Developing an economic quality assessment framework and applying it to water economic studies in the Murray-Darling Basin

Increasing environmental problems and future climate change projections necessitate the need for changing water reallocation in many countries, and hence pose considerable trade-offs and policy challenges. Water reallocation is often mired in policy debate and the socio-economic impacts on affected communities, with many differing views and studies on the type and size of the impact. The debate over the impacts of reduced consumptive water diversions in the Murray-Darling Basin (MDB) over the past 15 years provides an apt case example of arguments over socioeconomic impacts, with policymakers often unable to distinguish between unreliable and reliable economic impacts. In order to help judge study quality, we developed a rigorous economic quality assessment framework (EQAF). This framework was then applied in a systematic review of quantitative (theoretical and empirical) economic studies of water reduction and reallocation in the MDB. The quality assessment allowed the classification of studies into low, medium and high quality. Results reveal that studies predicting significant negative impacts from reduced MDB water diversions were generally rated as low quality. In contrast, studies predicting smaller impact were more likely to be rated high quality, because they accounted for adaptation and feedback loops. The EQAF system can be applied in many other contexts, but will be especially useful in areas of disputed predicted outcomes. Our review provides five recommendations, and emphasised in particular the need for quality control, and more assessment of causality issues within water recovery analyses, and the importance of, wherever possible, accounting for all confounders in influencing community outcomes.