1. Background
The Waitaki Catchment is a major water resource in the New Zealand context. It provides a significant part of New Zealand's energy requirements, but also supports irrigation, recreation and natural values. The demands on the river are sometimes competing, but sometimes complementary, and its management requires a sophisticated understanding of the values involved. The management of the Waitaki has come under increasing pressure with a number of consent applications for development using the water resource.
In order to improve the management of the resource, the Government has passed the Resource Management (Waitaki Catchment) Amendment Act which provides for the establishment of the Waitaki Catchment Water Allocation Board. The Board will develop a regional plan for water allocation from the catchment. Once the plan has been developed, Environment Canterbury will consider the individual consent applications and make allocations in accordance with the plan. Plan preparation requires information on the economic, environmental and social impacts of development in the catchment to assist in decision making.
In September 2003 the Ministry of Economic Development commissioned Sinclair Knight Merz (SKM) to undertake a study into the costs and benefits of water use in the Waitaki Catchment. The study was aimed primarily at understanding the impacts of the different competing uses for the water in the catchment, including the proposed Project Aqua. SKM reported national level costs and benefits for seven allocation options, comparing them with a base case development scenario.
The Ministry for the Environment (MfE) commissioned this complementary study to address the regional social and economic benefits. The aim of this study is to illustrate how the regional benefits and costs differ from the national costs and benefits. Of particular interest is extending the results to understand matters such as distributional impacts of the costs and benefits, and social impacts of different water uses.
This study is an analysis of the various allocation scenarios from the Waitaki from the region's point of view. The region is defined as North Otago and South Canterbury, covering the Waitaki District Council, Waimate District Council, Mackenzie District Council and Timaru District Council areas. The report comprises regional cost benefit analysis and a regional economic impact analysis for the seven main development scenarios used by SKM.
The scenarios addressed were:
- base case
- New Hydro with no additional irrigation (1)
- all possible irrigation demands without New Hydro (2)
- all irrigation demands with an internal rate of return greater than 5% without New Hydro (3)
- New Hydro integrated with proposed irrigation development downstream of the Waitaki Dam (4)
- additional irrigation above the Waitaki Dam upstream of Tekapo (5), upstream of Ohau (6) and upstream of Benmore (7).
The scenarios use existing proposals for hydro and irrigation development as a basis for estimating costs and benefits. In the case of the New Hydro scenario, the example costs and benefits were based on the costs and impact stream generated during investigation of Project Aqua. As Project Aqua is no longer proceeding it is likely that the final format of any hydro development will be different from that of Project Aqua. The New Hydro scenario should therefore be considered an example of a hydro scheme, rather than a definitive case of how hydro would develop.
