Tasmania's wild rivers - mighty, free and full of poo?

Happy New Year!

My girlfriend and I have just returned from a great break in Tasmania. We stayed in Hobart most of the time with some side-trips across to the West Coast and down to the Huon Valley. We walked through the signature rainforests – huon pine, celery-top pine, sassafras and huge cool climate eucalypts such as the swamp gum – and crossed or travelled up the Huon, Franklin, Derwent and Gordon rivers and the huge Macquarie Harbour. Most of these rivers are a dark cola brown from the tannins from buttongrass on the highland plains at the rivers’ sources.

A little tragically, I was on the lookout for a hot environmental issue to write about here. Given Tasmania’s reputation for pristine wilderness and clean mighty rivers, it surprised me that the big issue in the news at the time was not old-growth logging or the cancer decimating Tasmanian devil population, but the fact that Tasmania’s main river – the Derwent – is not safe for swimming:

Public health authorities have welcomed efforts by the Hobart City Council to pinpoint what has polluted a popular swimming spot on the River Derwent. People are being advised not to swim at the Sandy Bay beach until further notice, because of faecal contamination.

Director of public health, Roscoe Taylor, says people risk contracting gastroenteritis, skin infections or respiratory disorders if they swim at the city end of Nutgrove Beach. He says it is hoped the beach will be safe by next summer but other beaches on the Derwent are more problematic. "It's very doubtful that Cornelian Bay will be up to swimming standard for quite a long time," he said.

The UN’s Atlas of the Oceans has this to say about the Derwent river estuary:

Named after the Celtic word 'clear water' in 1794 the Derwent estuary population has since grown substantially and now boasts 40% of Tasmania's population along its periphery. The estuary is an important and productive area with a variety of habitats including areas of wetlands, intertidal flats, kelp beds, seagrasses and rocky reefs that support a wide range of species, including black swans, oyster catchers, migratory bird species, penguins, dolphins and seals, platypus and seadragons [and] the critically endangered Spotted handfish...

As with many estuaries, local population growth has occurred resulting in estuary waters being used more and more for recreation, industry and marine transport. The upstream Derwent river provides the majority of the regions drinking water and is a source of energy via hydroelectric power stations. However these activities take their toll. Sedimentation has increased, there is heavy metal contamination, sewage problems, which together have lowered the oxygen level is some areas as nutrients have increased. Scallop dredging has destroyed seagrass and kelp beds, and kelp has been overharvested… large wetland areas in the upper estuary have also suffered recent degradation.

I reckon the health of rivers is one of the most widespread and intractable environmental challenges around the world. It’s something that environmental economics should be ideally placed to address because it’s about resolving conflicts over a common resource.

But what solutions does environmental economics offer to this? Is there any scope to create markets for river use? Is this something better left to planning law? Or is it something that should be looked after by government? How and who should decide what mix of uses a river should be put to? How do you resolve the competing claims on a river for drinking water, hydro power, irrigation, transport, recreation (swimming, fishing, boating), the protection of natural ecosystems, urban uses, industry, agriculture, forestry and so on?

Any ideas?