17. Evaluation of Salinity Offset Programs in Australia

This chapter provides an ex-post policy evaluation of three offsetting programs designed to mitigate irrigation induced salinity in Australia. Environmental effects from salinity are substantial in Australia, with the estimated cost of environmental degradation due to salinity of some A$300 million per year. Offsetting, as an economic policy instrument, is cost-effective in comparison to the conventional regulatory approaches (e.g. engineering approaches or mandate based policies) as it allows environmental improvement to be achieved at reduced cost. Salinity offsets are designed to compensate for salinity impacts from a given agricultural activity by providing a commensurate reduction of salinity impact elsewhere. Policy evaluation of salinity offsetting programs was approached by collecting, collating and processing data pertinent to three Australian case studies. A key finding is that salinity offsets in Australia have been reasonably successful since their implementation. While it was not possible to precisely discern the environmental effectiveness of the offsetting programs, there is clear evidence that the salinity problem has subsided in Australia in the time since the introduction of the offsets, and that they can be at least partly credited for this outcome. At the same time, robust findings about the economic effectiveness of salinity offsetting programs emerged from the study.