a potable condition and thus have value. The sale of potable water
following reforestation could thus provide a new source of income
for landholders. The economic modelling suggested that the sale
of 100 GL yr−1 of water at AUD$150,000 GL−1 would result in a net
water value of $285 ha−1 yr−1 when applied across the areas reforested
(Table 1). Reforestation was unprofitable when only wood
revenues from reforestation were considered, with a discount rate
of 9.5% but was profitable at lower discount rates and with carbon
prices of at least $26 Mg CO2-e. Additional income would come
from the sale of timber and carbon, and the bundled return from
timber, carbon and water was more profitable than the existing
agricultural system (Table 1).