Cost-benefit analysis of coastal erosion

Coastal erosion at Old Bar

Old Bar is a small coastal community on the mid-north coast of New South Wales, just north of Newcastle and Myall Lakes. Old Bar is situated in the Greater Taree Local Government Area.

Old Bar has experienced variable rates of landward migration of the shoreline over several decades. While sand accretion may occur seasonally, the net impact has been one of steady erosion of the beach/dune system, the loss of several beachfront houses, and increasing risks to those houses that remain. The most rapid recession of (on average) 1 metre per year has occurred just to the north of the exfiltration ponds. Recession at other locations has been 0.5 metres per year on average.

Responding to erosion risks, Greater Taree City Council engaged Royal Haskoning DHV to identify and assess various coastal protection measures for Old Bar. This report identified a number of engineering solutions that appear to be most feasible from a physical perspective, some of which may ultimately result in the loss of the beach.

Cost-benefit analysis of responses to coastal erosion risks at Old Bar

The community of Old Bar faces difficult and challenging decisions due to coastal erosion. The community’s reliance on its proximity to the coast, continued costs and hazards of ongoing erosion, and costs associated with the alternatives available for dealing with the erosion, all require careful analysis to underpin critical decisions.

The Office of Environment and Heritage commissioned The Balmoral Group to undertake a cost-benefit analysis (CBA) of a number of options under consideration by the council to assist in the decision-making process. The objective of the cost-benefit analysis (PDF 3.4MB) is to provide a basis for understanding the costs and benefits of each of the options being considered. This will provide valuable information to inform the decision-making process for selecting a management response to shoreline recession at Old Bar.

The CBA considered the social, economic and environmental costs and benefits of the coastal protection options, along with the implications of a base case (or business-as-usual option). The CBA provides the basis for a distributional analysis to identify those stakeholders who are positively and/or negatively impacted. It also identifies the social impacts of options in terms of local tourism, housing, jobs, population, supporting industries and the long-term viability of Old Bar as a community.

The CBA finds that the most cost effective option is a Planned Retreat with Easements approach. This approach nets approximately $35 million in benefits over a 20-year period. In order of decreasing net benefits, this easement option is followed by Planned Retreat without Easements approach (net benefits of $29 million over 20 years). All other options result in net costs:

  • Stage 1 Sea Wall (-$9 million),
  • Stage 1 and 2 Sea Wall (-$45 million) and
  • Base Case: Business as usual (-$70 million).



Page last updated: 05 December 2014