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Environmental Influence

Unfinished business in the Murray-Darling Basin

As World Water Day (22 March) comes around for another year, it is worth reflecting that we are entering into another major period of uncertainty in terms of managing Australia’s largest and most productive river basin – the Murray-Darling.

Recent announcements from the Commonwealth government have indicated that they are returning to a policy of purchasing irrigation water entitlements and allocating them to restoring and protecting aquatic environments.

To understand why this matters, we have to go back to the late 1990s, when it became clear that too much water was being taken for irrigation from the Murray River. This had led to widespread environmental degradation that became even more severe during the Millennium Drought (2001-2009).

In an effort to protect and restore values in the Murray-Darling Basin, the Commonwealth government entered into an intense period of water reform, developing the Water Act (2007) and ultimately the Murray-Darling Basin Plan (2012). Key to this was the establishment of a water market to allow trade of irrigation water to the highest value products and, within this framework, reallocation of water from irrigation to the environment.

The intention of the Water Act and MDB Plan was to reset the balance of water allocations between irrigation and the environment, creating what was termed ‘a healthy working river’. To achieve this, the Commonwealth invested in a major scientific program to determine how much water could be diverted from the river while maintaining ecological values (the ‘Sustainable Diversion Limit’).

This value was then used to identify how much water being used for irrigation would need to be recovered and reallocated to environmental uses. This target was set at 2,075 gigalitres by June 30 2024, but only after considerable – and ongoing – debate about whether this would be sufficient to protect and restore the environment.

To generate these water savings, two main mechanisms were used by government. The first was ‘buy-backs’ which purchased irrigation water allocations and provided them to the Commonwealth Environmental Water Holder to use these to achieve environmental benefits. In the period until 2015, a total of $2.7 billion was spent to recover 1,288GL of water for the environment. This environmental water was allocated to different rivers through a complex system of water plans managed between the states, the Murray-Darling Basin Authority and the Commonwealth Environmental Water Holder.

The second set of savings was to be gained from ‘works and measures’ – essentially engineering works to make water management more efficient. These included lining leaky irrigation canals and reducing water volume in some dams to reduce evaporative losses. More than $4.5 billion was spent this way, to recover an additional 693GL of water. While this approach was favoured by the farming sector, some analysis suggests that it has been a relatively inefficient way to recover water. Other works have been necessary to allow environmental water to reach critical habitats.

The issue most in the news recently has been the ‘gap’ between the water savings target for 2024 and the actual amount of water recovered for the environment to date. This gap is substantial – 49.2GL, or almost 10% of the volume of Sydney Harbour. The Labour government has announced that it will embark on another program of water buybacks and not fund further works and measures programs, despite opposition from some states .

Many of the works and measures programs are only partially completed, and states are concerned that they will now not be delivered, and their water savings not realised.

The recent commitment of the Commonwealth government to delivering the Murray-Darling Basin Plan and the imminent review of the Plan in 2026 provides a critical impetus to considering both the strengths and weaknesses of the Murray-Darling Basin Plan as it stands.

Australia can take a measure of pride that it has embarked on one of the most ambitious programs of water reform in the world. While the effectiveness of water markets has been contested, in the MDB markets have been an important instrument in reallocating water between irrigation users and between irrigation and the environment.

There is clear evidence that environmental water has created environmental benefits and arrested declines in parts of the Basin, although these benefits are limited to areas where environmental water can be delivered and by the volume of water available to be used in this way.

There is clear evidence of social and economic costs of water reform which have proven difficult to mitigate, although there are also socioeconomic benefits.

While there is some evidence of success, four clear failures of water reform in the Murray-Darling Basin also emerge. The first is a balanced public narrative around the costs and benefits of the Plan. Most Australians are unaware of the details of water management within the Basin, and the public debate has been absent or focused on bickering over scientific credibility and independence.

Informed debate about the value of environmental water is critical because the balance between using water for irrigation and for the environment is a social decision, driven by political processes and ultimately by the Australian electorate.

The second failure centres on the question of Indigenous access to water.

Indigenous Australians were excluded from access to land and water from the time of colonisation, and the MDB Plan has been woefully inadequate in terms of addressing the historical, structural and cultural factors that perpetuate this inequity. While there is now progress on redressing this, in water management there remains significant challenges, reflective of a broader debate in Australian society over Reconciliation and Indigenous representation. Buybacks will provide income to those who were fortunate enough to hold water allocations, but will do nothing for Indigenous communities who have been excluded from those allocations.

The third failure of the Plan has been in integrating water management with conservation, land management and pest management. The separation of water management from other aspects of natural resource management has led to a ‘just add water’ philosophy for river management. In reality there are diverse threats to Australia’s freshwater biodiversity, which include effects of land clearance, altered salinity and the impacts of invasive species such as carp. The issue of water buybacks cannot be isolated from a discussion of whether better value for money might be obtained from managing other stressors in freshwater ecosystems.

The final significant issue is how water reform will cope with the challenge of climate change. A general drying trend coupled with increased intensity, frequency and duration of extreme events is emerging as a threat not only to the future of the Basin but also to the environment benefits already achieved. With the potential for profound drying across the Murray-Darling Basin, it will be increasingly challenging to reach objectives for protecting and restoring aquatic ecosystems. Discussion of water buybacks and the next generation of water reform needs to undertake a shift in perspective from restoration to highly targeted management of particular values.

Collectively, these failings need to be addressed by an informed public debate on what we want one of Australia’s iconic natural ecosystems to look like. We can reduce the Murray-Darling Basin to a landscape focused only on agricultural productivity, with a steadily declining set of natural values as climate change and other stressors bite. We could dramatically reset water allocations to favour environmental values and accept the social and economic costs that would ensue.

Or we can continue to seek a balance.

But that balance requires a consensus on what the Murray-Darling Basin will look like in our grandchildren’s time. What better time to start that discussion than on World Water Day.

Words by Professor Ross Thompson.

Ross is the Director of the Centre for Applied Water Science at the University of Canberra. He has published widely on the effects of drought, land-use change and water management on freshwater ecosystems. He currently co-leads the Basin Scale assessment of the effects of environmental watering on ecosystems, funded by the Commonwealth Environmental Water Office. Ross is a lead Councillor on the Biodiversity Council and is heavily engaged in issues around Indigenous reconciliation in natural resource management.

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