Valuing reductions in water extractions from groundwater basins with benefit transfer: The Great Artesian Basin in Australia

The management of groundwater to generate net community benefits is challenging because of the complexity of impacts that can be involved, the varying interests of different stakeholder groups, time lags between changes in extraction rates and aquifer levels, and the level of technical and scientific uncertainty. In an economic framework, decisions about conserving groundwater reserves by limiting extraction rates should be made by comparing the benefits of conservation activities with the associated costs. However, limited information about benefits and costs makes it difficult to apply a benefit-cost framework to issues of groundwater management. This can be addressed to some extent by sourcing nonmarket values from other studies in a benefit transfer process. In this paper, benefit transfer techniques are applied to an evaluation case study about limiting extractions from the Great Artesian Basin in Australia. The results demonstrate some of the issues with the benefit transfer approach and confirm that the publicly funded bore capping program in Australia has been delivering net benefits to the community.