The Economics of Catchment Management

This paper aims to introduce and provide examples of some of the key economic concepts relevant to the economic evaluation of water resources and fisheries. The paper begins with a discussion of the notion of the value of an environmental resource and describes a number of different definitions that have been proposed for this concept. It also briefly describes how measures of these concepts can be derived in practice. The authors show that one approach the net economic impact method has usually been used up to now in Irish studies and they argue that conditions have now changed in a manner which make it appropriate to consider other approaches such as those based on the valuing the anglers' satisfaction by means of notions such as that of consumer surplus. Next, it considers the conditions necessary for the maximisation of value and argues that this is attained when the marginal return from each competing use are brought into equality. The paper concludes by examining some of the issues which arise in implementing economic concepts. As an example, a simple model is presented which helps illuminate the economic issues underlying a key problem in Irish salmon fisheries: how to share the available catch between recreational and commercial fisheries. The information requirements for measuring economic value are briefly discussed.