The organization / department in brief:

The Department of Environment, Land, Water and Planning (DELWP) is a state government agency in Victoria, Australia. DELWP brings together Victoria’s planning, local government, environment, energy, suburban development, forests, emergency management, climate change and water functions into a single department to strengthen connections between the environment, community, industry and economy.

DELWP’s challenge is to maintain Victoria’s liveability with a population that is expected to increase from 5 million to 10 million by 2050, while responding to climate change and protecting our natural environment, infrastructure and heritage for future generations.

Why was this undertaken?

This study was undertaken to pilot environmental-economic accounting in the context of Victorian coastal and marine ecosystems and inform the first State of the Bays report issued by the Victorian Commissioner for Environmental Sustainability. The Victorian Commissioner for Environmental Sustainability is tasked with providing independent and objective reporting to inform policy-makers, scientists and the wider Victorian public on the state’s natural environment. Victoria’s first State of the Bays report is a baseline study of the health of Port Phillip and Western Port Bays.

What was the scope?

Marine and Coastal Ecosystem Accounting: Port Phillip Bay was the first application of environmental-economic accounting to a marine ecosystem in Australia. The study used available data to construct a set of point-in-time environmental-economic accounts for Port Phillip Bay, in Victoria, Australia. The accounts reported the extent of ecosystem assets in Port Phillip Bay and provided an in-depth case study of seagrass assets and the ecosystem services they provide which generate benefits to people. The study used the Combined Biotope Classification Scheme (CBiCS) to classify marine habitats and biotopes and aggregate these for reporting purposes.

What were the results?

Port Phillip Bay contains a range of ecosystem assets including mangrove, saltmarsh, seagrass, rocky reef, mud and sand. Mud and sand make up the vast majority of the bay’s area – over 85 per cent. Muddy sediments provide important denitrification services. It is estimated that the bay can process over 5,000 tonnes of nitrogen per year and the value of this service is estimated at up to around $11 billion per year, which represents the costs that would be incurred to achieve equivalent denitrification through alterative means, such as upgrading infrastructure or wetland enhancement.

Although seagrass makes up only four per cent of bay ecosystems, it delivers a diverse range of ecosystem services that provide benefits to the economy and the community – particularly water filtration, sediment stabilisation, maintenance of nursery populations and habitat, and carbon sequestration and storage, with recreation more indirectly linked. Seagrass ecosystems in the bay provide important habitat services for a number of fish species including Australian anchovy, southern sea garfish and King George whiting. The value of these habitat services is reflected in the enhancement of fish stocks that has been estimated at a minimum of $6 million per year across 7,350 hectares of seagrass in the bay. The bay also provides benefits such as climate change mitigation through carbon sequestration, which is valued at up to $350,000 per year from seagrass ecosystems. A number of benefits are yet to be quantified, including recreational fishing, aquaculture, recreation and amenity.

The study identified a number of gaps and potential areas for future work including:

  • A lack of ecosystem condition and spatially referenced data, which made it difficult to construct spatial and condition accounts for the bay.
  • A lack of time series data, which meant that change in the extent of ecosystem assets over time could not be assessed.

Next steps

Marine and Coastal Ecosystem Accounting: Port Phillip Bay was a pilot study undertaken to inform Victoria’s first State of the Bays report. The Victorian Commissioner for Environmental Sustainability is implementing a new reporting framework called ‘state and benefit’, which aims to present objective and accurate information on the state of Victoria’s natural assets, and to emphasize the direct and indirect benefits that all Victorians derive from healthy and sustainable ecosystems. This framework strongly aligns with environmental-economic accounting frameworks, and environmental-economic accounting will inform future reporting by the Commissioner for Environmental Sustainability, including the 2018 State of the Environment report.

Other comment

The full study Marine and Coastal Ecosystem Accounting: Port Phillip Bay is available here.