QUARTERLY ESSAY 77 Cry Me a River

 

Correspondence

Mike Young

Margaret Simons’ essay Cry Me a River came out a few weeks before the official report of the Interim Inspector-General for the Murray–Darling Basin, Mick Keelty: Impact of Lower Inflows on State Shares under the Murray–Darling Basin Agreement. Both are worth a careful read. Fascinated that Simons had got it so right, I read her essay in a single sitting. She documents superbly the depth of feeling and misunderstanding in the Basin, and how politicians have attempted to frustrate progress. As the American water administrator Tim Quinn has recently observed in California, “Too often, water policy leaders and stakeholders focus almost exclusively on what should be done rather than the process for making those decisions.”

Throughout the millennium drought, Australia was committed to searching for excellence in water management. We had the process right. The search led to a total rewrite of water management legislation in all Basin states, the complete re-specification of our water rights system and the development of one of the world’s best water-trading systems. The rest of the world was envious: by attending to basic concepts and agreeing to core principles, we were getting the detail right. However, the last decade has been characterised by compromise. To an outsider looking in, we have lost our way.

In 2006 and 2007, as the millennium drought deepened, it became obvious that we needed a better way to manage the Basin – something like an independent Reserve Bank for Water and a comprehensive plan. The proposed planning and water allocation system would need to cover groundwater as well as surface water, include powers to control overland flows and, as required under the National Water Initiative, bring an end to over-allocation. As Simons explains, all the leaders involved agreed. It was time for a rethink.

The legislation for a Basin-wide plan and an independent Murray–Darling Basin Authority emerged in 2008 and, while it still had a few gaps, it allowed Australia to claim, for a second time, the title of world’s best water manager. But state ministers and water managers wanted to remain in control and, as Simons ably outlines, they jostled their way back to a position where they could prevent the emergence of an Authority that put Australia’s collective interests first rather than their local interests.

Mick Keelty’s report, which has been accepted by the federal government, points to a failure of those involved in Basin politics to get their heads around a host of basic water management concepts, and to a lack of leadership. Both are urgently required. The Basin lacks a person who is seen to be responsible for calling the shots and has the expertise to speak with authority and the insight to find the right solutions.

The primary role of leaders is to create a sense of trust in the process. So far, those involved have not been able to do this. Simons suggests that while all the efforts to frustrate progress and hijack agendas may be to the short-term benefit of some, they have come at a massive long-term cost to all. It is time for our leaders to stop supporting one solution over another and, instead, focus on fixing Basin governance: its legislation, policies and the Plan. The leaders must now commit to putting a state-of-the-art plan in place and make sure that everyone understands both what is required and why it is so important.

Simons and Keelty make another important point: in recent years the Basin has got much drier, as the figure on the following page, from Keelty’s report, shows. For too long, water allocation plans have focused on the long-term average. A better approach, as Simons points out, would replace all arguments about volumes with a discussion of how to share water when it is wet and when it is dry, and how to put a strong water-sharing system in place. Robust water entitlement and allocation systems are designed to cope with long drys and even a permanently drier climate.

In the UK, water managers spend a lot of time working out how much water has to be left in each river to ensure the entire system remains healthy – all the way from its source to the sea. Innovatively, they call this water a “hands-off flow”, and it is allocated first. No one is allowed to touch this water. Keelty devotes an entire chapter in his report to the Australian equivalent: conveyance water. The need to ensure that there is always enough water flowing to ensure the system’s basic health is poorly understood. Conveyance water is an appropriate name for the Southern Connected Basin, but for the Darling system I prefer the UK term, as it so powerfully gets the message across. Some water always has to be left in the system. In retrospect, it is obvious that all involved have spent way too much time arguing over maximum amounts that can be taken and not nearly enough about minimum flows.

Keelty’s explanation of how much drier it has been in the past twenty years

A properly designed system would start by putting aside enough water for conveyance and deciding how to share access to the remainder. These are difficult decisions, as they involve risks and trade-offs. Try deducting 2000 gigalitres from the bottom of the above graph and then working out how much the water available to be “used” has declined. The answer is quite frightening. Small declines in rainfall mean much larger declines in the amount of water flowing into the river and much, much less water that can be used. As a rule of thumb, a 10 per cent decline in mean rainfall can result in a 30 to 40 per cent decline in inflows and, as the base flow still needs to be maintained, as much as a 60 or 70 per cent decline in the amount that can be taken out of the system and used for irrigation, discretionary environmental objectives, etc.

Recognising the importance of this basic concept, at the end of her essay Simons reports a sad but illuminating “water-sharing” discussion with the Authority’s current CEO, Phillip Glyde. Sitting down with Glyde, she raises the need for a dynamic sharing system – one that would adjust automatically to changes in the health of the system and recent inflows. Glyde agrees that such a system is required. No argument. But then he goes on to explain that during the development of the Basin Plan, rather than requiring a robust water-sharing system, it was decided to set sustainable diversion limits for each part of the Basin and define them as a fixed number. SDLs, as they are called up and down the Basin, “were required for legal reasons and also ‘for bringing people along reasons.’” Tellingly, Glyde then goes on to say that “perhaps in twenty or thirty years, ‘in Basin Plan Mark Four or Five,’” such a system could be put in place. When the CEO – known for his pragmatism – thinks it will take three or more Plans to get the basics right, something is seriously wrong.

In closing, Simons observes that, “The political obstacles, the hate, the unfairness and the potentially catastrophic gaps in our knowledge obscure what an achievement it would be for the Murray–Darling Basin Plan to succeed.” But what would it take to succeed? It would have to start with sensible amendments to the Water Act, followed by amendments to the raft of state and territory Water Acts that enable allocations to be made and then to each of the Basin’s eighty or so local water-resource plans. This is a big job, but one worth doing. As Keelty also observes, there is an urgent need to improve water literacy, for a new apolitical leader and for much better engagement and consultation processes.

I hope we will see this include a much better understanding of the role of groundwater, the difference between gross and net water accounting systems, and the need to specify entitlements. Long ago, it was recognised that the Darling’s water licensing system needed to be modified so that environmental water can be shepherded safely from one part of the Darling to another. As millions of dead fish are telling us, it is time to make it easy to shepherd (hands-off water) through the system. Simons includes many references to the importance of groundwater, including return flows. Sadly, however, those who drafted Keelty’s terms of reference left out any requirement to consider groundwater. There is only one mention of it in his entire report.

Even more importantly, it is time for our political leaders to put Basin politics to one side, appoint a truly independent chair of the Authority and instruct this person to start searching for a suite of institutional and administrative arrangements that will serve those who live in the Basin, those who use its water resources and those who benefit from their existence. More than anything, the Basin needs a leader capable of restoring trust and developing a state-of-the-art solution rather than a messily negotiated suite of compromises.

 

Mike Young holds a research chair in Water and Environmental Policy at the University of Adelaide and was the founding director of its Environment Institute. Before joining the University of Adelaide, he spent thirty years with CSIRO.

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This correspondence discusses Quarterly Essay 77, Cry Me a River. To read the full essay, subscribe or buy the book.

This correspondence featured in Quarterly Essay 78, The Coal Curse.


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