techniques. They examine 38
Australian environmental flow studies covering approximately 31 rivers or catchments, as well
as recommending relevant R&D.



Principal outcomes

Examples of where the outputs of the three projects, in particular GRU10, have been used
include:

•    development of rigorous methods for the assessment of stream and river health in
     south-east Queensland as part of the Healthy Waterways program




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      •    assessment of the environmental flow requirements of Queensland rivers and regions
           (Logan/Albert, Gold Coast, Brisbane, North Pine, South Pine, Mary, Burnett, Burrum,
           Sunshine Coast, Dune Island, Burdekin, Pioneer, Barron and Fitzroy) via the water
           resource planning process of the Queensland Government

      •    Queensland Government use of the data from the project to develop a bioregionalisation
           of Queensland rivers for conservation and monitoring and the redesign of the State
           monitoring program

      •    numerous assessments of the health of small streams around Brisbane

      •    application of methods and knowledge to international research contracts by the Griffith
           University researchers, e.g. review of the fisheries research program of the Mekong
           River Commission.

      GRU18 was evaluated by ACIL Consulting in 1995–96 and again in 1999. The reviewers
      concluded that the project had contributed to knowledge on holistic approaches to
      environmental flow assessments, and that this holistic approach was being increasingly
      incorporated into environmental flow strategies in Australia and overseas.

      In addition, GRU22 findings have been used as a major resource by governments,
      organisations and researchers in selecting appropriate techniques for environmental flow
      assessments.

      Further details on two of the major outcomes of the research are provided below.

      Healthy Waterways

      Healthy Waterways is a program of the Moreton Bay Waterways and Catchments Partnership
      (the partnership), and is a whole-of-government, whole-of-community collaboration. It
      focuses on leadership, commitment and voluntary cooperation to understand, plan and
      manage the use of the waterways and catchments of South-East Queensland (SEQ). The
      region covered stretches from the Queensland/New South Wales border, north to Noosa
      and west to the Great Dividing Range. The partnership resulted from the combination of the
      Brisbane River Management Group (1991–2001) and the South-East Queensland Regional
      Water Quality Management Strategy project (1995–2001) and seeks to build on the outcomes
      of these programs.

      A part of the Healthy Waterways program is the Ecosystem Health Monitoring Program
      (EHMP). It was established to provide an objective assessment of the health of waterways
      throughout SEQ. There is both a freshwater component and a marine and estuarine
      component to the program. As part of the freshwater component, five sets of indicators have
      been recommended for monitoring. These five indicators and their component parts were
      developed through Stage 3 of a scientific study called Design and Implementation of Baseline
      Monitoring (DIBM3) that sought to determine which tools or indicators were most suitable for
      measuring and reporting on current and future change in the ecological condition or health
      of rivers and streams in SEQ. The information collected is used to advise councils and land




286
managers on areas of declining health, report on the effects of different land uses, and to
evaluate the effectiveness of management actions aimed at improving and protecting aquatic
ecosystems (www.ehmp.org).

The five indicators are fish, nutrients, invertebrates, ecological processes and physical/
chemical. Each of these five indicators is made up of various measures (or indices).

The fish indicator and its component measures are based on the research carried out in the
three Griffith University LWA projects. The measures are:

•    native species richness—a computer model predicts the number of fish species expected
     if a site is healthy, and then this is number is compared with the actual number collected
     to give the percentage of native species expected (PONSE).

•    percentage of exotic individuals—the relative abundance of exotic species is expected
     to increase with increasing environmental stress due to their purported superior
     competitive abilities and tolerance for degraded water quality and habitat conditions.

•    fish assemblage O/E—a predictive computer model based on data from minimally
     disturbed sites that predicts which fish species should be found in healthy streams in SEQ.
     By comparing the fish community expected (E) with the community observed (O) during
     sampling, a ratio is derived to reflect the health of the fish community. A low O/E ratio
     suggests that a site contains fewer species than expected and is disturbed in some way.

Queensland water resource planning process

The Queensland water resource planning process is established under the Water Act 2000.
The Act requires the preparation of WRPs that ensure the equitable management of water
for towns, industry, irrigation and mines, and for the natural processes that underpin
river health. The WRPs detail the aims for achieving a catchment’s social, economic and
environmental needs, while corresponding resource operation plans detail how the water
resources will be managed to meet these objectives. Together the plans:

•    allow transparent sharing of water to protect environmental and human interests

•    secure water entitlements for the life of the water resource plan

•    ensure that new entitlements will be issued only if they can be sustained without undue
     environmental harm

•    establish a basis for water allocations in nominated areas to be permanently traded,
     subject to safeguards

•    protect the health of rivers and underground water reserves.

The WRPs are developed through technical and scientific assessment, as well as community
consultation. The process through which the plans are developed is called the benchmarking
methodology. It provides a risk assessment framework and takes account of the ecological,
social and economic status of the basin.




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      There are four stages to the methodology:

      1.   form a technical advisory panel (TAP) and develop a hydrological model for the
           catchment

      2.   determine the ecological condition and trend of sites throughout the basin

      3.   develop an environmental flow-risk assessment framework

      4.   evaluate possible future water resource management scenarios nominated by the
           Queensland Government.

      Science developed in GRU10 underpins the ability to carry out much of this process with
      respect to determining appropriate environmental allocations.

      Stage 1 – Establishment of a technical panel

      The TAP is established to provide independent scientific advice to the government, and has
      expertise in the areas of hydrology, hydraulics, water quality, geomorphology, aquatic ecology,
      riparian ecology and estuarine/marine ecology (Brizga et al. 2002; Quinlan et al. 2004). At
      this stage the hydrological model is also developed which is based on the integrated quantity
      quality model (IQQM) developed in NSW.

      Stage 2 – Ecological condition and trend assessment

      The assessment involves subdividing the rivers and streams in the study area into ‘reaches’
      on the basis of flow regime, geomorphology, water resource development impacts and other
      human effects. The ecological condition of each nominated river reach is than assessed in
      comparison with a reference river state. The specific ecosystem components considered
      are geomorphology, hydraulic habitat, water quality, riparian vegetation, aquatic vegetation,
      macroinvertebrates, fish and other water-dependent variables. The condition of reaches is
      then ranked on a five-point scale in terms of change from reference condition. Difficulties
      with assessing ecological condition and trend include time scales involved in ecosystem
      adjustment to disturbance, natural variability in ecological systems, and difficulty isolating
      flow-related impacts from other impacts (Brizga et al. 2002; Quinlan et al. 2004).

      In order to separate flow-related impacts from other effects, link models have been developed
      to depict the relationship between flow (and other environmental factors) and riverine/
      estuarine ecosystem components. The link models aim to show which ecosystem component
      and functions would be altered by changes in particular flow parameters (Quinlan et al. 2004).

      Stage 3 – Environmental flow risk assessment framework

      The hydrological model IQQM is used to run risk assessments on development scenarios. This
      relates the risk of ecological impacts to quantitative measures of flow regime change. For
      each ecosystem component, the key flow indicators are subjected to a potential development




288
scenario using IQQM to simulate the resultant flows. The TAP then assesses the potential for
change in the component associated with the particular development scenario (Brizga et al.
2002; Quinlan et al. 2004).

Link models are used to show how the various flow indicators affect ecological condition and
to determine the nature of impacts that could arise in certain scenarios of water resource
development.

Stage 4 – Scenario evaluation

Water utilisation and development scenarios are proposed following consultation with a
community reference panel and stakeholder groups. The hydrological impacts of the different
scenarios are modelled, and then ecological impacts are assessed by the TAP using the risk
assessment and link models. The ecological implications of each scenario are then expressed
in terms of five condition scores (i.e. predicted levels of impacts) (Brizga et al. 2002; Quinlan
et al. 2004).



Benefits associated with the investment

The benefits from the new knowledge generated from these investments will lie in the
area of improved policy development and decision-making about both water quality and
quantity. Improved decisions in these areas can provide both economic and environmental
benefits. The knowledge can also contribute to social benefits through improved capacity of
communities to understand and negotiate trade-offs between different water uses.

A summary of the benefits associated with the research is given in Table 2.


table 2. Summary of the economic, environmental and social benefits from the investment

 economic                          environmental                      social

 More-effective monitoring of      Improved biodiversity in           Improved knowledge has
 water quality which contributes   waterways due to contribution      enhanced the capacity of
 to efforts to improve water       of more effective monitoring       communities to understand,
 quality                           to restoration and protection      negotiate and make trade-offs
                                   efforts                            between different water uses

 More-efficient water allocation   Improved biodiversity in
 processes through contribution    waterways due to more
 to a scientific and transparent   appropriate water allocation for
 process                           ecological purposes



Examples of the use of outputs from the research, and how the benefits are being delivered,
include the following by SEQ Healthy Waterways and in Queensland water resource planning.




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      seQ Healthy Waterways

      Ongoing monitoring can contribute to the health of waterways. For example, the NSW
      Waterwatch program identifies the following contributions of monitoring to improvements in
      the health of the waterways:

      •    understanding what the water quality problems are and what actions could be taken to
           rectify them

      •    measuring change in the health of waterways over time

      •    demonstrating the benefits of actions such as tree planting and pollution reduction

      •    gathering information to illustrate to others (including government and the community)
           the problems that are occurring

      •    encouraging greater community awareness of environmental problems.

      The use of the outputs from GRU10 with respect to the Healthy Waterways plan in SEQ
      contributes to more-effective monitoring of water quality in SEQ through the availability of
      improved science and techniques.

      In 2003, the freshwater Ecosystem Health Monitoring Program produced report cards for
      each of the catchments in SEQ. This was the third year in which this was undertaken. The
      program’s annual technical report for 2002–03 (EHMP 2004) described the following major
      outcomes of the process:

      •    The majority of report card grades were similar to those from 2002. There had been
           few significant changes over the previous three years, which was considered a positive
           outcome when taking into account drought and continuing urban expansion in the region.

      •    Northern coastal catchments were the healthiest in SEQ.

      •    The current state of the most of the streams in SEQ’s catchments shows the significant
           impact of the last 200 years of settlement.

      •    There will be no significant improvement in some catchments unless major investments
           in riparian restoration are made.

      •    With a continuing increase in population and a subsequent increase in water demand,
           careful future planning is required to prevent further declines in ecosystem health.

      Queensland water resource planning

      The actual benefits, particularly environmental benefits of the water resource planning process,
      will not be evaluated for a number of years. Ongoing assessment programs are being put in place
      to determine if the actual benefits are consistent with the government’s intent (Brian Brycroft,
      pers. comm. 2005). The science, techniques and information developed and collated through
      the three Griffith University projects have contributed to the development of a transparent and
      science-based water resource planning process. Improved transparency and confidence in
      science can lead to greater satisfaction and confidence in decisions by various stakeholders.




290
Quantification of benefits

For the purposes of this analysis, the two benefits described above are quantified:

1.   the contribution of GRU10 to the outcomes of the Healthy Waterways program and in
     particular the Ecosystem Health Monitoring Program in SEQ

2.   the contribution of GRU10 to the environmental water allocation outcomes of the
     Queensland water resource planning process.

It should be recognised, however, that the outputs of the projects, in particular GRU18 and
GRU22, will have made some indirect contribution to environmental allocation process
throughout the remainder of Australia.

seQ Healthy Waterways

The knowledge and techniques developed as part of the three Griffith University projects
contributed to the EHMP which, as described earlier, is one component of the south-east
Queensland Healthy Waterways program.

In order to quantify the benefits of the research, the benefits of the Healthy Waterways
program itself are valued, and then a proportion of those benefits is attributed to the EHMP
and the research’s contribution to EHMP.

A choice modelling study was carried out by the Cooperative Research Centre for Coastal
Zone, Estuary and Waterway Management (Coastal CRC) in order to estimate the willingness
to pay (WTP) for a number of scenarios for water quality improvement in the Bremer River
catchment. The Bremer River is in south east Queensland and flows into the Brisbane River.

A citizen’s jury approach was used to establish whether more resources should be devoted to
improving water quality in the catchment and to determine citizens’ preferences for management
scenarios to improve water quality in the catchment. The members of the jury were asked to
complete a survey to estimate the willingness of the community to pay for improvements in
water quality. The survey asked respondents to comment on four attributes including riparian
vegetation, aquatic vegetation and visual appearance. There was also a monetary attribute which
was described as an additional levy per year on council rates, the proceeds of which would be
quarantined for managing water quality in the catchment (Robinson et al. 2002).

A model was used to estimate the willingness to pay for four different scenarios for improving
water quality. Table 3 presents the results of this analysis. It shows that, for a minimal
improvement in water quality in the Bremer River, jurors are willing to pay $21 per annum. A
minimal improvement includes having 45 per cent of the total length of the streams and rivers
in the catchment with riparian vegetation in moderate or better conditions; having 5 per cent
of the total length of streams and rivers in the catchment with aquatic vegetation in moderate
condition; and having 60 per cent of the total length of the river with good or very good visual
appearance (Robinson et al. 2002).




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      table 3. Willingness to pay (WTP) to improve water quality in the Bremer River

       scenario                            Riparian           aquatic             Visual          WtP ($)
                                       vegetation (% of   vegetation (% of   appearance (%
                                        total length of    total length of   of total length
                                            river)             river)            of river)

       1. Do-nothing (current)                30                 5                 55                0

       2. Minimal improvement                 45                 5                 60               21

       3. Moderate improvement                50                10                 65               36

       4. Substantial improvement             75                20                 75               37

      Source: Robinson et al. (2002.


      For the purposes of this analysis, it is assumed that the Healthy Waterways program has
      contributed to activities that are likely to result in at least a minimal improvement in the water
      quality of rivers and streams in SEQ. For this improvement, households in SEQ are willing
      to pay $21 per annum. The population of SEQ is 2.57 million (Australian Bureau of Statistics
      data 2004) with an average of 2.6 persons per household. This is approximately 989,000
      households. It is assumed that there is a 75% probability that the Healthy Waterways program
      will be successful in achieving the minimal improvement identified.

      The EHMP is assumed to contribute 20% of the outcomes of the Healthy Waterways Program,
      and the Griffith University research outputs are assumed to have contributed 20% to the
      EHMP. The EHMP was implemented in the year ending June 2003. It is assumed there is
      a five-year lag before benefits in the form of improved water quality are evident. Therefore
      the first year of benefits is assumed to be the year ending June 2008. Benefits are assumed
      to take 10 years from June 2008 to reach their maximum level due to the time taken to
      implement the EHMP effectively throughout all of SEQ.

      The use of WTP confuses the issue of whether there should be a time lag of a number of
      years before the benefits of a water quality improvement program are evident. Often, the
      phrasing of the question in the surveys implies that the respondent is ‘willing to pay’ for some
      action that will lead to the eventual benefits. If this is taken literally, then the ‘payment’ or
      ‘benefit’ occurs with implementation of the said action. An alternative viewpoint, is that the
      ‘payment’ or ‘benefit’ should be applied only at some point in the future once the benefit is
      assumed to have occurred.

      For the purposes of this analysis, the benefit is said to be apply when the benefit first
      becomes apparent; that is, the year ending June 2008, a lag of five years.

      These assumptions are summarised in Table 5.




292
Queensland water resource management plans

The value of the Queensland water resource plans is also quantified using a WTP approach,
with a proportion of those benefits attributed to the research outputs produced by the three
Griffith University projects.

Rolfe and Bennett (2004) carried out a study to assess the social values of water allocations.
The study involved surveying a sample of Brisbane households to determine whether or
not they would support proposals to purchase water entitlements and grant them to small
farmers, small townships, environmental groups or Aboriginal communities. The study
focused on the Fitzroy Basin of Queensland. The study has the intention of determining how
the community values the social and economic consequences of water reform with respect
to ensuring equity among potential water users. A contingent valuation survey was used to
assess community preferences for the different equity outcomes.

The basis of the scenario was that, due to the auctioning of water in the Fitzroy Basin as part
of the new water resource plan, the highest bidders and highest value users would have most
access to the water, and therefore some groups might be left out of the process. The scenario
was that water would be allocated to these groups if paid for by taxpayers through a one-off
rates levy.

The results of the survey indicated that the average Brisbane household is willing to pay a
one-off fee of $74.28 to ensure support for the improved equity to the following four groups:

•       small farmers and irrigators who could use extra water for irrigation

•       small townships that would use extra water for urban and industrial purposes

•       environmental groups that would keep water in the river systems

•       Aboriginal groups that would preserve water for their communities and possible future
        development.

The relative support for the different industry groups is shown in Table 4.


table 4. Relative support for different equity groups

    Group                                     Percentage of households giving first priority to:

    Small farmers and landowners                                    59.1

    Small townships                                                 12.5

    Environmental groups                                            18.3

    Aboriginal groups                                                1.1




                                                                                                   293
      As the investment in the three projects contributed to information only on environmental
      water allocation with respect to the water resource planning process, only 18.3% of the one-
      off fee of $74.28 can be viewed as applicable to the projects ($13.59). This figure is assumed to
      represent the WTP for environmental water allocation as part of the water resource planning
      process in Queensland.

      For the purposes of this analysis, it is assumed that the average WTP of $13.59 would be
      applicable to each household in Queensland, and that each household would be willing to pay
      this fee in relation to one water resource plan only. The number of households in Queensland
      is approximately 1.5 million (based on a population of 3.9 million and an Australian average of
      2.6 persons per household).

      The knowledge and processes developed in the three Griffith University projects were only one
      of several factors contributing to the process within the water resource planning process for
      determining appropriate environmental water allocation levels. Other factors include the cost
      and time inputs of the water resource planning process and other scientific contributions.
      Therefore an attribution factor of 15% is applied to the benefits.

      Once again, the issue of when the benefits start to accrue is of concern. In this case, the
      benefit is said to start to accrue with the implementation of the plan. This is because the WTP
      relates to the equity benefit rather than the eventual environmental benefit. The first plan
      using the process described was implemented in 2002–03. It is assumed that all plans are
      implemented by 2009–10.



      summary of assumptions

      A summary of all assumptions made is given in Table 5.


      table 5. Assumptions for the valuation of benefits from the three Griffith University projects

       Variable                       Value                  source

       Healthy Waterways

       Willingness to pay for a       $21 per annum per      Robinson et al. 2002
       minimal improvement in SEQ     household
       waterways

       Probability of minimal         75%                    Agtrans assumption
       improvement being achieved

       Number of households willing   989,000 households     Total number of households in SEQ;
       to pay                                                adapted from Australian Bureau of
                                                             Statistics data for 2004

       Attribution of benefit to      20%                    Agtrans assumption
       Ecosystem Health Monitoring
       Program (EHMP)




294
table 5. (continued)

 Variable                          Value                  source

 Attribution of Griffith           20%                    Agtrans assumption
 University science to EHMP

 Year of first benefit             Year ending June       EHMP commenced in 2002–03 (Healthy
                                   2008                   Waterways website) and assumes a five-
                                                          year lag before benefits are evident

 Number of years until total       10 years               Agtrans assumption regarding number of
 benefit reached                                          years until Healthy Waterways activities
                                                          implemented through entire catchment

 Queensland water resource plans

 Willingness to pay for            $13.59 per household   Adapted from Rolfe and Bennett (2004)
 equitable allocation of water     (one-off fee)
 to the environment

 Number of households willing      1.5 million            Total number of households in
 to pay                            households             Queensland; adapted from Australian
                                                          Bureau of Statistics data for 2004

 Attribution of benefit to GRU10   15%                    Agtrans assumption

 Year of first benefit             2002–03                Year of first plan

 Year all implemented by           2009–10                Year last of the plans is implemented
                                                          (Agtrans assumption)




Results

Table 6 presents the results of the investment analysis. It shows that the net present value
(NPV) is negative when only benefits to 2004–05 are included. When all benefits and costs are
considered, the NPV is positive at $2.09 million. When benefits to LWA only are considered,
the NPV is $1.09 million. Forty-five percent of the benefits are attributable to the SEQ Healthy
Waterways benefit, while the remainder are due to the Queensland water resource planning
benefit. It should be recognised that the outputs of the projects, in particular GRU22, will
have made some indirect contribution to environmental allocation process throughout the
remainder of Australia. Therefore these results can be considered an underestimate of the
potential benefit of the investment.




                                                                                                     295
      table 6. Investment criteria by type of benefit and costs included

       Criterion                                              discount rate 6%

                                          Benefits to date    all benefits and all    Benefits to LWa
                                         only and all costs          costs            and LWa costs

       Present value of benefits ($m)          1.22                  5.17                  2.69

       Present value of costs ($m)             3.08                  3.08                  1.60

       Net present value ($m)                  –1.87                 2.09                  1.09

       Benefit:cost ratio                    0.39 to 1             1.68 to 1             1.68 to 1

       Internal rate of return (%)           negative                10.26                 10.29




      sensitivity analysis

      Due to uncertainties associated with the use of WTP estimates, a sensitivity analysis has been
      carried out on the level of the WTP estimates assumed. Table 7 shows that it the value of both
      WTP estimates is reduced to 25% of its assumed value, then the NPV for the LWA investment
      is negative. If the WTP estimates are increased to 150% of their assumed base value, then the
      NPV increases from $1.09 million to $2.44 million.


      table 7. Sensitivity of investment criteria to WTP estimates (LWA benefits and costs)

       Criterion                                              discount rate 6%

                                          Low value WtP        Base value WtP         High value WtP
                                         estimates 25% of        estimates           estimates 150% of
                                            base value                                   base value

       Present value of benefits ($m)          0.67                  2.69                  4.04

       Present value of costs ($m)             1.60                  1.60                  1.60

       Net present value ($m)                 –0.93                  1.09                  2.44

       Benefit:cost ratio                    0.42 to 1             1.68 to 1             2.52 to 1

       Internal rate of return (%)           Negative               10.29                  13.96




      summary of adoption information

      The three projects analysed in this case study produced scientific knowledge on in-stream
      ecology and its interaction with flow regimes in Queensland waterways; as well as important
      information on a range of allocation techniques for environmental water. The scientific
      knowledge has been widely incorporated in Queensland and elsewhere. Specific examples




296
include its use in the development of the Environmental Health Monitoring Program of the
SEQ Healthy Waterways program; and the incorporation of the science and techniques for
determining environmental flows into the Queensland water resource planning process.

GRU22 produced a number of publications describing and assessing various environmental
allocation techniques and processes. These publications have been widely referenced by
Australian governments, organisations and researchers. Information on other organisations
that have used outputs from the Griffith University projects has not been collated.

In addition, 550 copies have been sold of Freshwater fishes of north-eastern Australia, a book
based on the GRU10 research published by CSIRO.



Conclusions

The body of work produced within these three LWA-funded projects has contributed
significantly to the understanding of environmental flow allocation techniques within
Australia. The precise impact of the projects is difficult to determine, given the large number
of other factors that influence how water is allocated for environmental purposes. The science
has also made a contribution to water monitoring techniques in south-east Queensland.



acknowledgments

•    Angela Arthington, Griffith University

•    Brian Bycroft, Queensland Department of Natural Resources and Mines



References

Arthington, A.H. (1998). Comparative evaluation of environmental flow assessment techniques:
     review of holistic methodologies. Occasional Paper 26/98, LWRRDC, Canberra.

Arthington, A.H., Brizga, B.J. and Kennard, M.J. (1998b). Comparative evaluation of environmental
     flow assessment techniques: best practice framework. Occasional Paper 25/98, LWRRDC,
     Canberra.

Arthington, A.H., Pusey, B.J., Brizga, S.O., McCosker, R.O., Bunn, S.E. and Growns, I.O. (1998a).
     Comparative evaluation of environmental flow assessment techniques: R&D requirements.
     Occasional Paper 24/98, LWRRDC, Canberra.

Arthington, A.H. and Zalucki, J.M., Eds (1998). Comparative evaluation of environmental flow
     assessment: review of methods. Occasional Paper 27/98, LWRRDC, Canberra.




                                                                                                    297
      Brizga, S.O., Arthington, A.H., Pusey, B.J., Kennard, M.J., Mackay, S.J., Werren, G.L., Craigie, N.M.
           and Choy, S.J. (2002). Benchmarking, a ‘top-down’ methodology for assessing environmental
           flows in Australian rivers. In: ‘Environmental flows for river systems, an international
           working conference on assessment and implementation, incorporating the 4th International
           Ecohydraulics Symposium’. Conference Proceedings. Southern Waters, Cape Town, South
           Africa, 32 pp.

      EHMP (Ecosystem Health Monitoring Program) (2004). Annual technical report 2002–2003.
         Moreton Bay Waterways and Catchment Partnership, Brisbane.

      Quinlan, R., Arthington, A. and Brizga, S. (2004). Benchmarking, a ‘top-down’ methodology
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          Conservation Council, April 2004.

      Robinson, J., Clouston, B. and Suh, J. (2002). Using a citizens’ jury to estimate preferences
          for water quality improvements: a case study on the Bremer River catchment, south east
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      Rolfe, J. and Bennett, J. (2004). Assessing social values of water allocations with the contingent
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      The following publications were developed out of the three projects and provide further information
           on the research:

      Arthington, A.H. (1998). Comparative evaluation of environmental flow assessment techniques:
           review of holistic methodologies. Occasional Paper 26/98, LWRRDC, Canberra.

      Arthington, A.H., Brizga, S.O., Choy, S.C., Kennard, M.J., Mackay, S.J., McCosker, R.O., Ruffini,
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      Arthington, A.H. and Lloyd, R., Eds (1998). Logan River trial of the building block methodology for
           assessing environmental flow requirements: workshop report. Centre for Catchment and
           In-Stream Research and Department of Natural Resources, Brisbane, Queensland. (ISBN 0
           86857 775 8)

      Arthington, A.H. and Long, G.C., Eds (1997). Logan River trial of the building block methodology for
           assessing environmental flow requirements: background papers. Centre for Catchment and
           In-Stream Research and Department of Natural Resources, Brisbane, Queensland. (ISBN 0
           86857 772 3)

      Arthington, A.H., Lorenzen, K., Pusey, B.J., Abell, R., Halls, A., Winemiller, K.O., Arrington, D.A.
           and Baran, E. (2004). River fisheries: ecological basis for management and conservation. In
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           Management of Large Rivers for Fisheries, Volume I’. FAO Regional Office for Asia and the
           Pacific, Bangkok, Thailand. RAP Publication 2004/16, pp. 21–60.

      Arthington, A.H. and B.J. Pusey (2003). Flow restoration and protection in Australian rivers. River
           Research and Applications, 19(5–6), 377–395.

      Arthington, A.H., Pusey, B.J., Brizga, S.O., McCosker, R.O., Bunn, S.E. and Growns, I.O. (1998a).
           Comparative evaluation of environmental flow assessment techniques: R&D requirements.
           Occasional Paper 24/98, LWRRDC, Canberra.




298
Arthington, A.H., Rall, J.L., Kennard, M.J. and Pusey, B.J. (2003). Environmental flow requirements
     of fish in Lesotho Rivers using the DRIFT methodology. River Research and Applications
     19(5–9), 641–666.

Arthington, A.H., Tharme, R., Brizga, S.O., Pusey, B.J. and Kennard, M.J. (2004). Environmental
     flow assessment with emphasis on holistic methodologies. In Welcomme, R. and Petr, T., Eds,
     ‘Proceedings of the Second International Symposium on the Management of Large Rivers for
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Barnes, D. and Arthington, A.H. (2002). An early test of the Water Act 2000 (Qld): Burnett Dam
    as a case history. Proceedings of the 4th Australasian Natural Resources Law & Policy
    Conference, pp. 68–80.

Bunn, S.E. and Arthington, A.H. (2002). Basic principles and consequences of altered hydrological
    regimes for aquatic biodiversity. Environmental Management, 30, 492–507.

Close, P.G., Pusey, B.J. and Arthington, A.H. (2005). Larval description of the sympatric species,
    Craterocephalus stercusmuscarum stercusmuscarum (Pisces: Atherinidae) and Mogurnda
    adspersa (Pisces: Eleotridae) from tropical streams of north-east Queensland, Australia.
    Journal of Fish Biology, 66(3), 668–684.

Kennard, M.J., Arthington, A.H. and Pusey, B.J. (2005). Alien fish as indicators of stream health.
    Freshwater Biology, 50, 174–193.

Mackay, S.J., Arthington, A.H., Kennard, M.J. and Pusey, B.J. (2003). Spatial variation in the
   distribution and abundance of submersed aquatic macrophytes in an Australian subtropical
   river. Aquatic Botany, 77, 169–186.

Poff, N.L., Allan, J.D., Palmer, M.A., Hart, D.D., Richter, B.D., Arthington, A.H., Meyer, J.L.,
     Stanford, J.A. and Rogers, K.H. (2003). River flows and water wars: emerging science for
     environmental decision-making. Frontiers in Ecology and the Environment, 1(6), 298–306.

Pusey, B.J., Arthington, A.H., Bird, J. and Close, P.G. (2001). Reproduction in three species of
    rainbowfishes (Melanotaeniidae) from rainforest streams in north-eastern Queensland,
    Australia. Ecology of Freshwater Fish, 10, 75–87.

Pusey, B.J., Arthington, A.H. and Kennard, M.J. (2004). Hydrologic regime and its influence on
    broad-scale patterns of fish biodiversity in north-eastern Australian rivers. In ‘Proceedings
    of the Fifth International Symposium on Ecohydraulics. Aquatic Habitats, Analysis and
    Restoration’, Madrid, Spain, pp. 75–81.

Pusey, B.J., Arthington, A.H. and Read, M.G. (1998). Freshwater fishes of the Burdekin River,
    Australia: biogeography, history and spatial variation in assemblage structure. Environmental
    Biology of Fishes, 53(3), 303–318.

Pusey, B.J., Close, P.G., Arthington, A.H. and Bird, J. (2002). Larval fishes in rainforest streams:
    recruitment and microhabitat use. Proceedings of the Royal Society of Queensland, 110,
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Pusey, B.J., Kennard, M.J. and Arthington, A.H. (2000). Discharge variability and the development
    of predictive models relating stream fish assemblage structure to habitat in north-eastern
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Pusey, B.J., Kennard, M.J. and Arthington, A.H. (2004). Freshwater fishes of north-eastern
    Australia. CSIRO Publishing, Collingwood, Victoria, 684 pp.




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Description: Ecological basis for river habitat and in-stream flow management