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Drought and its role in shaping Water Policy in Australia

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					Drought and its role in shaping
   Water Policy in Australia
                    Matt Kendall
General Manager, Sustainable Water Management Group
            National Water Commission

          International Drought Symposium
         Riverside California, 26 March 2010
            Presentation Overview
1. Australia’s water resources
2. The role of drought in shaping water policy in Australia
3. The Federation Drought 1895-1902
   –   Australian Federal Convention
   –   Clause 100 of Constitution
   –   Towards a River Murray Commission

4. The Millennium Drought 2002-2009
   –   Australia’s National Water Initiative
   –   National Plan for Water Security & the Federal Water Act 2007
   –   Murray-Darling Basin Authority & the “Basin Plan”

5. Australian progress with water reform and future challenges
     Australia – a federal system
                                                               Water is mainly a State
                                                                responsibility (Clause 100
                                                                of Constitution)
                                                               Trans-boundary issues
                       NORTHERN
                       TERRITORY

                                    QUEENSLAND
                                                                especially Murray-Darling
                                                                and Great Artesian Basins
   WESTERN
   AUSTRALIA

                         SOUTH

                                                               Federal Government
                        AUSTRALIA

                                       NEW SOUTH
                                         WALES
                                                                involved in policy
                                                                leadership, planning and
                                    VICTORIA       A.C.T
                                                 AUSTRALIAN
                                                   CAPITAL
                                                  TERRITORY
                                                                funding
CAPITAL CITIES

                                        TASMANIA
MURRAY-DARLING BASIN
             Australia - Landscape
• Geologically old, flat country – in the low rainfall latitudes
• Extensive dry areas – desert and semi-desert
• High variability within and between seasons – drought and
  flood, high evaporation
• Southern Oscillation: Drought – El Nino, Floods – La Nina
• Most industry in the south, most run-off in the north – but few
  water storage opportunities
• In the south, most available water already captured
• Surface water 70%, Groundwater 30% and growing importance
• ... and a growing climate change signal
Australian river flows are highly variable
                                                          RATIO
                                                      BETWEEN THE
      COUNTRY                     RIVER               MAXIMUM and
                                                       the MINIMUM
                                                     ANNUAL FLOWS
        BRAZIL                   AMAZON                       1.3
     SWITZERLAND                  RHINE                       1.9
        CHINA                   YANGTZE                       2.0
        SUDAN                  WHITE NILE                     2.4
         USA                    POTOMAC                       3.9
     SOUTH AFRICA                ORANGE                      16.9

      AUSTRALIA                 MURRAY                       15.5
      AUSTRALIA                 HUNTER                       54.3

                    Source:   Chartres C.J. & Williams J., 2006
Water use per capita




   Source:   UN Food and Agriculture Organisation, 2005
     Distribution of Australia’s surface runoff

                           20.3%
                                          23.3%


                 1.0%      0.4%                           21.1%
                                        1.9%
                                                  0.3%
                                   0%
                    1.7%
                                                6.1%


                                                       10.6%

Source: Water and the
Australian Economy                      13.3%
– April 1999
Major Australian Droughts 1895-2010
 Drought years   Dry years in drought       Comment
                      sequence
  1895-1902             1902            Federation Drought
  1914-1915
  1937-1945          1940, 1944
  1965-1968
  1982-1983             1982
  1991-1995
  2002-2009       1997, 2002, 2006      Millennium drought
Drought – the last 10 years
 Australia’s Federation Drought 1895-1902
• Australia’s greatest natural disaster to-date
• Water management discussed at 1897/8 Australian Federal Convention –
  leads to drafting of Clause 100 giving States powers for water mgmt
• February 1902 – concerns for Sydney’s water supply
• 26 Feb 1902 – NSW declares day of humiliation and “prayer for rain”
• Lowest wheat crop of the century
• Returning to her homeland Dame Nellie Melba “shocked and disgusted”
• Darling River runs dry at Bourke, Murray riverboat travel severely
  disrupted
• Sheep and cattle numbers devastated (Sheep 91 to 54 m, Cattle 11.8 to 7 m)
• Spurs interest in co-operative management of River Murray, Corowa Water
  conference in 1902 but no River Murray Commission till 1915
• Dorothea McKellar pens My Country “....of drought and flooding rains”
Australia’s Millennium Drought
  Rainfall for the seven years 2002-2008
Drought impacts on environment
   Clayton Bay, River Murray Lower Lakes
Drought impacts on farmers, communities
Drought impacts on Urban Water
Annual Inflows to Urban Dams have declined
  Average urban household consumption (GL) in
          Australia (37% reduction in 6 years)
1400


1200


1000


 800


 600


 400


 200


   0
       2002-03   2003-04   2004-05   2005-06   2006-07   2007-08
                        Urban Water Supply/Demand Options – Sydney, Adelaide, Perth, Newcastle
         $10.00
                                                                                                                                                   $9.30
          $9.00

          $8.00

          $7.00
                                                                                                                                          $6.00
          $6.00                                                                                                                 $5.60
                                                                                                                       $5.00
$/kL




          $5.00
                                                                                                           $4.00
          $4.00
                                                                                          $3.00   $3.00
          $3.00                                                                   $2.61
                                                                                                                                 $3.00

          $2.00                                    $1.45          $1.50   $1.58
                                      $1.30
                                                                                  $1.68
          $1.00                                                                           $1.15                                                    $1.30
                          $0.25                                                                            $0.30
                                      $0.63        $0.00          $0.10   $0.20                   $0.15                $0.06              $0.08
          $0.00           $0.22




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                                                                                                                    on
Source: Marsden Jacob (2006) report to Department of Prime Minister & Cabinet
                                                                                                                   N
      Australia’s Millennium Drought 1997-2009

      “Two droughts within a drought”
                    2002

•   Oct 2002 – Farmhand Foundation – Australia’s richest business identities call for
    Government to drought-proof Australia, turn the rivers inland, develop national water grid
•   Nov 2002 - Wentworth Group of concerned scientists – warned of environmental
    catastrophe if rivers turned inland, and promoted water reform objectives
•   2003 – Water policy by National Farmers Federation, Australian Conservation Foundation
•   June 2004 National Water Initiative agreed by Commonwealth and State/Territory
    governments
•   2004 National Water Commission established to “Drive national water reform”
•   $2bn Australian Government Water Fund established
      Australia’s Millennium Drought 1997-2009

      “Two droughts within a drought”
                    2006

•   2006 Toowoomba recycled water referendum, followed by Qld Premier Peter Beattie
    recycled water “Armageddon solution”
•   2006 Melbourne Cup Day Summit – Prime Minister & First Ministers
•   Jan 2007 Prime Ministers Australia Day Address $10BN National Plan for Water Security
•   April 2007 Prime Minister calls on nation to “pray for rain”
•   Capital cities implement severe restrictions: Brisbane, Sydney, Melbourne, Adelaide, Perth
•   Commonwealth Water Act 2007 (Amended 2008)
•   Murray-Darling Basin Authority and Basin Plan
•   Water for the Future $12.9 BN
     National Water Commission
1.   Advance the COAG National Water Initiative
2.   Report on progress in national water reform
3.   Advise, government, Minister, COAG on water
4.   Audit implementation of water plans
5.   Advise on reform progress by the States for Federal
     performance payments


         Drive the national water reform agenda
                  Commissioners
Commissioners have professional expertise in areas such as:

 Water resource management

 Freshwater ecology or hydrology

 Resource economics

 Public sector governance

 Programmes relating to natural resource management
    The Australian National Water Initiative (NWI)
         – an inter-governmental agreement
“A nationally-
                          Water Planning
compatible market,
regulatory and
planning based system
of managing surface
and groundwater
resources for rural and
urban use that
optimises economic,
social and                Water scarcity
environmental
outcomes”
        Water Markets                      Water Regulation
The Central Issue in Water Management
                  How much water is available?




              How much              How much for
                for the             consumptive
             environment?              use?

                                             How much for each
       How much for each
                                          alternative consumptive
                                             How much for each
      Environmental asset?
       How much for each                             use?
                                          alternative consumptive
                                              How much for each
      Environmental asset?                           use?
                                           alternative consumptive
      How much for each
     Environmental asset?                             use?
Australia’s Agreed Water Policy Objectives
 Water Security
 Water use efficiency
 Water for the environment
 Sustainable Supply
 Tradability of Water
 Better metering and accounting
 Improved scientific and socio-economic input
 Better, more participatory, water decision making
            Water trading
From this ....         To this ….
                        Science
                         Data
                        Evidence
                                             Irrigators
Monitoring &                             Environmental Reps
 adaptive                                    Scientists
management          Statutory             Indigenous Reps
                                         Community Groups
                      Water
                    Planning

         Plan given                Draft water
          statutory                  plan to
        (legal) force              Government
 What does the inter-governmental
     reform agreement say?
 Return all water systems to sustainable levels of extraction
 Provide secure water entitlements for irrigators
 Provide secure water entitlements for the environment
 Introduce statutory-based water planning processes
 Provide access for indigenous interests
 Legislate for clear risk sharing provisions
What does the inter-governmental
    reform agreement say?
 Ensure open water trading
 Improve water pricing
 Improve management of groundwater
 Improve management of environmental water
 Take action to deal with water interception
 Seek smooth adjustment where water supplies vary
  What does the inter-governmental
      reform agreement say?
 Introduce better water metering
 Improve water data collection and accounting
 Invest in knowledge about water, and build capacity
 Improve security & management of urban water supplies
 Improve the effectiveness of water demand management
 Encourage water sensitive urban design
    Water for the Future $12.9 billion
 MDBA Basin Plan – new Sustainable Diversion Limits for MDB
 Improved, accurate, accessible water data and information -
  Bureau of Meteorology $480 million
 Investigate development of northern Australia water resources
 Irrigation efficiency and infrastructure upgrades $5.8 billion
 National Rainwater tank and Greywater Initiative
 Strengthening Basin Communities Program
 National Urban Water and Desalination Plan $1 billion
 Buying back water entitlements $3.1 billion
 Establish Commonwealth Environmental Water Holder
                        Conclusions
• Drought has always been and continues to be a feature of the Australian
  landscape and way of life

• Due to their severity and the combination of climatic, hydrologic and
  political events the 1895-1902 Federation and 1997-2009 Millennium
  droughts have been the most influential on Australian Water Policy

• Effects of the current drought is compounded by the growth in
  development, over-allocation and climate change including higher
  temperatures

• Drought has tragic consequences for farmers, businesses, communities
  and the environment

• Drought shifts the authorising environment and creates an opportunity
  for water reform and step changes in water policy and management
More information?

www.nwc.gov.au
Cartoons by Nicholson from "The Australian"
newspaper: www.nicholsoncartoons.com.au
Drought, Climate Change & Water:
  What’s going on in Australia?
•   Reduced rainfall; much reduced runoff
•   (Even greater) seasonal variability
•   Pre-existing problem of overallocation
•   Rising demands for environmental water
•   Interstate disputes over water
•   Upstream – downstream disputes
•   Rural-urban disputes
•   Continuing rural adjustment pressures
  This causes some challenges, e.g.,...
• Adjusting back to sustainable levels of water
  extraction (while the climate change bar keeps rising)
• Water-induced rural adjustment (compounding existing
  adjustment pressures)
• Achieving cooperation among different States
• Displacement stress on connected water systems
  e.g., groundwater
• Hard choices among environmental assets
• Need a sustainable water system with flexibility for
  a climate changing the future
 ... So what are we doing about it?
1.   Building an agreed national water reform agenda
•    Council of Australian Governments
•    The National Water Initiative
•    The Federal Water Act
•    New Murray Darling Basin Authority and Plan
... So what are we doing about it?
2. Building a more flexible water system
• Making irrigation and environmental water tradable
• Removing impediments to water trade (e.g., bans on
  rural- urban trading; trading out of districts)
• Engineering flexibility e.g., water grids
• Actively promoting adaptive environmental water
  management (“learning from experience”)
• Investigating the water potential of Northern
  Australia
 ... So what are we doing about it?
3. Building a more efficient water system
• Full cost pricing for water services; market pricing for
   water supplies (encourages efficient use & discourages
  waste)
• Major investments in modernising irrigation
  infrastructure (delivering some big water savings) A$5.9BN
• Major investments in improved water metering
• Improved compliance and enforcement
 ... So what are we doing about it?
4. Building water management capacity & improving
    information
• Major investments in improved water data and water
    accounting – one national go-to place for data A$480 m
• National investments in improved climate, seasonal, weather
  and hydrological forecasting
• Program of credible studies of likely future sustainable yields
• Water management agencies & institutions with
  independence & authority
• Reform undertakings by State Governments
 ... So what are we doing about it?
5.... And some policy innovations
• Issuing shares, not volumes, of available water – in perpetuity
• Offering different levels of water security – at different prices
• Unbundling water entitlements from land title
• Statutory water planning processes for each water system
• A major voluntary buy-back program for the environment
  $3.1BN
• Independent public assessment of States’ reform
  achievements
• Providing Federal fiscal incentives for reform by the States

				
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