The Murray-Darling Basin in Australia is over one million square kilometres in area, and provides water to the majority (70%) of Australia’s irrigated agriculture (1.4 million hectares). It’s management is complicated because the Basin extends over five states and one territory. Until recently, the Basin was managed under a joint agreement – called the Murray Darling Basin Agreement. 41 per cent of Australia’s gross value of agricultural production (1992) is produced in this region. It is also an important water supply for many rural towns, and the capital city of the state of South Australia – Adelaide, the city I live in. The two main tributaries are the Darling River in the north and the Murray River in the south.

The Rivers of the Murray Darling Basin are under terrible stress. The largest state in the Basin, NSW, has taken more than its share of water that all the states agreed to (called “The Cap”). All states do not meter all water use, and more water is extracted from the river systems than is agreed under the Cap. Since irrigation began in the Basin in the 1800′s, salinity has been a problem, as water that moves into the groundwater collects salt and then flows back into the River. The response to this increased salt load into the River has been to build salt interception schemes along the rivers which intercept salty groundwater before it reaches the rivers. Nevertheless, the river floodplain has become increasingly salinised, killing trees and wetlands. The River has been under significant stress of reduced flows and salinity for some time. In the year 2000, a series of drought years created a major crisis for the River. All of the storage dams along the river are now at low levels. The River stopped flowing at its mouth, putting the Ramsar listed Coorong estuary in mortal danger. In 2008, the large Lower Lakes at the bottom of the river are drying up, and only a series of barrages stops the sea water backflowing into these freshwater lakes and back up the river. Irrigators do not have access to secure supplies of water, and are under huge financial stress or have left the land, leaving orchards and other crops to die. Wetlands have dried up and the floodplain of the lower reaches of the river are white with salt. The Coorong estuary has almost completely changed character, from an estuarine environment to a hypersaline system of low diversity. Some birds species are at imminent risk of extinction in this region.

The original Murray Darling Agreement has collapsed, and the management of the River is now undertaken through a series of management meetings, which must seem like crisis meetings, by a group of senior bureaucrats called the “Senior Officials Group”. Every month the news gets worse as the drought continues. The Lower Lakes of the Murray River are so dry, they are now at risk of developing acid sulphate soils. If the drought continues, the salinity of the River will continue to increase more rapidly. The security of water to the city of Adelaide, with a population of over one million people, is at risk.

If this is a harbinger of climate change, then the Basin cannot continue to be managed as it was in the past. The results of this management system is system collapse in dry periods.

In my interview with Mike Young, he proposes a new model for managing the Basin. He argues for a different management system that is much more resilient to long periods of drought, for which there is a higher risk under climate change. The essence of the changes are:

1. Replace the current entitlement and allocation regime with a robust one that can be confidently explained as one that will work no matter what the climate scenarios in the future

2. Implement the resultant change in a just a fair manner.

I am not going to repeat the article that Mike wrote. He is much better than I at presenting his arguments. I would encourage you to read his full article (link above) and listen to the podcast.

Written by Paul Dalby. For more information – http://www.litfuse.com.au

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For more information on the Droplet Series, visit http://www.myoung.net.au/water/

I interviewed Professor Mike Young on his latest “Droplet”, Pricing your water – is there a smart way to do it? In this Droplet co-authored with Jim McColl from CSIRO, they propose a pricing model for urban water which varies depending on supply. Currently, there are many different pricing models for water in Australia. The majority are based on an “inclining block” model (this is not something you would find at Stonehenge, but is a system where the price of water increases in steps, the more you use). About half include a fixed charge. When water supplies are not enough to meet demand, water utilities reduce demand by imposing restrictions on water use. See the water restrictions I am living under in my home town of Adelaide.

Mike and Jim argue that a better pricing model would be to remove the fixed charge, and charge more for water when supply is lower (such as in the current drought) and less when water is more abundant. Equity issues could be addressed by providing people with low incomes a rebate on their water bill, or other government assistance. In their view, such a system would achieve a match between supply and demand, ensures an equitable access to water and would encourage greater innovation and investment in more water supply.

For more information on the Droplet Series, visit http://www.myoung.net.au/water/

I interviewed Mike Young and Jim McColl on their new Droplet, New Water for Old: Speeding Up the Reform Process. In their Droplet, they have put forward the proposition that we need to reform water entitlements, plans and registers at the same time. Of all the things to be concerned about with Australia’s water, I was intrigued about why this was so important, when we could be investing in infrastructure for new sources of water (such as stormwater recycling and desalination) or demand management (reducing per capita water use).

I have interpreted Mike and Jim to be arguing that currently we have a system for managing water that is based on inaccuracies in our understanding of how much water is available, inconsistent systems for how we allocate water in each state and entitlement systems for water that are insecure, inflexible and costly to trade between potential water users. What does this mean for you and me? I guess it means that too much water is used in some places, and that political pressures can have undue influence over who receives water and who doesn’t. By implication, I think Mike and Jim are arguing that our current imperfect system of water management has contributed to the current water scarcity in the Murray Darling System.

The solution proposed in the Droplet, and expanded upon in the interview, is that we need to allocate water in the Murray Darling System in much the same way as companies allocate profits to their shareholders. A system would be established which accurately accounted for the water available for use, shares would be held in an electronic register that would specify the owners right to share in the water available in the system. These entitlements to a share of the water could be traded much the same as shares, and for much the same cost ($50-$60 per trade – currently it is much higher). You might have high and low “security” shares, where those who pay for (presumably more expensive) high security shares get first rights to water available in the system.

Given the current crisis in the Murray Darling Basin, such an idea is worth considering. The National Water Commission has been established to investigate the need for water reform in Australia. The Commission is complaining that the states are too slow in enacting needed reforms in water management. Mike and Jim are arguing for greater reform and at a faster rate than the Commission is trying to achieve. Is there hope for such a change? What is slowing down the pace of reform?