Transcript 20041019_csiro_powerpoint_template.pot

A future-proofed MDB?
Prof. Mike Young
Research Chair, Water Economics and Management
The University of Adelaide
CEDA Luncheon, Melbourne, 22nd February 2008
The Murray Darling Basin?
What’s the problem?
2
0
2004
300
2004
2001
1998
1995
1992
1989
1986
1983
1980
14% less
2001
1998
1995
1992
1989
1986
400
1983
1980
1977
1974
1971
1968
1965
1962
1959
1956
1500
1977
1974
1971
1968
1965
1962
1959
1956
PERTH
1953
1950
1947
1944
1941
1938
1935
1932
1929
1926
1923
1920
1917
1914
1911
Rainfall (m m )
2000
1953
1950
1947
1944
1941
1938
1935
1932
1929
1926
1923
1920
1917
1914
1911
S tr e a m flo w (G L )
Changes in rain and water supply
Rainfall for Jarrahdale
20%
less
- 1%
1000
500
0
1000
900
S tre a m in flo w fo r P e rth d a m s (P rio r to S tirlin g D a m )
800
700
600
500
4 8 % le s s
- 3%
66%
le s s
200
100
3
If it gets drier
Less rain
means
much less run-off
much less water
4
Total River Murray System Inflows (including Darling River)
Total River Murray System Inflows (including Darling River)
Annual Inflow <= 25 000 GL (GL)
25 000
Modelled Current Conditions - Extended Droughts shown in Red
20 000
WET
DRY
15 000
10 000
5 000
Long-term Median Inflow (9 000 GL/yr)
0
1892
1902
1912
1922
1932
1942
1952
1962
1972
1982
1992
2002
5
Total River Murray System Inflows (including Darling River)
with post 1938 sequence imposed from 2002
Re-live from 1938
Annual Inflow <= 25 000 GL (GL)
25 000
20 000
15 000
2014
10 000
5 000
0
1892 1902 1912 1922 1932 1942 1952 1962 1972 1982 1992 2002 2012 2022
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Problems
1. Over-allocation
2. Interception
3. Over-entitlement ground & surface water
4. Inefficient storage management
5. Governance and administrative failure
6. Lack of planning for long dry periods
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Elements of a solution
1. Hydrological integrity
•
Complete and full accounting for all water use including
groundwater and interception
2. A step-change to a new future-proofed bulk
entitlement system
•
Designed to cope with long dry periods
3. An environmental entitlement
•
Empower environmental managers
4. Timely, just and fair financial recompense
•
Empower irrigators
•
Empower irrigation companies
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Volume of Water in the System
A template for a future-proofed regime
Volumetric allocation for evaporation,
required transfers and losses
Detail
1. Decide how hard to work the River
•
What % of shared water for the environment?
2. Issue bulk entitlement shares in surface water bodies
to states in proportion to their share of the cap
3. Establish an Authority to make allocations to shared
water in all ground and surface water systems
4. Allow water all allocations to be carried forward
•
but carry-forward spills first and may need a delivery entitlement
5. Guaranteed allocations & disciplined announcements
6. Offset of all forms interception
•
All effects of forestry, farm dams and salinity interception must be
offset
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$5 billion now or up to $10 billion over 10 years?
2000
1800
Federal Labor has undertaken to bring
forward $400 million from 2009/10
Modernising irrigation
Buying water for the environment
1600
1400
Billions Dollars
Next three years
1200
1000
800
600
400
200
0
2007/08
2008/09
2009/10
2010/11
2011/12
2012/13
Budget Year
2013/14
2014/15
2015/16
2016/17
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A way forward (continued)
7. Empower the water market to facilitate change
•
Instantaneous allocation trading
•
Unencumbered entitlement trades within two days
8. Option to move individual entitlements to bulk register
9. Retain key State responsibilities for land use control
10.Leave water delivery businesses as they are
11.Review river-configuration
•
Explore opportunities to reduce evaporative losses and facilitate
efficient management of environmental water
12.Incentive payments for State
•
Competition payments
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A fair and equitable transition
1.
2.
A new Agreement that assigns bulk entitlement shares to each
state and to environment trusts
•
Individual entitlements can remain in place
•
But allow migration to system register
Timely Financial recompense
•
Payment up-front so that all can plan with confidence
1.
Option 1 - Put around $0.5 billion aside for the Darling and $1 billion
for restructuring,
then transfer the remainder to industry as soon as a new MDB
Agreement is in place
2.
•
Cheques to irrigators
•
Cheques to irrigation companies (= Termination fee)
•
Waive govt. entitlement trading charges
Option 2 – Start with smaller environmental share and use major share
buy back to secure remaining percent as quickly as possible

Environment starts with, say, 10% of shared water

Tender to buy the rest
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Which future is best?

One that gets the fundamentals right, now?
 A system that can confidently explained as able to
cope -- whatever future arrives

One that commits all to more decades of reform and
uncertainty?
 Incrementalism
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Water Economics and Management
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www.myoung.net.au
Adverse climate change
In Mediterranean climates, a 10% decline in mean rainfall
results in around a 30% decline in mean storage inflow
Mean supply
10,000
Mean supply
7,000
River & Storage Evap 2,000
River & Storage Evap 2,000
Flow to sea
2,000
Flow to sea
2,000
Deliverable water
6,000
Deliverable water
3,000
Environment Use
1,500
Environment Use
1,500
Consumptive Use
4,500
Consumptive Use
1,500
0
10% less rain water means a 67% reduction in allocations
unless the system is resized
0
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