LitFuse

This is a blog-post based on an article about ‘water neutrality’ in the journal Conservation Letters.  The article references the term water neutrality as an idea proposed at the World Summit on Sustainable Development in 2002.  The concept is similar to the idea of carbon credits in that it seeks to create a cap on resource use. If someone takes water out of the system, they should take steps to make sure water is put back into the system from another source. Private water users balance their water account through both demand- and supply-side interventions.

The paper describes a scheme in South Africa which sets out to harness private sector investment in water security, “by allowing investors to balance quantitatively their water account based on sound scientific rationale.”

A three-step process is established:

1. reviewing water usage,

2. implementing a reduction strategy,

3. replenish of water to hydrological systems.

In South Africa, private water users can invest in removing weedy plants in the watershed that have a high water demand. By removing these weeds, private water users can “put back” water into the system that is  equivalent to their own water usage. Such a model opens up other clever ideas and will create a market for people who might sell water that they have been able to ‘create’ to those who wish to expand their water use. The trial presents an operational model for the promotion of a water-neutral market in South Africa.

In Australia, rural water users can trade water licenses across a 1 million km2  in the Murray Darling Basin, albeit in an environment where too many water licenses were handed out in the first place. Farmers trade water between each other. As water becomes scarce, some farmers are willing to pay a higher price for water, which attracts other farmers to sell or lease their water. Water trade also occurs between the city and the rural areas – that is, water utilities in the city are able to buy water licenses from farmers further back up the catchment. Another way water is sourced from the watershed is to shut down wetlands – removing their water so that the wetland system dies out, replaced by a terrestrial ecosystem. All of these decisions are made centrally by government and water utilities. Could Australia set up a system that allowed individuals and entrepreneurs to both find water savings and sell them, not just in the watershed, but in cities themselves? Professor Mike Young, Executive Director of the Environment Institute at the University of Adelaide has suggested the concept of water neutrality for cities using a different set of language to describe the same thing – a cap on water use in urban areas.

The water neutrality concept could be expanded to allow individual companies, local councils, and government agencies to find new water sources and trade them back into the system. This would require the water network to be opened up to third party suppliers who may be able to supply water from water recycling schemes, local, small scale desalination plants and rainwater harvesting (with quality assurance and the core infrastructure provided by government for an access fee).

In an environment where we have reached the limit of the water resource for human consumption in many areas across the globe, we need to create new institutional frameworks to allow economic growth to continue under conditions of resource constraint. The water neutrality concept, or establishing a cap on net water extractions from a watershed, is an example of a policy setting that allows us to protect our resource base, but encourages everyone to find better and more efficient ways of utilising the available resource.

Written by Paul Dalby on 21 June 2009