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LITERATURE REVIEW OF BIOECONOMIC IMPACTS
OF POLLUTANTS AFFECTING MARINE PARK
ENVIRONMENTS
Report Prepared by the Centre for Agricultural & Regional Economics Pty Ltd for the NSW Office of Environment and Heritage
Disclaimer
This report was prepared by the Centre for Agricultural and Regional Economics Pty Ltd in good faith exercising all due care and attention, but no representation or warranty, express or implied, is made as to the relevance, accuracy, completeness or fitness for purpose of this document in respect of any particular user’s circumstances. Users of this document should satisfy themselves concerning its application to, and where necessary seek expert advice in respect of, their situation. The views expressed within are not necessarily the views of the NSW Office of Environment and Heritage (OEH) and may not represent OEH policy. © Copyright State of NSW and the Office of Environment and Heritage iii

Executive Summary
Pollution originating from diffuse and point sources may impact negatively on marine environments, including marine parks. This can have undesirable economic consequences for use and non‐use values, both within and outside the reserved area. Bioeconomic modelling, where the biophysical and economic components of the marine system are explicitly represented and linked is one method for assessing the ecological and economic outcomes of pollution. Models can be used to determine the magnitude of economic impacts, provide insights into cost‐effective pollution abatement options, help to measure the effectiveness of marine reserves as a buffer against pollution shocks, and examine optimal levels of pollution abatement.

This report provides a literature review of studies that may help inform future bioeconomic modelling of pollution in NSW marine parks. Due to the limited number of Australian studies directly related to this topic (and most of those are focussed on the Great Barrier Reef), a range of other relevant studies are discussed. Many of these are from overseas, or examine different but related issues (especially fisheries management and marine parks). These studies include modelling parts of marine systems (e.g. species population dynamics in the face of external shocks) which could be adapted to bioeconomic modelling of pollution. Some key factors emerging from the literature review include:  Most Australian bioeconomic modelling studies of marine pollution have been performed in the Great Barrier Reef (GBR) region, and investigate the impact of diffuse‐source pollution from agricultural and urban run‐off on the reef. While this has some relevance to NSW marine parks, reef‐based economic activity in NSW is limited, and the marine environment lacks the GBR lagoon which tends to capture and concentrate river plumes. Moreover, NSW rainfall events are usually less intense and mixing of the run‐off more rapid in heavy seas. Hence NSW marine parks are unlikely to be subject to the steadily rising levels of nutrients that are found in the GBR lagoon (Peter Davies, personal communication 2011).  Some models are true bioeconomic models as the biological and economic components are directly linked, and feedback can occur between the various model elements. Other models consist of separate biological and economic components, where the output from the biological model becomes an input to the economic model, but no direct feedback occurs;

 Other models estimate the magnitude of pollution and attach an economic impact to the pollution event without explicitly modelling the ecological system ( for example using survey data to elicit tourism demand changes as water quality declines);

 The decision about where to set the system boundary in the modelling emerges in the literature. Often, factors which appear to be outside the system can have iv
important feedback effects within the system and decisions need to be made regarding resources, model complexity and ‘where to draw the line’; ...
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