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?