How Holistic Should Economic Measurement Be? A Cautionary Note on Valuing Ecosystem Services as Part of the Murray-Darling Basin Plan

Abstract

In this article, I explore the challenges associated with adopting a broad and potentially inconsistent perspective in the formulation of particular policy choices. The setting for this discussion is the controversial Murray–Darling Basin Plan. The motivation for this article has been the decision by the Murray–Darling Basin Authority to sponsor research work that will attempt to value the ecosystem services of the Murray–Darling Basin and use this to further inform the Basin Plan. The Basin is an area of considerable ecological diversity spanning more than one million square kilometres and occupying about 14 per cent of the Australian land mass. I focus partly on the challenges of the valuation exercise, but endeavour to analyse the wider question of so-called “holistic” measurement. I also attempt to predict how this type of information might be used by policy makers to assess the overall usefulness of the valuation study.