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More on the National Water Initiative

July 23rd, 2004

I was overseas when the Council of Australian Governments (bearer of the unlovely acronym COAG) announced the details of the National Water Initiative. Based on the newspaper reports I read at the time, my preliminary evaluation was quite negative.

I’ve now had the chance to read the actual announcement and supporting documents, and I’m feeling a lot happier. The crucial clause is the one about reductions in water usage, which says

a framework that assigns the risk of future reductions in water availability as follows: -

* reductions arising from natural events such as climate change, drought or bushfire to be borne by water users,

* reductions arising from bona fide improvements in knowledge about water systems’ capacity to sustain particular extraction levels to be borne by water users up to 2014. After 2014, water users to bear this risk for the first three per cent reduction in water allocation, State/Territory and the Australian Government would share (one-third and two-third shares respectively) the risk of reductions of between three per cent and six per cent; State/Territory and the Australian Government would share equally the risk of reductions above six per cent,

* reductions arising from changes in government policy not previously provided for would be borne by governments, and

* where there is voluntary agreement between relevant State or Territory Governments and key stakeholders, a different risk assignment model to the above may be implemented;

This seems like a pretty good balance to me. The ten years to 2014 should provide enough time to deal reasonably with the worst mistakes of the past. After that, it’s fair enough that governments should bear most of the risk if they’ve still overallocated water.

A nice feature for me is that the time-scale fits neatly with my proposal for governments to meet environmental goals by purchasing reversion rights for water allocations in ten years’ time.

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