BREC Proposes 120 Million Dollar
Catchment Protection Revenue Bond for SEQ
December 7th 1998
BREC proposes that the Brisbane River Management Group, Queensland Treasury Corporation, Brisbane Water and the South East Queensland Water Board investigates the float of a $120 million bond issue for water catchment protection. Industries in SEQ will gain a sustainable internationally competitive advantage through being able to have a secure source of high quality water. The Bond would also create sustainable jobs in hard hit rural areas of SEQ.
This money could then be used to pay existing land managers in areas up stream of Wivenhoe and Somerset dams to manage their lands to improve and maintain water quality in the dams.
This type of Bond has been used to good effect in the USA where the State of New York floated a 1.6 billion bond for similar objectives in 1996.
Initial research has indicated that land managers could be paid between $20-$50 per hectare annually to either modify or maintain current land uses.
1. The cost of additional water treatment plants in the South East Queensland region is estimated at least $250 million over the next 5-10 years. Factors driving this increase include population growth, declining water quality in the upper catchments of the regions rivers and public demand for improved water quality following the Sydney Giardia and Cryptosporidia outbreaks and continuing problems with blue-green algae.
2. US experience suggests that a major part of these costs could be deferred or avoided by a program of catchment husbandry aimed at improving the quality of water entering the regions river systems. Such a program would involve managing marginal land used for cropping or grazing to reduce nutrient loads, fencing waterways to control stock access, revegetation to reduce sedimentation and, possibly, subsidies to improve municipal or residential and agricultural waste disposal systems. As an indicator of the possible level of economic benefits, the New York Department of environment and conservation estimates that an expenditure of US$1.5 billion in catchment management has allowed the City of New York to cancel proposed water treatment plants with an estimated cost of US$6.7 billion.
3. It is believed that such a program could be enacted through the infrastructure agreement provisions of the Integrated Planning Act with directives placed on the use of land and appropriate compensation paid for earnings foregone. Based on US experience, it is believed that such a program could be enacted on a voluntary basis.
4. It is proposed that a possible funding mechanism for such a program would be through a bond issue managed by Queensland Treasury on behalf of Brisbane Water. Preliminary discussions with both organisations suggest that, subject to detailed feasibility studies, there is, as yet, no in-principle opposition to such a proposal. Initial conversations with BRMG, DNR and Local Governments in the affected catchments have been generally positive.
5. It is proposed that the next step in developing this concept would be a feasibility study to quantify likely cost and benefits. This would include identifying the area of land to which the proposed measures would need to apply to produce the desired improvement in water quality and indications of the likely cost.