Integrated economic valuation of braided river management in New Zealand

Abstract

The Agribusiness and Economics Research Unit at Lincoln University, in collaboration with Lincoln Agritech Ltd and the National Institute of Water and Atmospheric Research, with support of the Science Team and Stakeholders Group of the Subsurface Processes in Braided Rivers Endeavour research programme, have conducted an economic valuation exercise of braided river management options for the Wairau river in Marlborough and the Ngaruroro river in the Hawkes Bay.

• The valuation exercise comprised two workstreams, one on market value effects, and the other on non-market value effects focused on public preferences for environmental outcomes.

• Valuation was based on management scenarios developed with regional councils in case study regions and described changes in riverbed depth and changes braidplain width.

• The approach to valuing market values involved an analysis of:

o Ongoing gravel extraction at the river o One-off gravel extraction at the river (as the river is widened) o Construction and moving of stop banks along river corridor o Surrender of land in proposed widening stretch o Potential for inundation in low-lying land around the study reach o Change in potential water for irrigation in areas supplied by the river

• The economic non-market valuation method of Choice Experiments was used to value changes in:

o Ecological quality, o Native and sports fish habitat o Bird habitat quality

Market Impacts Valuation Component

o Bed raising scenarios implied a cessation of gravel extraction for between 25-80 years depending on the scenarios, while bed lowering implied increased extraction for between 25-40 years. The bed raising scenarios were also expected to cause inundation of some river-adjacent productive lands. The Costing of stopbank raising in the study reaches for maintaining current levels of flood protection were also considered.

o Widening scenarios involved costing the purchase of impacted land alongside the study reaches as well as the costs of moving and creating additional stopbanks where necessary in the study reaches. One-off amounts of gravel extraction from the previous areas of berm were also valued.

o Negative impacts on reliability of irrigation for irrigators linked to the river were considered for the bed lowering scenarios. These impacts were considered in the metric of probability of days on restriction by month, informed by a hypothetical groundwater level threshold.

o Bed raising and widening scenarios were expected to have beneficial or neutral impacts on irrigation. No additional potential for new irrigation takes were considered.

Non-market Environmental Valuation Component

o This report details the development and application of the Choice Experiment used to identify and measure public preferences for changes in braided river ecology in the case study rivers. The Choice Experiment method was the primary tool employed to determine, in economic terms, the value of some of the non-market ecological outcomes associated with changes in braidplain width, and riverbed elevation, in case study reaches of the Ngaruroro and Wairau rivers. o Preferences identified from the Choice Experiment were combined with quantification of the biophysical impacts of management scenarios assessed using a Delphi survey process with NIWA freshwater ecologists.

o The Choice Experiment applied to resident’s river management preferences involved presenting respondents with a set of hypothetical scenarios, each containing different combinations of river management alternatives, costs, and outcomes. Participants are asked to choose their preferred option in each scenario, allowing researchers to analyse the trade-offs and preferences respondents make regarding river ecology management, and cost implications. o The Choice Experiment attributes were determined from a Delphi questionnaire process with freshwater ecologists from NIWA and case study site Regional Councils based on braidplain width and riverbed elevation change scenarios. In the Delphi questionnaire, participants were asked for their expert opinion on how changes in the width and bed-level of the two case study river reaches (depicted in an online story board and information pack) related to changes in:

▪ Benthic ecology (periphyton and invertebrates) ▪ Native fish ▪ Sport fish ▪ Freshwater birds ▪ Terrestrial invertebrates

o For each scenario and outcome, respondents indicated whether they thought that the outcome would either decrease, be the same, or increase. Three areas of impact or probable quality benefits were identified as the ‘outcome attributes’ of river management that would be relevant in the context of a national level survey. Summarising the Delphi findings these are:

Ecological Quality: Deeper channels are more likely to be associated with decreases in ecological quality. Shallower channels are more likely to be associated with increases in ecological quality. Wider braidplains are more likely to be associated with increases in ecological quality.

Fish habitat: Shallower channels are more likely to be associated with increases in habitat more suited to native fish. Wider braidplains are more likely to be associated with increases in habitat more suited to native fish. Deeper channels are more likely to be associated with increases in habitat more suited to sports fish.

Bird habitat: Shallower channels are more likely to be associated with increases in the quality of bird habitat. Wider braidplains are more likely to be associated with increases in the quality of bird habitat.

o Based on Delphi results, and Cognitive Interviews with members of the public, the management attributes selected for inclusion in the Choice Experiment were:

▪ The percentage of river with Poor/Fair/Good ecological quality.

▪ The percentage of river habitat favouring Sport/Native fish.

▪ The percentage of river with Poor/Fair/Good habitat for birds.

▪ A yearly cost to for river management activities.

o A Latent Class Model was estimated to analyse respondent choices and to estimate the value of management outcomes to members of the public. We calculated the regional level non-market value of changes in the quality of river ecology, bird habitat, and fish habitat to members in the public resultant from river management options.

Net Present Values associated with River Management Scenarios

o The results from the valuation exercise for the Ngaruroro indicate that the bed raising scenarios will overall have market costs but larger non-market benefits. The widening scenarios are expected to have overall benefits, both market and non-market. The bed lowering scenario in the Ngaruroro has a negative outcome on environmental values as well as very high market costs (primarily driven by the impact on irrigation in the region).

o Results from the valuation exercise for the Wairau indicate that the bed raising scenario implies positive environmental benefits but is a net cost when including the market costs (largely associated with stopbank management). Although potential benefits for reliability of supply for irrigators and enhanced spring flows were not considered. While the bed lowering scenario has both negative environmental impacts and high net market costs. Both widening scenarios for the Wairau are associated with positive values across the market and non-market valuations, albeit with the maximum widening scenario implying net market costs as the benefits from additional gravel extraction are outweighed by the costs of land and stopbank management.