Avoided costs associated with irrigatiol1 scheme developments are difficult to quantify. The difficulty ill quantifying avoided costs arises, in part, from the nature of irrigation development. The direct benefits from changes in agricultural production are often large and the development themselves can impact on land use and management practices. In addition, there is considerable uncertainty related to these potential changes.
In irrigation schemes, avoided costs can arise though the mitigation of drought effects. Proponents of irrigation development, in Australia, strongly promote drought mitigation as a primary benefit of water resource development. The impact of avoided costs, such as drought mitigation, is often not being examined as part of irrigation scheme development project assessments.
This thesis describes the development and use of a method to estimate drought mitigation effects within the cost-benefit analysis framework. The thesis draws on the cost-benefit analysis literature relating to estimates of avoided costs associated with flood mitigation. In order to identify and determil1e the potential importance of drought Initigatiol1 effects a survey was undertaken in the Piol1eer Valley within the Mackay district, Queensland. The impacts of drought mitigation effects on cost benefit analysis outcomes were examined through an analysis of a representative irrigation development scheme.
This thesis contends that there are often competing objectives associated with irrigation scheme development. It is proposed tl1at the estimation of drought mitigation effects within the cost-benefit analysis framework: can provide valuable information to decision makers and assist in clarifying policy objectives associated with irrigation scheme development.