1. The Environment Institute Where ideas grow The Murray-Darling Basin Mike Young Executive Director, The Environment Institute

2. The Environment Institute Life Impact The University of Adelaide Murray-Darling Basin Directly supports 3 million people Feeds approximately 20 million people Significant environmental values 14% of Australia (size of Spain & France) Australia’s three longest rivers 40% Australia’s farmers Agricultural exports earn $9b/year Gross value of agricultural production $15b (40% Australia) Irrigation: $5.5b (15%) Home to 34 major Indigenous groups

3. The Environment Institute Life Impact The University of Adelaide Flow generation

4. The Environment Institute Life Impact The University of Adelaide The Murray will have to solve its own problems

5. The Environment Institute Life Impact The University of Adelaide Major water storages in the MDB

6. The Environment Institute Life Impact The University of Adelaide Ecosystem Health Assessments 2004-07

7. The Environment Institute Life Impact The University of Adelaide Change? Total WaterWater Use Historical Climate23,41711,327 (48%) 2030 Median Climate20,93610,876 (52%) 2030 Dry Extreme15,5248,962 (58%) (CSIRO Water Availability – 2008)

8. The Environment Institute Life Impact The University of Adelaide Amplification - decreases in runoff

9. The Environment Institute Life Impact The University of Adelaide Growth in Basin diversions 9

10. The Environment Institute Life Impact The University of Adelaide Water Rights Reform & unbundling Water Tradable Right Price Land Single Title to Land with a Water Licence Entitlement Shares in Perpetuity Bank-like Allocations Use licences with limits & obligations National Competition Policy 1993/94 Plus Cap National Water Initiative 2004

11. The Environment Institute Life Impact The University of Adelaide Scarcity and Trading Source: Murray Darling Basin Commission, 2007 Water Reform Trading opened up

12. The Environment Institute Life Impact The University of Adelaide Return to investment in entitlement systems & trading After Bjornlund & Rossini 2007

13. The Environment Institute Life Impact The University of Adelaide Water needed to ensure conveyance EntitlementsEnvironment Flood water Shared Water Entitlements Volume of water available Environment with a fully-specified share A robust sharing system Now buying back water for the MDB environment $3.1 billion

14. The Environment Institute Life Impact The University of Adelaide The Guide to the Plan 1.Conveyance to and through Mouth 9 in 10 yrs 2.Prepared to lose 25% of red gum forests 3.Most benefits from 3,000 GL to 4,000 GL local are within region where reduction occurs 4.States must comply with SDLs even if Commonwealth fails to buy enough water

15. The Environment Institute Life Impact The University of Adelaide Guide principles and concepts Hydrological integrity – Most interception is included in the SDL algebra Equitable risk sharing with Environment – Conveyance reserve specified separately – Environment gets an entitlement for freshes and some overbank work Maximum subsidiarity – Uniform definition of SDL across the Basin built around a 114 year average less 3% allowance for adverse climate change – But CEWH takes a centralised view of the world.... Robust planning as the “premier” control instrument – Entitlement and allocation system sits under the plan – Could reverse this approach

16. The Environment Institute Life Impact The University of Adelaide Some critical dimensions 1.Only buy up to 45% of any system – But free trade?? 2.Average is a good basis for planning – Portfolio of entitlements would be better approach 3.No discussion of abandoned assets 4.Not clear about what will happen if Commonwealth fails to buy enough entitlements – Compensation? (Groundwater?) 5.Impact on each state in proportion to current share of the system

17. The Environment Institute Life Impact The University of Adelaide SDL proposals Surface water: 17 Basin-wide Current diversion limits 13,700 GL/y SDL proposals10,700 GL/y10,200 GL/y9,700 GL/y Reduction 3,000 GL/y (22%) 3,500 GL/y (26%) 4,000 GL/y (29%) % reduction in watercourse diversion component* 27%32%37% Max reduction for an SDL area 26%30 %35% Max reduction in watercourse diversion component* 40% 45% * If only this component is reduced

18. The Environment Institute Life Impact The University of Adelaide South Australia – Tier 1 Flow SA has an “administrative” Choke Storage options, interstate trade & environment flow management is severely constrained Inconsistent with notion of free trade and efficient management

19. The Environment Institute Life Impact The University of Adelaide The LTA SDL Long Term – Hides climate change signal Average – Mean not mode or median Sustainable – Not defined as a limit Don’t compromise key environment or productive base Diversion – Not allocated – Not “used” Limit Not a share of inflows Not a seasonal resource allocation

20. The Environment Institute Life Impact The University of Adelaide “Take” not “net use” environmentally sustainable level of take for a water resource means the level at which water can be taken from that water resource which, if exceeded, would compromise: (a)key environmental assets of the water resource; or (b)key ecosystem functions of the water resource; or (c)the productive base of the water resource; or (d)key environmental outcomes for the water resource. Management of “take” not amount “allocated” for taking Little concept of optimal storage management

21. The Environment Institute Life Impact The University of Adelaide Conveyance Reserve Conveyance water is water in the River Murray System required to deliver water to meet critical human water needs as far downstream as Wellington in South Australia. Not to barrages No requirement to have a minimum annual flow to the sea

22. The Environment Institute Life Impact The University of Adelaide Elements of a way forward A much more regional approach Commit to a fully specified entitlement system rather than a “planning” system – Define conveyance water needed throughout the system – Define the maximum amount that may be allocated in any irrigation season as the amount held when every “user” including interceptors has 100% allocation – Define a target portfolio of entitlements for the environment in each district Continue with a market-driven approach – buy entitlements at higher and less callous prices – Establish community development funds and place money in proportion to money spent on buy backs and scale of the buy back Establish regional environmental trusts to hold and manage entitlements. Move forward step by step, monitoring, adjusting learning as we go

23. The Environment Institute Life Impact The University of Adelaide Funding adjustment Proportion of entitlements in region secured by the Commonwealth Environmental Water Holder Additional amount of money to be placed in Regional Community Development Fund 0-10%20% of amount spent on purchases 11-20%30% of amount spent on purchases 21-30%40% of amount spent on purchases 31-40%50% of amount spent on purchases 41- 45%60% of amount spent on purchases

24. The Environment Institute Where ideas grow www.adelaide.edu.au/environment www.myoung.net.au

25. The Environment Institute Life Impact The University of Adelaide 25 When it takes effect proposed Basin Plan Final Basin Plan 201020142020