The economics of time delayed salinity impact management in the River Murray

Drainage from irrigation along the River Murray causes rising levels of saline discharge to the river and floodplains with adverse impacts including crop, water infrastructure and floodplain ecological health damage. These salinity impacts of drainage are time delayed by up to several decades. Investment in engineering infrastructure to pump saline water away from the river to evaporation basins has been a significant feature of public policy to address the issue. This article evaluates the costs and benefits of further engineering investments to offset expected future salinity growth. The analysis involves an integer programming optimization model that explicitly accounts for salinity impact time delays in benefit, cost accounting considering a long term, 100 year time horizon. A lower bound salinity growth scenario is evaluated involving increasingly efficient irrigation and further new irrigation development at locations where salinity impacts are comparatively small. This is compared to an upper bound salinity growth scenario with static irrigation efficiency and new irrigation development in high salinity impact areas. It is concluded that if conditions leading to the upper bound salinity growth scenario can not be avoided in the near term, the marginal costs of offsetting future salinity growth with additional engineering investment will exceed the marginal benefits several decades hence.