Climate change and water planning in the Murray-Darling Basin, Australia

March 17th, 2014

Prof. R. Quentin Grafton, Dr. Jamie Pittock, Dr. John Williams, Dr. Qiang Jiang, Prof. Hugh Possingham & Prof. John Quiggin

At a global level, per capita water availability is declining in many countries. If water availability continues to fall, it will exacerbate underlying tensions between extractive and non-consumptive uses of fresh water and, under business-as-usual, result in environmental decline. This is of global importance because: (1) more than a third of humanity lives in regions with less than one million litres of fresh water per person per year, (2) population growth will increase water demand, and (3) climate change in arid and semi-arid areas may reduce water availability.

In a recent study1 we analysed the impact of water scarcity, excess water demand, and climate change within the context of water reform in a specific region: the Murray-Darling Basin of southeastern Australia. This research presented issues arising from the ecosystem impacts of current water reform; considered the costs and benefits of reallocating an increased share of the available surface water to environmental flows; and provided insights about how to improve basin-wide water management.

The Murray-Darling Basin (MDB) offers globally relevant insights into the implementation of water reform and planning in a region with highly variable and declining water availability. Planned MDB reforms seek to improve aquatic ecosystems without damaging the value of agricultural production. The MDB is noteworthy as: (1) being one of the world’s most variable regions in terms of streamflows and precipitation; (2) the large size of its water extractions relative to inflows; (3) the relative importance of irrigated agriculture in terms of both its diversions and economic value added; (4) the size of the proposed reductions in water extractions within a basin-wide water planning framework; and (5) the extensive use of markets for water reallocation.

The rapid expansion of irrigation development in the MDB from the 1950s to 1980s was conducted without consideration of regional climate variability. This peak period of expansion occurred during an observable wet period: both the mean and variance of annual rainfall increased and were higher than during the preceding period of 1900 to l950. While further expansions in water allocations were capped in 1995, it was not until the decade-long Millennium Drought (2000-2010) that water for irrigated agriculture systematically declined. This drought led to a 40 per cent decline in runoff over 1997-2008 in the southern MDB relative to the long-term mean. Across 2002-2007, average annual net inflows in the Murray River were the lowest ever recorded for a five-year period. Under water planning rules within the MDB that favour extraction over environmental flows, this resulted in the proportion of inflows diverted for agriculture in the River Murray to increase from less than 50 per cent in the 1980s and 1990s to 76 per cent over the period 2000-2008. Approximately 90% of the water extracted in the basin as a whole, including water losses and conveyance, is diverted for irrigation agriculture.2

Survey data from the Australian Bureau of Statistics compiled during the Millennium Drought show that, despite a decline in irrigated water use of about 70 per cent between 2000-2001 and 2007-2008, the nominal gross value of irrigated agricultural production fell, in nominal terms, by less than one per cent.3 A critical factor in this adjustment was the substitution to higher value crops and horticulture facilitated by water markets. This suggests that, at least in the short run, irrigated agriculture can cope remarkably well with very large reductions in water allocation.

The Murray-Darling Basin Authority (MDBA), the organisation responsible for Basin-wide water planning, originally proposed a minimum of 60 per cent of natural flows within rivers to protect key environmental assets and ecosystem functions, but subsequently agreed to reallocate a lesser amount of water for environmental purposes in the 2012 Basin Plan equivalent to about one quarter of long-term extractions. The 2012 Basin Plan prepared by the MDBA also allows for increased groundwater diversions equivalent to about 10 per cent of average surface water extractions for irrigation.

Increased groundwater allocations from connected aquifers will likely reduce river inflows, especially base flows. If this were to be the case, higher groundwater diversions may mean the proscribed constraints on surface water extractions, defined as sustainable diversion limits in the Basin Plan 2012, have been set at too high a level to achieve the intended environmental benefits. Another challenge is that the 2012 Basin Plan leaves unchanged the seasonal water sharing rules that favour water extractions over environmental flows and that proved ecologically damaging during the Millennium Drought.

Climate projections in terms of precipitation and runoff are highly uncertain. Nevertheless, the median 2030 scenario from the Commonwealth Scientific and Industrial Research Organisation4 suggests that Basin inflows could suffer a small decline (12 per cent) relative to the historical climate (1895-2006), but outflows would decline by a much greater proportion (24 per cent). The concern is that the median scenario has been used in government policy making, but has not been explicitly accounted for in the 2012 Basin Plan which makes no allowance for climate change in terms of current sustainable diversion limits.

Overall, our finding is that despite the adoption of a Basin Plan in 2012 that provides for a reallocation of water to the environment, water consumption will, in the presence of droughts, likely continue to degrade river and floodplain landscapes and generate large losses in terms of amenity, cultural, and existence values. Insights from the MDB for other rivers basins include:

Irrigation water extraction drives basin-wide impacts in terms of regional river runoff;

The reallocation of water from extraction to environmental flows is critical to effectively respond to the effects of droughts and drying trends on riparian eco-systems;

In the presence of well-functioning water markets, the reallocation of water from extractive to non-consumptive uses can substantially reduce the adjustment costs on irrigated agriculture; and,

Equal-proportional reductions in extractions and environmental flows, an adaptation response to reduced inflows during droughts, can be achieved with only a small decline in the value added of irrigated agriculture.

References:

1. Grafton, R.Q., Pittock, J., Williams, J., Jiang, Q., Possingham, H. and J. Quiggin (2014), ‘Water Planning and Hydro-Climatic Change in the Murray-Darling Basin, Australia’, Ambio 3 March 2014, DOI: 10.1007/s13280-014-0495-x. Australian Bureau of Statistics (2009), Australian Bureau of Agricultural and Resource Economics-Bureau of Rural Sciences, pp. 1-2, 9-11, 57-58. Kirby, M., Bark, R., Connor, J., Qureshi, M.E. and S. Keyworth (in press), ‘Sustainable irrigation: How did irrigated agriculture in Australia’s 1 Murray-Darling Basin adapt in the Millennium Drought? Agricultural Water Management. Commonwealth Scientific and Industrial Research Organisation (2009), ‘Advice on defining climate scenarios for use in the Murray-Darling Basin Authority basin plan modelling’, MDBA Technical Report Series: Basin Plan BP01. Canberra: Murray-Darling Basin Authority.

R. Quentin Grafton is Professor of Economics at the Crawford School of Public Policy, The Australian National University (ANU). Jamie Pittock is Senior Lecturer is at the Fenner School of Environment and Society, ANU. John Williams is Adjunct Professor at the Crawford School of Public Policy, ANU, and a member of the Wentworth Group of Concerned Scientists. His research interests include sustainable management of natural resources. Qiang Jiang is an Assistant Professor at Szechuan University, China and fellow of the Centre for Water Economics & Environmental Policy (CWEEP) at the ANU. Hugh Possingham is a Professor of Mathematics and a Professor of Ecology at The University of Queensland (UQ). John Quiggin is Australian Laureate Fellow at UQ. This article is based on an original journal article published by the Royal Swedish Academy of Sciences in the journal Ambio, ‘Water Planning and Hydro-Climatic Change in the Murray-Darling Basin, Australia‘, Published online 28 February 2014, Digital Object Identifier (DOI): 10.1007/s13280-014-0495-x.

The views expressed in this article belong to the individual authors and do not represent the views of the Global Water Forum, the UNESCO Chair in Water Economics and Transboundary Water Governance, UNESCO, the Australian National University, or any of the institutions to which the authors are associated. Please see the Global Water Forum terms and conditions here.