7. Discussion and conclusions
Existing information on the likely environmental impacts of water resource development points to quite variable impacts in the Waitaki Catchment. Beyond this observation, it is difficult to draw any firm conclusions other than: (a) environmental impacts differ across irrigation and hydro-electricity development; (b) little is known about the qualitative impact of water resource development on changes in the environment that could possibly impact non-use/existence values; and (c) even in a qualitative sense, it is not possible to summarise the net impact of each alternative on the flow of environmental services. In the absence of this information the prospect of misallocating a scarce water resource remains a distinct possibility.
Even allowing for possible inaccuracy, change in TEV estimates derived for the Kawarau River indicate that people from all over New Zealand placed significant values on protection of the natural environment. For the Kawarau case, non-market values amounting to hundreds of millions of dollars per year send a clear signal that non-market impacts can be of sufficient magnitude to cause otherwise financially viable developments to fail a cost benefit test. Very few of the respondents to the Kawarau study would have engaged in active recreation on the river (fishing, white water rafting, goldmining, etc), although many would have travelled along the highway traversing the section of the river that would have been affected by the proposed hydro-electricity development. Such travellers would have considered the aesthetic effects of the development - a type of use value. Even so, magnitudes of use value estimates from other New Zealand non-market valuation studies indicate that non-use impacts are likely to have been the source of a very large proportion of estimated change in TEV for the Kawarau case.
Could the Waitaki catchment have TEV of similar magnitude to the Kawarau? That depends on the nature of any proposed changes in the Waitaki Catchment, people's awareness of the Waitaki Catchment's attributes, and their attachment to them. The Kawarau River hydro-electricity development proposals concentrated development within a rugged, narrow river corridor containing obvious historic artefacts beside a state highway in an area receiving high visitor usage from across the country. Some potential developments in the Waitaki Catchment might be less obvious and less important.
Existing studies indicate that New Zealand residents can place high value on protection of the natural environment. Study design limitations ensure that it is not always possible to separate use and non-use values, but mean total economic value changes estimated for various management interventions for braided Canterbury rivers falls in the order of $60 per household per year. Where separate values have been obtained, non-use values appear to be substantial.
If recreational use values are in the order of $2 million per annum, this capitalises into $20 million (at a 10% discount rate) or $40 million (at a 5% discount rate) (Kerr, 2004). The relative magnitude of upper catchment recreational benefits is not known, principally because of the absence of information on recreational activity levels. The complete loss of all recreational opportunities on the lower Waitaki would result in costs of about $2 million per annum from reduced use values.
In general, people place higher value on natural environments that are functioning well, are not polluted, and/or support rare or endangered species. Reductions in water quality in the Waitaki Catchment, for example from agricultural runoff or community sewage discharges, would be likely to reduce existence values (and may also affect recreational use values). Changes in biodiversity can have significant existence value impacts. Impacts on endangered species, such as the black stilt or the wry-billed plover, have the potential to produce significant impacts on existence values.
