Use of economic instruments in management of Rotorua geothermal field, New Zealand

Abstract

Increased fluid draw-off from shallow geothermal aquifers by commercial and domestic users, between about 1950 and 1985, resulted in a progressive decline in natural thermal activity in Rotorua geothermal field. In 1986, a controversial bore closure programme and charges for fluid use were implemented by central government to reverse the decline. In 1991, Environment Bay of Plenty (B.O.P.) (regional government) was allocated responsibility for management of the field and further economic instruments were instituted, such as a reinjection credit scheme. In addition, a regional plan was formulated, which included no increase in total mass abstraction. These bold measures have been successful. Total geothermal fluid withdrawal was reduced from 29.0 (1985) to 9.5 kt/d (1988), and net withdrawal from 27.5 to 2.9 kt/d. Shallow water levels in the geothermal aquifer have risen by up to 2 m, and many natural geothermal features are recovering. However, the measures have had social costs: average family and elderly users have found it difficult to take advantage of the economic instruments, and there has been a shift from domestic to commercial use.