Applicability of market-based instruments for safeguarding water quality in coastal waterways: Case study for Darwin Harbour, Australia

- An overview of the use of MBIs is given in the area of water pollution control.
- The diagnostic summary of the water quality situation in Darwin Harbour is given.
- A framework for contextualizing MBIs is given.
- MBIs are examined for potential applicability in Darwin Harbour.
- Several MBIs are relevant for water quality management in Darwin Harbour.

SummaryWater pollution of coastal waterways is a complex problem due to the cocktail of pollutants and multiplicity of polluters involved and pollution characteristics. Pollution control therefore requires a combination of policy instruments. This paper examines the applicability of market-based instruments to achieve effective and efficient water quality management in Darwin Harbour, Northern Territory, Australia. Potential applicability of instruments is examined in the context of biophysical and economic pollution characteristics, and experience with instruments elsewhere. The paper concludes that there is potential for inclusion of market-based instruments as part of an instrument mix to safeguard water quality in Darwin Harbour. It recommends, in particular, expanding the existing licencing system to include quantitative pollution limits for all significant point polluters; comprehensive and independent pollution monitoring across Darwin Harbour; public disclosure of water quality and emissions data; positive incentives for landholders in the Darwin Harbour catchment to improve land management practices; a stormwater offset program for greenfield urban developments; adoption of performance bonds for developments and operations which pose a substantial risk to water quality, including port expansion and dredging; and detailed consideration of a bubble licensing scheme for nutrient pollution. The paper offers an analytical framework for policy makers and resource managers tasked with water quality management in coastal waterways elsewhere in Australia and globally, and helps to scan for MBIs suitable in any given environmental management situation.