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Shepherding WaterProfessor Mike Young Research Chair, Water Economics and Management Executive Director, The Environment Institute The University of Adelaide
MDBA Northern Basin Ecological Assets Forum, February 2009
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“Careless shepherd make excellent dinner for wolf.“
Earl Derr Biggers
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Regulated v’s unregulated systems
Capture of episodic flows as they go past1. Unregulated river systems2. Overland flow harvesting
Entitlement definition– Flow-rate thresholds announced on a daily basis– Maximum daily volume– Maximum storage volume
Entitlements can be complicated– Many licences operate under 2 or 3 flow-rate thresholds– Some licences contain more than 20 flow-rate thresholds
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Questions1. How can trading be facilitated? 2. What administrative arrangements
needed to “shepherd” water to the end of the system?
3. What is the best way to deal with shifts– To a drier climatic regime?– In environmental preference?– In system state?
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Sharing the available water
Complexity - a simple system or one that considers– System dryness– Health of downstream wetlands– Needs of downstream entitlement holders– Interests of landholders whose animals graze
on floodplainsThe more that flow is used, the more
sophisticated the system needs to be and the more it costs to manage!
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Flow sharing
Flow rate (ML/day)
Volume in the system
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Trading• Existing allocation system likely to be
sub-optimal in an ever changing world• Strong case for facilitating trade
– To allow better consumptive use– To allow purchase for environmental
asset enhancement• Within reaches• Among reaches• Among systems
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Facilitating Trade• When entitlements defined solely by flow rate
at the pump or diversion structure, trading does not make sense when others can take it.
• Solution to divide system into reaches and define each entitlement by flow rate at the top of the reach => within-reach trading
• Trading among reaches requires capacity to raise or lower the flow rate announcement thresholds on event by event basis.
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Between reach trading
Flow rate (ML/day)
Volume in the system
Flow rate (ML/day)
Volume in the system
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Accounting for transmission losses
Options1. Conservative Exchange Rate
– Inefficient2. Tagged trading
– Assigns long-run exchange rate risk to trader
– Allows refinement of models
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Upstream v’s downstream• When one moves the pumping or diversion point
upstream, the interests of other pumpers, landholders who benefit from grazing floodplains and the environment need to be taken into account.
• To protect floodplain and grazing interests– Only allow trading downstream?– Allow trials using tagged trading (esp. through reaches)
• But remember that, the further water is traded
downstream, the greater are the losses.
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Shepherding water downstream
• From Queensland to South Australia– Every announcement threshold would
need to be changeable on an event by event basis
– Require a considerable degree of co-ordination and communication among river managers and jurisdictions
– Refinement of interstate water sharing agreements would be necessary
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Adverse climate shifts• In most unregulated systems, entitlement
holders get access to a larger proportion of the volume of low flow events– Possible solution would be to define flow-rate
thresholds as a function of a long-run moving average
– Note also that if there is a shift to drier climatic regime, all downstream users will get fewer opportunities to harvest water.
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Flow management?
Less water is required to optimise the value of ecological assets if the system form can be manipulated
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Where to from here?1. A dynamic Basin Plan?2. New interstate water sharing agreement?3. Definition of reaches and monitoring
points at top of each reach?4. Redefinition of entitlements?5. New (tagged) trading rules?6. New governance system that allows
shepherding and empowers river and environmental managers?
7. System structure manipulation?
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Contact:
Prof Mike YoungWater Economics and ManagementEmail: [email protected]: +61-8-8303.5279Mobile: +61-408-488.538 www.myoung.net.au
Download our reports and subscribe to Jim McColl and my droplets at
www.myoung.net.au
The PowerPoint slides from this talk can be downloaded from our website