Water, water everywhere

There’s been a lot happening in water policy lately, and for once, most of the news is good. Most importantly, it’s been raining, a lot. The total volume of the recent rains has been estimated at around 6000 Gigalitres. Even after diversions, evaporation, absorption by the soil, refilling of water tables and so on, there will be somewhere between 600 and 1000 GL to flow down the Murray and stave off the disaster threatening the Lower Lakes, as well as many upstream ecosystems.

Meanwhile, the Rudd government’s decision to bite the bullet and start buying water from irrigators willing to sell has been thoroughly vindicated. The money has been a huge benefit to farmers keen to move out of agriculture, or from irrigated agriculture to dryland, and has done a lot to soften the impact of the drought. Most recently, a couple of irrigation districts have voted to sell en masse with a resulting saving in the cost of irrigation channels and other infrastructure. In a situation where too much water had been allocated to irrigation, and where (despite the current rain) there is likely to be less in the future, this is a necessary part of the adjustment process.

The government has copped some flak (recently in the Fin, for example) because the prices it paid last year were higher than in previous years (when the government was not in the market) or this year, following the rain. I’m surprised to see the Fin ignorant of basic principles of supply and demand. It’s obvious that, once environmental values are taken into account, the demand for water will rise, and therefore so will the price. And it’s equally obvious that plentiful rain is going to reduce the market price of water entitlements. This effect will be biggest for temporary (annual) entitlements, but it will also be present for permanent entitlements.

Buying water is much more cost-effective, in most cases, than public engineering projects aimed at saving water. Given a market price for water, farmers and irrigation suppliers have every incentive to find the cost-effective solutions themselves. Nowhere is this more evident than in the case of the Victorian government’s Food Bowl Modernisation project. I was one of a number of economists interviewed by the Sunday Age, all of whom said this was a silly idea. In fact, I was more sympathetic than most, since I recognised the political constraints on the government – even after paying something like $4000/GL saved, they are still facing resistance to supplying any of this water to Melbourne.

It now seems likely that the government can, if it chooses, buy back 1500 GL of entitlements for the environment (the highest level considered in the Living Murray exercise that was killed off under Howard) and still have plenty of change from the $10 billion allocated under Howard’s National Action Plan. Rather than dissipate this in engineering works in the Basin, where we already have a functioning market, I’d like to see at least some of it allocated to the problems of North Queensland, where runoff from agriculture and urban development is one of the major stresses (along with climate change and fishing pressure) threatening the survival of the Great Barrier Reef.

50 thoughts on “Water, water everywhere

  1. For alcoholics, the first step towards getting sober is admitting you have a problem. So it is here. Let’s have the debate in two parts.
    First I want to convince people (our leaders especially) that overpopulation is a problem, both environmentally and economically. I want people to realize that economic costs arising from resource constraints are far higher than that from an aging population. I want people like Fran Kelly to stop repeating the ludicrous claim that population growth “saved us” from a GDP recession last year. We had a GDP per capita recession, and population growth obscured it. I want Wayne Swan to stop warning that a halt to population growth would “endanger” our GDP growth. GDP doesn’t matter, only GDP per capita does.
    Second I want to convince people that there are population policy levers, and that at the moment they’re pushing the wrong way. The baby bonus is a deliberately pro-natalist policy. Remember “One for the father, one for the mother, one for the nation?” If we scrapped it, people would have less babies. The immigration rate is under direct government control. If we reduced it back down to say, the 1990 level, the population would grow more slowly. How is that racist? Who is advocating for immigration restrictions based on ethnicity? Neither of those measures are particularly draconian, xenophobic, murderous or vacuous. They might or might not allow us to achieve a 26 million cap, but we would be in a lot better shape than if we do nothing.

  2. The population debate appears to have decamped to this thread, so I’ll just repost what I said there this morning:

    Neither Fran nor I are growth fetishists, we would both wish for a sustainable and stable world population at a level probably well below the current level. But if wishes were horses, beggars would ride. By nature I self-identify as a pragmatist and I’m sure Fran does as well (dunno, never met her). Given that the world population will likely exceed 9 billion, and given that we as Australians both are and should be part of it, Fran and I both think that it’s not only fanciful but wrong to try and achieve population reductions in Australia at this time. If and when the external environment changes, then it would good to aim for a more idealistic target.

    In the meantime, for those concerned, I suggest you take up the final offer.

    Not that I would presume to speak for Fran.

    BTW, I know lots of recent parents. I don’t know one of them that has ever remotely suggested, even jokingly, that the baby bonus made a scintilla of difference to their decision.

    I do know several that found parenting (who am I kidding, mothering) extremely difficult to juggle with work.

  3. We are getting off topic, and I apologize for starting this. I just wanted to make a quick comment about racism in the population debate. Many people believe that “population growth skeptics” are really just using high-sounding environmental principles as a cover for their secret populist racism.
    The alternative view I want to suggest is that populist racism (usually) only arises when people have to struggle for scarce resources. Most people are happy to “celebrate diversity,” until they experience the real economic problems that overcrowding causes. When they have to compete ever more fiercely for a share of the pie, it’s natural to blame newcomers.

  4. @Fran Barlow
    The reason I want to stop population growth is precisely because I fear death and misery will follow if we don’t. Death and Misery are things to be avoided. If we caused them to happen in order to stop population growth, we wouldn’t achieve very much. So we’re agreed on that. Let’s not kill people in order to achieve population goals. Let’s instead, as a first step, stop trying to increase our population as fast as possible.
    Are you happy to remove the baby bonus?

  5. Deleted. Jack, you are banned for a week. When you return, please respect my request to post nothing whatsoever that mentions race, IQ, immigration or population in any way, directly or indirectly. This is your last warning.

    Could other commenters please refrain from responding to Jack.

  6. Fran, fear of being seen as xenophobic stifled necessary population debate for decades. It doesn’t wash anymore. You are becoming offensive and strident. It doesn’t help your case that’s for sure. I thought you were hot on protecting the environment and as it’s too many of us Humans that’s doing the damage I am surprised at the position you have taken. If there are xenophobes getting a lift from this issue so what? A thirsty man doesn’t stay at the pub doorstep because he has a few flies on his back. The importance of the issue is far greater and far above xenophobia. And political ideology.

  7. OK, nothing more on population, please. I propose a post on this topic soon, which I will police very closely, while allowing for a broad-ranging discussion. In the meantime, there’s plenty to talk about with water.

  8. @jquiggin
    Ok. By the way, how would you propose to deal with the issue of urban water runoff hurting the reef in North Queensland? What do you think of storm-water harvesting? Also, are there any credible plans you know of for mangrove swamp reforestation, in order to prevent the nitrates getting to the reef?

  9. @Salient Green

    I thought you were hot on protecting the environment


    and as it’s too many of us Humans that’s doing the damage I am surprised at the position you have taken.

    Actually, you are exaggerating. Yes, one can say that both the aggregate demand on ecosystem services and the patterns of demand from humans in concert are a serious contributing factor to the problem. As an egalaitarian, a humanist and a humanitarian it’s incumbent on me to reconcile this problem with the ethical claims implied.

    If there were some magical way of unwinding the last 64 years of policy on a world scale and having it over then I’d be there, but there isn’t.

    It seems to me the main difference we have is not population at all, but where the problem lies, and the question of burden sharing.

    For mine, the problem lies almsot entirely outside of Australia, and what we ought to be doing is everything we reasonably can to foster equitable and sustainable policy in places where the birth rate is at odds with stabilisation. If that resulted in a non-coercive and equitable policy that stabilsied at, say, 8.5 billion of which Australia had 40 million, I’d count that as a success for humanity and as reflecting well on us. You, presumably, would not.

  10. for several decades working-age people would have to support more youth, as well as you’d just be adding a youth dependency problem to your age dependency problem.

    But DD, the baby-boom period of the late 50s and 60s (ie. an extreme level of “youth dependency”) has gone down in history as a time of burgeoning prosperity.

    I have a feeling the “problems” expected from the ageing of the population oh noes!! are vastly overstated, but admit I have no proof. Still, the high youth dependency in the 60s didn’t seem to hurt the economy any.

  11. To be slightly fair to John Brumby, much of his water agenda is ‘democratic’ as he is basing his actions on what the affected people clearly want. Which doesn’t help that it’s mostly pretty wrong. Of course, the issue is that there are a small class of badly affected potential losers, and a large class of slightly affected potential winners. Losers make much more noise.

    Still, that’s what government’s for, isn’t it?

    Sometimes it would be nice to live in a technocracy.

    I still can’t quite fathom what the problem is with recycling waste water to human consumption standards, and why desalination is considered preferable.

  12. There’s no problem at all recycling water. In most cases the water will be of a higher standard than what one gets out of dams. It’s especially silly since the bulk of water is used for washing ourselves, our clothes, our cars and flushing our toilets. Throw in the fact that much urban water is used in settings where how potable it is doesn’t count — manufacture, swimming pools, water grounds and really, it’s just silly.

    The real constraint to doing recycling is not the availability of water but the cost and complexity of the infrastructure needed to deliver it. Having parallel recycled, greywater, desal and conventional water systems would simply not make sense in cost-benefit terms. What you really would want to do is to take all of the water you have, get it to the minimum standard you need for all purposes and deliver that through one set of reserves and pipes and pumps. Collecting stormwater is not easy, and cleaning it even less so.

    Conceivably, if there were concentrated large scale industrial estates, one might be able to shift grey water in bulk to them and even create some recylcling facility that was cost effective. As I’ve suggested elsewhere, you might be able to create housing estates that were able to collect their own run off and sewage, and pump it to a local treatment plant that could then be fed back into the system via the nearest reservoir. But the engineering and planning would not be a simple thing.

  13. Fran, my concerns relate to the political rather than the practical concerns with recycling. Coming out of the SETP, much of Melbourne’s water would be well placed to be pumped back to Cardinia reservoir for reuse.

    A goodly proportion of class A water is used coming out of Werribee, but the farmers have apparently had some genuine problems there.

    Stormwater recapture and recycling is a bit of a myth I’m afraid. Too many outlets, carrying too variable a flow, with too pricey a real estate for treatment plants. The good people of St Kilda and Brighton can’t fit treatment plants on the foreshore, this is a simple fact.

  14. @Fran Barlow
    Has the cost of residential water tanks for flushing toilets and watering gardens been compared with an estate level water treatment system with dual supply? I wonder if residential water tanks have had any measureable impact on water use levels? One would think that residential water tanks would be a lot more expensive per litre, but then again the costs of building infrastructure in Australia seems to have blown out to fantastic sums – $600 Million to increase traffic at one intersection!

  15. @wilful

    “Most of those in the northern suburbs who use this water are unaware that it is recycled sewage produced by other Melburnians living around Lilydale. The Winneke purification plant has operated without customer complaint for almost 30 years on the principle that what the people don’t know won’t hurt the politicians.”

    from “Undrinkable water is the next problem”

  16. Recycling water is fine as long as the government doesnt disintegrate under mountains of debt. Then Id trust the government more than I trusted the water supply, and thats saying something. The problem is the “lower our taxes and lower them again” mobs keep baying…In that case I want real water thanks…than the ffluent that might just come through my drinking taps.

    I think its time to get real on recycled water – givernmets cant even manage current catchments – what makes you think they can manage recycled water supply? Its pretty disgraceful really – in Australia our population is relativcely small but you would think we have breached all manageable limits

    Perhaps according only to the greedy who want their taxes lowered further – but Im damn sure if you asked every european or every US citizen – they might just say – “what sort of an inept government is planning these things in Australia”?

    Welcome to roos and robotsville.

  17. Your post is spot on, Alice.

    If we could trust the water recycling technology to work precisely as it is intended 365×24 and it doesn’t have to deal with any unexpected and exotic highly toxic materials such as can find their way into our water drains from hospitals, then it just might be OK.

    But in the real world we can expect the operators, particularly if they are private operators, to cut corners and make mistakes and have to deal with unexpected contingencies.

    It is criminally stupid for our political rulers to force us to rely on such expensive and complex technology to supply such a basic need.

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