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Abstract
Threats to dugong survival include direct mortality from boat strikes,
drowning in nets and loss of habitat. Dugong sanctuaries were introduced
in 1998 to protect declining dugong numbers by recognising important
seagrass habitat areas. Nonpoint source pollutants such as dissolved
nutrients, pesticides and suspended sediment have the potential to affect
the species composition of seagrass and the extent of seagrass beds that
support dugong. We explore the nature of pollution costs to society and
their implications on land uses in catchments adjacent to these protected
areas. Policy options available to mitigate social externalities are examined
recognising the influence of market failure.