Tuesday, November 07, 2006

We need less efficiency

For Water.

Explained in tomorrow's Canberra Times.

The Prime Minister has called for a “warts and all” examination of Australian water management.

He’ll find some of those warts peculiar.

Such as his own government’s program, launched last week, under which it undertakes to buy water rights from farmers along the Murray Darling Basin who save water as a result of “efficiencies”.

At the heart of the scheme is the notion that efficiencies will benefit the Murray Darling Basin.

It is a notion that is almost completely false, in the view of Australia’s leading expert in the economics of water management, Professor Mike Young, a former CSIRO Chief Research Scientist who is now Professor of Water Economics and Management at the University of Adelaide.

He says if, as is likely, the increased efficiency is the result of farmers making do with less water so that less runs off their farms, considered alone their actions would harm the Murray Darling Basin rather than help it. They would be putting less water back in.

“What we actually need less efficient farmers,” he explains.

There are a number of caveats. One is that to the extent that farmers increase their water efficiency by reducing water loss through evaporation or transpiration they actually will be helping the Murray Darling.

But if the efficiencies involve other ways of configuring their property to use less water they won’t be helping it at all.

He says most of the times we think we are ‘using’ water we are actually not taking it out of the system at all.

“For example in the city of Canberra you might think that you are freeing up flows of water into the Murrumbidgee and after that the Murray by taking shorter showers or using a low-flow shower head, but you are not. The water will flow into the Murrumbidgee anyway whether or not it flows through your house along the way,” he says.

The Water Through Efficiency tender program unveiled last week will be funded from the $200 million that the Australian Government has made available to recover water for the Murray. But Professor Young says there are doubts about whether the it will recover any net water.

“What we need is a system of water accounts, recognizing both debts and credits in the same way as do financial accounts. Only then will we get an idea of net rather than gross flows and understand what is going on,” he said.

The Commonwealth and the States committed themselves to setting up a national system of water accounts two years ago as part of the National Water Initiative. The Prime Minister and Premiers yesterday undertook to speed up that initiative.

Professor Young says there are few international precedents for a nationwide system of water accounts and it will be hard to get the accounts right. But he says it will be better to set up the accounts “and be approximately right than to be totally wrong.”