The Murray-Darling Basin Mike Young Executive Director, The Environment Institute

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

2. 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. Flow generation

4. The Murray will haveto solve its own problems

5. Major water storages in the MDB

6. Ecosystem Health Assessments 2004-07

7. Change? (CSIRO Water Availability – 2008)

8. Amplification -decreases in runoff

9. Growth in Basin diversions 9

10. Single Title to Land with a Water Licence National CompetitionPolicy 1993/94Plus Cap Water Land Tradable Right Price Entitlement Sharesin Perpetuity Use licences with limits & obligations Bank-like Allocations Water Rights Reform & unbundling National Water Initiative2004

11. Water Reform Trading opened up Scarcity and Trading Source: Murray Darling Basin Commission, 2007

12. Return to investment in entitlement systems & trading After Bjornlund & Rossini 2007

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

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

15. 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. Some critical dimensions • Only buy up to 45% of any system • But free trade?? • Average is a good basis for planning • Portfolio of entitlements would be better approach • No discussion of abandoned assets • Not clear about what will happen if Commonwealth fails to buy enough entitlements • Compensation? (Groundwater?) • Impact on each state in proportion to current share of the system

17. SDL proposals * If only this component is reduced Surface water: 17

18. 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 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. “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. 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. 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. Funding adjustment

24. www.adelaide.edu.au/environment www.myoung.net.au

25. When it takes effect proposed Basin Plan Final Basin Plan 25 2010 2014 2020