IWRA Proceedings

[Please note that this paper will be published in a journal elsewhere and therefore we are unable to provide the full version. The presentation at the World Water Congress, however, will include all dimensions of the full paper including all of the key findings.]

Key words: Ecosystem services, environmental valuation, drought mitigation and adaptation.

Introduction

The Intergovernmental Panel on Climate Change (IPCC) predicts that arid and semi-arid regions will experience increased temperature, reduced rainfall and less snowmelt runoff as a result of climate change. The intensity and frequency of droughts is also expected to increase. Droughts are anticipated to be the most costly consequence of climate change. Estimating the economic value of ecosystem service loss arising from drought is critical for informing drought mitigation policy and vulnerability assessments. Furthermore, assigning economic value to ecosystem services not traded in the market place provides an economic basis for formulating sustainable water diversion policy thereby insuring adequate base and environmental river flows in times of drought. A consistent methodology for such estimation has, however, been elusive. In this paper, we develop an ecosystem service approach to estimating the value of ecosystem service loss resulting from drought. With South Australia’s Murray-Darling Basin recently emerging from the most severe drought in recorded history, this natural experiment is used to estimate the value of river-flow related ecosystem services. What follows is a brief overview of the ecosystem service approach, a synopsis of key results and concluding commentary.