Drought of good ideas has drained water policy

Australia’s commitment to excellence in water policy began in 1994 with the decision to include water in national competition policy. States were required to have arrangements allowing unfettered water trading, and a permanent cap was placed on water use in the Murray-Darling Basin.

Water reform, it was called.

Those reforms played an important role in alleviating the worst effects of what became known as the millennium drought.

As the severity of that drought became clearer, we again set out for policy excellence and in 2004 Australia’s governments agreed to a national water initiative.

Rather than building more dams, it was decided to reform water policy again.

In essence, we committed to getting the basics right, and the initiative’s commitments are respected globally.

The national water initiative required all states and territories, by 2006, to build entitlement and allocation systems capable of dealing with the effects of “land use change, climate change and other externalities”.

When the millennium drought eased a decade ago, this commitment to excellence was replaced with the language of compromise.

Consequently, the Murray-Darling Basin Plan is inconsistent with many of the national water initiative’s requirements.

Rather than requiring all parties to face the music from a national regulator and respond to reports about the lack of progress, in 2014 the federal government shut down the National Water Commission, which was established to oversee implementation of the national water initiative.

We were so good at water management that we no longer needed an independent umpire.

This was a serious mistake that is now being rectified with the appointment of an inspector general for water.

Predictably, drought is with us again. The core structure of the basin plan is solid but some cracks are showing. Some are oversights, others lie in the bones of the Water Act. Both need an overhaul.

Four serious flaws stand out.

First, the basin plan does not cover all forms of water use. The capture of overland flows largely remains outside the domain of the Water Act. But such overland capture is a form of water use. The Water Act must be amended so that all forms of water use — from the source to the sea — are included in the basin plan.

Exceptions create problems and, in the unregulated Darling River system this regulatory failure is now revealing itself.

Failure to include this form of water use in the regulatory system is one of the reasons so many fish have died in the Darling.

Second, the Water Act requires the authority to define the maximum amount of water that can be taken from each part of the system. As a result, the focus has been on setting that maximum.

As our river systems are showing us, insufficient attention has been given to minimum flow requirements and sharing during low-flow events. In Britain, a lot of effort goes into the definition of what are called “hands-off” flows. We should do the same so that we are more prepared for droughts and better manage water scarcity.

Third, robust water-sharing arrangements have built-in mechanisms that automatically adjust for climate shifts. Whether or not you call a climate shift “climate change” doesn’t matter.

The basin plan and each of the water resource sharing plans in their final stages of development require an automatic adjustment. The prospect of a long dry period is with us once again.

The solution to the second and third flaws is an approach that defines the size of the water-sharing pool and then the proportion of the pool that should be allocated to the environment.

This simple institutional reform requires legislative change, not studies of possible impacts and consequences.

It makes sense for the regional water resource plans to shift their focus from one on a limit to one on setting minimums assigned to the environment. Yes, there is a need for more climate change modelling, but that can wait.

Now is the time to change the legislation and embed a climate change management mechanism in each part of the system.

In 1997, the Kyoto Protocol drew international attention to the importance of dealing with climate change — yet 22 years on, the Water Act does not require every water plan to have a built-in climate-shift management mechanism.

Finally, the way we account for water use is seriously flawed. All water use needs to be measured.

Unlike the western US, Australia largely relies on a gross rather than a net water accounting system. We record most of what is taken out but make little attempt is made to estimate how much goes back. We need a net accounting system that reports changes in the amount that is being returned as well as the amount being taken.

As you increase water use efficiency, less water is returned to the system. The perverse effects of increased water efficiency need to be accounted for.

The time has come for the basin plan flaws to be plugged. Australia cannot wait. Basin communities cannot wait. And our vital river system cannot wait.

A “light” review of the basin plan is scheduled for this coming year, followed by a major review in 2025. That’s too late.

Now is the time for Scott Morrison to call the premiers together to recommit to the national water initiative. It was and remains one of the world’s best guides for water management.

Mike Young is professor of water, energy and environmental policy at the Centre for Global Food and Resources at the University of Adelaide. He leads the Global Water Partnership’s water-sharing initiative.