1. Prof. Mike Young Research Chair, Water Economics and Management The University of Adelaide NSW Country Press Association AGM, 26 th October 2007 Water

2. 2 Southern and Eastern Australia is running out of water All eastern and southern cities are on restrictions South East Queensland on Level 6 restrictions Irrigations allocations are at an all time low  Drier  Hotter  Warnings of adverse climate change How can Australia and, more particularly, those dependent upon the Murray Darling Basin system turn adversity into opportunity?

3. 3 Water withdrawals per capita Australia United Kingdom New Zealand Iraq (Australia = 135/161 countries) “We have a water management problem not a water supply problem!” Business Council of Australia 2006 Australia = “The driest inhabited continent in the world.”

4. 4 Changes in rain and water supply

5. 5 Sydney Less rain means much less water! - 25% - 75% Annual rainfall Storage

6. 6 Total River Murray System Inflows (including Darling River) DRY WET

7. 7 Re-live from 1938 2014

8. 8

9. 9 Inflows plus Starting Storage Season to date and last year > 2,500 GL storage used last year Annual Evaporative Losses

10. 10 Lake Alexandrina Salinity forecast

11. 11 Lake Alexandrina Projections 0.5 m “Sea Level”

12. 12 > 1,200 GL to refill Borrowing from the future Plus Lake Bonney & 27+ disconnected wetlands

13. 13 Over-allocation and over-entitlement A dredge was put in the Murray Mouth in October 2002 – before the drought! While governments procrastinate, nature’s solution to the problem has been to debase the reliability of water entitlements

14. 14 The River Murray Mouth

15. 15 The Coorong

16. 16 Fairy Tern

17. 17 Davo Blair Photography Ruppia tuberossa

18. 18 Ruppia has two year’s left

19. 19 Grey Teal 1980s 59,000 2000s 10,000 2007 2,500 Fairy Tern 1980s 1350 2000s 240 2007 6 Source: David Paton, University of Adelaide

20. 20 Increasing water interception Flow reducing activities 1.Increased forestry 2.More farm dams 3.More groundwater development 4.Increased irrigation efficiency 5.More lined channels and more piped water 6.More salinity interception Two Risks 1.Climate change 2.Bushfires

21. 21 Water supply in a drier world Inflows 100 Evaporative loss 10 Environment (Wetland irrigation) 20 Flow (flush out salt to sea) 10 40 Consumptive Use (Irrigation + urban) 60 Reduce inflows to 75 then only 75-(10+20+10) = 35 for use Reduce inflows to 50% then only 50 –(10+20+10) = 10 for use A 50% reduction in inflows means an 83% reduction in use Write off half the environment then 50 – (10+20+10*0.5) = 20

22. 22 Future How do we solve over-allocation and over-entitlement problems?  What is the role of the market?  With voluntary purchases, irrigation will remain locked in the past and prohibited from walking forward into the future? How and when will we refill the river & refill the dams?  Should committees and/or the market decide? How can we align flawed plans, flawed entitlement systems and flawed trading systems in time?  New strategies, a new agreement, a new set of plan, better entitlement systems and better trading systems are needed now  Can we change fast enough?

23. Contact: Prof Mike Young Water Economics and Management Email: Mike.Young@adelaide.edu.au Phone: +61-8-8303.5279 Mobile: +61-408-488.538 www.myoung.net.auwww.myoung.net.au Subscribe to Droplets at www.myoung.net.au