Water markets are not perfect, but vital to the future of the Murray-Darling Basin

Neal Hughes, Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES)

Water markets have come in for some bad press lately, fuelled in part by the severe drought of 2019 and resulting high water prices.

They have also been the subject of an Australian Competition and Consumer Commission inquiry, whose interim report released last year documented a range of problems with the way water markets work in the Murray-Darling Basin. The final report was handed to the treasurer last week.

While water markets are far from perfect, new research from the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) has found they are vital in helping the region cope with drought and climate change, producing benefits in the order of A$117 million per year.

To make the most of water markets, we will need to keep improving the rules and systems which support them. But with few “off-the-shelf” solutions, further reform will require both perseverance and innovation.

Water markets generate big benefits

Australia’s biggest and most active water markets are in the southern Murray-Darling Basin, which covers the Murray River and its tributaries in Victoria, NSW and South Australia.

Each year water right holders are assigned “allocations”: shares of water in the rivers’ major dams. These allocations can be traded across the river system, helping to get water where it is most needed.

Water markets also allow for “carryover”: where rights holders store rather than use their allocations, holding them in dams for use in future droughts.

Our research estimates that water trading and carryover generate benefits to water users in the southern Murray-Darling, of A$117 million on average per year (around 12% of the value of water rights) with even larger gains in dry years. Carryover plays a key role, accounting for around half of these benefits.

Together water trading and carryover act to smooth variability in water prices, while also slightly lowering average prices across the basin.

There’s room for improvement

One of many issues raised in the Australian Competition and Consumer Commission interim report was the design of the trading rules, including limits on how much water can move between regions.

These rules are intended to reflect the physical limits of the river system, however getting them right is extremely difficult.

The rules we have are relatively blunt, such that there is potential at different times for either too much water to be traded or too little.

One possible refinement is a shift from a rules-based system to one with more central coordination.

For example, in electricity, these problems are addressed via so-called “smart markets”: centralised computer systems which balance demand and supply across the grid in real-time.

Such an approach is unlikely to be feasible for water in the foreseeable future.

But a similar outcome could be achieved by establishing a central agency to determine inter-regional trade volumes, taking into account user demands, river constraints, seasonal conditions and environmental objectives.

While novel in Australia, the approach has parallels in the government-operated “drought water banks” that have emerged in some parts of the United States.

Some of the good ideas are our own

Another possible refinement involves water sharing rules, which specify how water allocations are determined and how they are carried over between years.

At present these rules are often complex and lacking in transparency. This can lead to a perceived disconnect between water allocations and physical water supply, creating uncertainty for users and undermining confidence in the market.

Although markets in the northern Murray-Darling Basin are generally less advanced than the south, some sophisticated water sharing systems have evolved in the north to deal with the region’s unique hydrology (highly variable river flows and small dams).

Beardmore Dam at St George in Southern Queensland, where water markets operate under a capacity sharing system.
ABARES

There is potential for the southern basin to make use of these northern innovations (known as “capacity sharing” or “continuous accounting”) to improve transparency and carryover decisions.

Don’t throw the market out with the river water

Governance failures in the water market have led to understandable frustration.

But it is important to remember how vital trading and carryover are in smoothing variations in water prices and making sure water gets where it is needed, especially during droughts.

The ACCC’s final report (due soon) will provide an opportunity to take stock and develop a roadmap for the future.

Water markets will be discussed at Today’s ABARES Outlook 2021 conference in an online panel session at 3-4pm AEDT.

Neal Hughes, Senior Economist, Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES)

This article is republished from The Conversation under a Creative Commons license. Read the original article.

We looked at 35 years of rainfall and learnt how droughts start in the Murray-Darling Basin

Chiara Holgate, Australian National University; Albert Van Dijk, Australian National University, and Jason Evans, UNSW

The extreme, recent drought has devastated many communities around the Murray-Darling Basin, but the processes driving drought are still not well understood.

Our new study helps to change this. We threw a weather model into reverse and ran it back for 35 years to study the natural processes leading to low rainfall during drought.

And we found the leading cause for drought in the Murray-Darling Basin was that moisture from oceans didn’t reach the basin as often as normal, and produced less rain when it did. In fact, when moisture from the ocean did reach the basin during drought, the parched land surface actually made it harder for the moisture to fall as rain, worsening the already dry conditions.

These findings can help resolve why climate models struggle to simulate drought well, and ultimately help improve our ability to predict drought. This is crucial for our communities, farmers and bushfire emergency services.

There’s still a lot to learn about rain

The most recent drought was relentless. It saw the lowest rainfall on record in the Murray-Darling Basin, reduced agricultural output, led to increased food prices, and created tinder dry conditions before the Black Summer fires.

Drought in the Murray-Darling Basin is associated with global climate phenomena that drive changes in ocean and atmospheric circulation. These climate drivers include the El Niño and La Niña cycle, the Indian Ocean Dipole and the Southern Annular Mode.

Each influences the probability of rainfall over Australia. But drivers like El Niño can only explain around 20% of Australian rainfall — they only tell part of the story.

To fully understand the physical processes causing droughts to begin, persist and end, we need to answer the question: where does Australia’s rainfall come from? It may seem basic, but the answer isn’t so simple.

Where does Australia’s rainfall come from?

Broadly, scientists know rainfall derives from evaporation from two main sources: the ocean and the land. But we don’t know exactly where the moisture supplying Australia’s rainfall originally evaporates from, how the moisture supply changes between the seasons nor how it might have changed in the past.

To find out, we used a sophisticated model of Australia’s climate that gave data on atmospheric pressure, temperature, humidity, winds, rainfall and evaporation.

We put this data into a “back-trajectory model”. This traced the path of water from where it fell as rain, backwards in time through the atmosphere, to uncover where the water originally evaporated from. We did this for every day it rained over Australia between 1979 and 2013.

Not surprisingly, we found more than three-quarters of rain falling in Australia comes from evaporation from the surrounding oceans. So what does this mean for the Murray-Darling Basin?

Up to 18% of rain in the basin starts from the land

During the Millennium Drought and other big drought years (such as in 1982), the Murray-Darling Basin heavily relied on moisture transported from the Tasman and Coral seas for rain. Moisture evaporated off the east coast needs easterly winds to transport it over the Great Dividing Range and into the Murray-Darling Basin, where it can form rain.

This means low rainfall during these droughts was a result of anomalies in atmospheric circulation, which prevented the easterly flow of ocean moisture. The droughts broke when moisture could once again be transported into the basin.

A lack of vegetation on the land can exacerbate drought.
Shutterstock

The Murray-Darling Basin was also one of the regions in Australia where most “rainfall recycling” happens. This is when, following rainfall, high levels of evaporation from soils and plants return to the atmosphere, sometimes leading to more rain – particularly in spring and summer.

This means if we change the way we use the land or the vegetation, there is a risk we could impact rainfall. For example, when a forest of tall trees is replaced with short grass or crops, humidity can go down and wind patterns change in the atmosphere above. Both of these affect the likelihood of rain.

In the northern part of the basin, less evaporation from the dry land surface exacerbated the low rainfall.

On the other hand, when the drought broke, more moisture evaporated from the damp land surface, adding to the already high levels of moisture coming from the ocean. This meant the region got a surplus of moisture, promoting even more rain.

This relationship was weaker in the southern part of the basin. But interestingly, rainfall there relied on moisture originating from evaporation in the northern basin, particularly during drought breaks. This is a result we need to explore further.

Summer rain not so good for farmers

Rainfall and moisture sources for Australia and the Murray-Darling Basin are changing. In the past 35 years, the southeast of the country has been receiving less moisture in winter, and more in summer.

This is likely due to increased easterly wind flows of moisture from the Tasman Sea in summer, and reduced westerly flows of moisture from the Southern Ocean in winter.

This has important implications, particularly for agriculture and water resource management.

For example, more rainfall in summer can be a problem for horticultural farms, as it can make crops more susceptible to fungal diseases, decreases the quality of wine grape crops and affects harvest scheduling.

Less winter rain also means less runoff into creeks and rivers — a vital process for mitigating drought risk. And this creates uncertainty for dam operators and water resource managers.

Understanding where our rainfall comes from matters, because it can improve weather forecasts, seasonal streamflow forecasts and long-term rainfall impacts of climate change. For a drought-prone country like Australia — set to worsen under a changing climate — this is more crucial than ever.

Chiara Holgate, Hydrologist & PhD Candidate, Australian National University; Albert Van Dijk, Professor, Water and Landscape Dynamics, Fenner School of Environment & Society, Australian National University, and Jason Evans, Professor, UNSW

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Morrison government plan to scrap water buybacks will hurt taxpayers and the environment

Quentin Grafton, Crawford School of Public Policy, Australian National University

The Morrison government today declared it will axe buybacks of water entitlements from irrigators, placating farmers who say the system has damaged their livelihood and communities.

Instead, Water Minister Keith Pitt says the government will scale up efforts to save water by upgrading infrastructure for farming irrigators in the Murray Darling Basin.

The move will anger environmentalists, who say water buybacks are vital to restoring flows to Australia’s most important river system. It also contradicts findings from the government’s own experts this week who said farm upgrades increase water prices more than buyback water recovery.

The government has chosen a route not backed by evidence, and which will deliver a bad deal to taxpayers and the environment.

A farmer stands in the dry river bed of the Darling River — The government will no longer buy water from farmers for the environment.
Dean Lewins/AAP

A brief history of water buybacks

Farmers along the Murray Darling are entitled to a certain amount of river water which they can use or sell. In 2008, the federal Labor government began buying some of these entitlements in an open-tender process known as “buybacks”. The purchased water was returned to the parched river system to boost the environment.

In 2012, the Murray Darling Basin Plan was struck. It stipulated that 2,750 billion litres of water would be bought back from irrigators and delivered to the environment every year. The buyback system was not universally supported – critics claim buybacks increase water prices, and hurt farmers by reducing the water available for irrigation.

The Coalition government came to office in 2013 and adopted a “strategic” approach to water buybacks. These purchases were made behind closed doors with chosen irrigators.

In a review of these buybacks released last month, the Australian National Audit Office found many of these taxpayer-funded deals were not good value for money.

The federal government ordered the review after controversy involving the 2017 purchase of water from two Queensland properties owned by Eastern Australia Agriculture.

The government paid A$80 million for the entitlements – an amount critics said was well over market value. The deal was also contentious because government frontbencher Angus Taylor was, before the purchase, a non-financial director of the company. The company also had links to the Cayman Islands tax haven.

Keith Pitt speaks in Parliament as Prime Minister Scott Morrison watches on — Water Minister Keith Pitt, pictured during Question Time, is the minister responsible for the new approach.
Mick Tsikas/AAP

Infrastructure subsidies: a flawed approach

The Coalition government is taking a different approach to recover water for the environment: subsidising water infrastructure on farms and elsewhere. This infrastructure includes lining ponds and possibly levees to trap and store water.

The subsidies have cost many billions of dollars yet recover water at a very much higher cost than reverse tenders. This approach also reduces the water that returns to streams and groundwater.

The justification for water infrastructure subsidies is that they are supposedly less damaging to irrigation communities. But the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) concluded in a report published this week that on-farm water infrastructure subsidies, while beneficial for their participants, “push water prices higher, placing pressure on the wider irrigation sector”. This is the very sector the subsidies purport to help.

So why would the government expand the use of water infrastructure when it costs more and isn’t good value for money? The answer may lie in this finding from the ABARES report:

Irrigators who hold large volumes of entitlement relative to their water use (and are frequently net sellers of water allocations) may benefit from higher water prices, as this increases the value of their entitlements.

Farmers with limited entitlement holdings however may be adversely affected, as higher water prices increase their costs and lowers their profitability.

In other words, the “big end of town” benefits – at taxpayers’ expense – while the small-scale irrigators lose out.

Missing water

Adding insult to injury, the Wentworth Group of Concerned Scientists released a detailed report this week showing the basin plan is failing to deliver the water expected, even after accounting for dry weather. Some two trillion litres of water is not in the rivers and streams of the basin and appears to have been consumed – a volume that could be more than four times the water in Sydney Harbour.

The Wentworth Group says stream flows may be less than expected because environmental water recovery has been undermined by “water-saving” infrastructure, which reduces the amount of water that would otherwise return to rivers and groundwater.

This infrastructure, on which taxpayers have spent over A$4 billion, has not had the desired effect. Research has found those who receive infrastructure subsidies increased water extractions by more than those who did not receive subsidies. That’s because farmers who were using water more efficiently often planted thirstier crops.

Dusk at Menindee Lakes in the Murray Darling Basin — The government took a strategic approach to water buybacks in the Murray Darling Basin.
Shutterstock

We deserve better

It’s clear taxpayer dollars are much better spent buying back water entitlements, through open tenders, rather than subsidising water infrastructure. We can, and must, do much better with water policy.

Today, the federal government has doubled down on wasteful spending at taxpayer expense – in a time of a COVID-induced recession.

So what is on offer from the Morrison government? Continuing to ignore its own experts’ advice and delivering yet more ineffective subsidies for water infrastructure. Our rivers, our communities, and all Australians deserve much better.

Quentin Grafton, Director of the Centre for Water Economics, Environment and Policy, Crawford School of Public Policy, Australian National University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Recovering water for the environment in the Murray-Darling: farm upgrades increase water prices more than buybacks

Murray Darling Junction, Wentworth NSW.
Hypervision Creative/Shutterstock

Neal Hughes, Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES); David Galeano, Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES), and Steve Hatfield-Dodds, Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES)

It’s been 13 years since the Australian Government set out to develop the Murray-Darling Basin Plan with the goal of finding a more sustainable balance between irrigation and the environment.

Like much of the history of water sharing in the Murray-Darling over the last 150 years, the process has been far from smooth. However, significant progress has been achieved, with about 20% of water rights recovered from agricultural users and redirected towards environmental flows.

One of the most difficult debates has been over how the water should be recovered.

Initially most occurred via “buybacks” of water rights from farmers. While relatively fast and inexpensive, opposition to buybacks emerged due to concerns about their effects on water prices and irrigation farmers and regional communities.

This led to a new emphasis on infrastructure programs including farm upgrades in which farmers received funding to improve their irrigation systems in return for surrendering water rights.

While these farm upgrades are more expensive, it was thought that they would have fewer negative effects on farmers and communities.

However, new research from the Australian Bureau of Agricultural and Resource Economics and Sciences finds that – while beneficial for their participants – these programs push water prices higher, placing pressure on the wider irrigation sector.

Two types of water recovery programs

The Murray-Darling Basin operates under a “cap and trade” system. Each year there is a limit on how much water can be extracted from the basin’s rivers, based on the available supply.

Water users (mostly farmers) hold rights to a share of this limit, and they can trade these rights on a market.

To date 1,230 gigalitres of these water rights have been bought from farmers via buyback programs at a cost of about A$2.6 billion.

The other type of program is farm upgrades which offer farmers funding to improve their irrigation infrastructure in return for a portion of their water rights.

To date 255 gigalitres of water has been recovered through farm upgrades at a cost of about $1 billion.

Annual volume of water rights recovered for the environment since 2007-08

For infrastructure projects the financial year refers to the contract date. The actual transfer of entitlements may occur in a later financial year. The volume of water recovered is expressed in terms of the long-term average annual yield. The estimates do not include water recovered through state projects (160 gigalitres) or water gifted to the Commonwealth (15 gigalitres). Off-farm infrastructure includes water recovered through projects that are a combination of on-farm, off-farm and land purchases.
Sources: Department of Agriculture Water and Environment, Commonwealth Environmental Water Holder

Water recovery has increased prices

As would be expected, the dominant short-term driver of prices is water availability, with large price increases during droughts. The dominant longer-term drivers include lower average rainfall related to climate change and the emergence of new irrigation crops including almonds.

While water recovery has played less of a role, buybacks and farm upgrades have still reduced the supply of water to farmers and increased prices to some extent.

Our modelling suggests water prices in the southern basin are around $72 per megalitre higher on average as a result of water recovery measures, with the effects varying year-to-year depending on conditions.

Modelled water allocation prices with and without water recovery

Price refers to volume weighted average annual water allocation prices across the southern Murray Darling Basin. Water recovery reflects the cumulative volume of buybacks and farm upgrades at each year. Water recovery began in 2007-08.
ABARES modelling

Farm upgrades increase prices more than buybacks

Farm upgrades are often viewed as an opportunity to save water and produce “more crop per drop”.

But they can also encourage farmers to increase their water use as they seek to make the most of their new infrastructure: sometimes referred to as a “rebound effect”.

While there have been concerns about rebound effects for some time, there has been limited evidence until recently.

Less-wasteful irrigation can save water, as long as there’s no ‘rebound’

As would be expected, our study finds that upgraded farms have benefited in terms of profits and productivity. However, we also find large rebound effects, with upgraded farms increasing their water use by between 10% and 50%.

To get the extra water they need to buy it from other farmers, putting pressure on prices. We find the resulting price impact to be much more than the impact of buying back water. Per unit of water recovered, it is about double that of buybacks.

These higher water prices increase the risk that irrigation assets – including some newly upgraded systems – could become stranded as price sensitive irrigation activities become less profitable.

No easy answers

Recovering water through off-farm infrastructure is one alternative, however the most effective projects have already been developed, leaving cost-effective water saving schemes harder to find.

This brings us back to buybacks. Because buybacks are cheaper than farm infrastructure programs, there is more scope to combine them with regional development investments to help offset negative impacts on communities.

The challenge is that in a connected water market the flow-on effects on water prices and farmers can be complex and difficult to predict, making it hard to know where to direct development investments.

A potential middle ground is rationalisation, where parts of the water supply network are decommissioned, and affected farmers are compensated both for their water rights and for being disconnected from water supply. This approach has less effect on water prices and allows regional development initiatives to be targeted to the affected areas.

However, rationalisation can be hard to implement given it requires negotiating with all affected farmers and all levels of government.

Given the complexity of the Murray-Darling Basin, water policy is far from simple. While it is clear more water will be needed to put the basin on a sustainable footing, there are no easy options.

Further progress will require careful policy design to help ease adjustment pressure on farmers and regional communities.

Neal Hughes, Senior Economist, Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES); David Galeano, Assistant Secretary, Natural Resources, Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES), and Steve Hatfield-Dodds, Executive Director, Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES)

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Before and after: see how bushfire and rain turned the Macquarie perch’s home to sludge

Mannus Creek in NSW during the 2020 bushfire period.
Luke Pearce, Author provided

Lee Baumgartner, Charles Sturt University; Katie Doyle, Charles Sturt University; Luiz G M Silva, Charles Sturt University; Luke Pearce, and Nathan Ning, Charles Sturt University

This article is a preview of Flora, Fauna, Fire, a multimedia project launching on Monday July 13. The project tracks the recovery of Australia’s native plants and animals after last summer’s bushfire tragedy. Sign up to The Conversation’s newsletter for updates.

The unprecedented intensity and scale of Australia’s recent bushfires left a trail of destruction across Australia. Millions of hectares burned and more than a billion animals were affected or died. When the rains finally arrived, the situation for many fish species went from dangerous to catastrophic.

A slurry of ash and mud washed into waterways, turning freshwater systems brown and sludgy. Oxygen levels plummeted and water quality deteriorated rapidly.

Hundreds of thousands of fish suffocated. It was akin to filling your fish tank with mud and expecting your goldfish to survive.

Take, for example, the plight of the endangered Macquarie perch (Macquaria australasica), an Australian native freshwater fish of the Murray-Darling river system.

A Macquarie perch.
Luke Pearce, Author provided

A special fish

Macquarie perch were once one of the most abundant fish in the Murray-Darling Basin. Revered by the community and once responsible for supporting extensive Indigenous, recreational, commercial and subsistence fisheries, they are an iconic species found nowhere else in the world. However, they have very specific needs.

Macquarie perch like rocky river sections with clear, fast-flowing water, shaded by trees and bushes on the banks.

Massive change wrought on our rivers over the past century means Macquarie perch are now only found at a handful of locations in the Murray-Darling Basin.

One habitat – Mannus Creek near the NSW Snowy Mountains – is particularly special because it was relatively pristine before the fires. In fact, this creek contained the last population of the threatened Macquarie perch in the NSW Murray catchment. A study in 2017 found a Macquarie perch population that was restricted to a 9km section of the creek but was doing quite well.

That was until bushfire rapidly swept through the catchment in January this year.

Some of us visited the creek three weeks after the fires. The intensity, ferocity and speed of the fires meant nothing was spared. The former forest floor was literally a trail of death and destruction – dead and charred kangaroos, wallabies, deer, possums and birds were everywhere.

All that remained of Mannus Creek was green pools in a blackened landscape, still smouldering days after the fire front passed. We immediately feared for the Macquarie perch we’d sampled, which were quite healthy less than a year before.

To our surprise, some Macquarie perch had survived. But with most of the catchment fully burnt, and no vegetation to stop runoff, we knew it was a ticking time bomb.

A desperate rescue attempt

With little time, we had to remove as many fish as possible from Mannus Creek before the rains arrived. The plan was to create an “insurance population” in case rain caused the water conditions to deteriorate.

We rescued ten fish. Days later, rain washed ash and silt into the channel. Within hours, the once-pristine creek became flowing mud with the consistency of cake mix.

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A government rescue team arrived a few days later to rescue more fish, and despaired at the “wall of ash and mud”.

An ark across Australia

Those ten individual Macquarie perch now live in an “ark” of at-risk species, spanning government and private hatchery facilities.

The ark is housing not only the Macquarie perch but other threatened species too. The rescued individuals, and perhaps their entire species, would have almost certainly perished during runoff events without these interventions.

Now a waiting game begins.

What next for the Macquarie perch?

Nobody knows for sure how many fish survived in Mannus Creek, nor how long it will take for the creek to recover. It could be years.

Ash and mud flow into Lake Macquarie after the fires.
Luke Pearce, Author provided

The challenge now is to support the rescued fish until it’s safe to either return them to the creek, or breed offspring and introduce them to their natural habitat.

Fish must be kept healthy and disease-free in captivity, and enough genetic diversity must be maintained for the population to remain viable.

If these rescued fish are held in captivity for too long, they might die. But equally worrying is that affected waterways may not recover in time to allow reintroduction.

While maintaining the rescued populations, we must redouble our efforts to improve their natural habitats.

Burnt areas can allow pest plant and animal species to take hold and change habitats, so these threats need to be controlled. Finding similar, unburnt refuge areas is also crucial to prepare for future events and protect ecosystem resilience.

Working through these considerations – and quickly – is essential to giving these species the best hope of survival.

Funding, equipment and human resources are desperately needed to help our rivers recover. But we know that without an effective on-ground intervention, recovery could take decades.

For the iconic Macquarie perch, that would be too late.

Lee Baumgartner, Professor of Fisheries and River Management, Institute for Land, Water, and Society, Charles Sturt University; Katie Doyle, Freshwater Ecologist, Charles Sturt University; Luiz G M Silva, Freshwater Fish Scientist, Charles Sturt University; Luke Pearce, Fisheries Manager, and Nathan Ning, Freshwater Ecologist, Charles Sturt University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Restoring a gem in the Murray-Darling Basin: the success story of the Winton Wetlands

Max Finlayson, Charles Sturt University and Lance Lloyd, Federation University Australia

Water use in the Murray-Darling Basin has long been a source of conflict. Damage to rivers and wetlands, including fish kills and algal blooms, has featured prominently in the news.

But the Winton Wetlands, in the south-east basin, represents a bright spot. Its restoration provides a sense of hope that reaches beyond the complexities of history.

The wetlands site is about 2.5 hours drive north-east of Melbourne. It’s now a thriving place for plants and wildlife that attracts plenty of visitors – but it wasn’t always like this.

A laughing kookaburra keeps watch on the wetlands.
Diana Padron/Flickr, CC BY-ND

From dispossession to decommissioning

The Yorta Yorta people were the original Aboriginal inhabitants of the area. They lost access to the land and water when European settlers took it for farming in the 1860s.

The farmers and the wetlands were displaced in 1970 when a 7.5 kilometre rock wall was built to form Lake Mokoan. The dam project allowed for local irrigation and created a drought reserve for the River Murray. This was broadly welcomed for the economic and recreational values it promised.

It worked for a while, but the resulting flooding killed around 150,000 iconic river red gums, including many Aboriginal scar trees.

River red gum trees died following inundation after the dam was built.
Max Finlayson, Author provided

The dam was dried out for downstream supplies in the 1982 drought. Then the 1990s brought massive blue-green algal blooms.

The frequent blooms made it hard to use the water. The Victorian government needed to find water savings for water projects elsewhere and in 2004 decided to remove the dam.

It was a controversial move, opposed by many in the community, including those who lived around the lake, or used the water for recreation or irrigation. But in 2009 a gap was cut through the wall and the water drained.

Local opposition to the decommissioning of the dam.
Max Finlayson, Author provided

Restoration of the wetlands

After the dam was decommissioned, it was clear the site had undergone significant ecological and social change. So the government was keen to establish a world-class wetland with close links to nearby communities.

In 2009 an independent, community-based committee of management was formed to renew the site.

The scale of the renewal is significant, covering 8,750 hectares. It’s the first site outside the US to be classed as a Wetland of Distinction by the Society of Wetland Scientists, a leading global voice for wetland science and management.

Importantly, local Indigenous people are actively involved in the project, which recognises Indigenous cultural heritage sites throughout the wetlands.

This runs alongside efforts to document and share the history of the European settlers. The committee recognises that people in the wetlands have more than once moved from occupation to dispossession.

Winton Wetlands aerial views – December 2011.

The ecological renewal is built around specific management actions to establish self-sustaining populations of native fish, waterbirds and other fauna, and aquatic plants. It’s also improving the water quality and reducing the populations of feral animals and weeds.

Native plants returned to the site include the river red gum and cane grass.

Native fish are breeding, as is the majestic white-bellied sea eagle. A rakali (Australia’s answer to otters) and sugar gliders have been sighted.

An advisory panel is guiding the science behind the project. It’s supported by research partnerships with universities and an annual science forum, designed as an information exchange between the committee and the wider community.

A cafe and visitors hub are now regularly used for events. People visit the wetlands for walks, bike rides, canoeing, stargazing and birdwatching.

There are 60km of roads, nine bush walks, 30km of cycling trails and artworks celebrating the landscape and its history.

The decommissioning of the dam was not well received by some in the community at first. The restoration project is working hard to repair the connection of people to the site through ecological renewal, art and recreational events.

New trees planted as part of the Winton Wetland revegetation during dry periods.
Lance Lloyd, Author provided

If you restore it, they will come

The success of the Winton Wetlands project in involving the community is reflected in increasing visitor numbers to the site. These have grown from 36,264 in 2016-17 to 65,287 in 2018-19.

In addition, the numbers of schoolchildren who visit the site for guided nature excursions has increased from 274 in 2016-17 to 2,013 in 2018-19.

Volunteers are also playing a role with some 4,114 hours of effort in 2018-19 operating the information desk, taking guided walks, organising planting days and other restoration activities. Volunteers support the science work in various ways including long-term monitoring of frog calls.

The management committee is determined to rebuild the ecological integrity of the wetlands. But there is a lot still to do, and there are differences of opinion over the priorities and the speed at which things are being done.

The initial funding of A$17 million from the Victorian government will soon be exhausted. Other financial avenues are being pursued. This is necessary to secure a future for this bright spot – a gem of inestimable value – in the Murray-Darling Basin.

The Winton Wetlands represent a bright spot for social-ecological restoration and renewal in the Murray-Darling Basin.
Lance Lloyd, Author provided

Max Finlayson, Adjunct Professor, Charles Sturt University and Lance Lloyd, Honorary Research Fellow, Federation University Australia

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Don’t count your fish before they hatch: experts react to plans to release 2 million fish into the Murray Darling

Lee Baumgartner, Charles Sturt University; Jamin Forbes, Charles Sturt University, and Katie Doyle, Charles Sturt University

The New South Wales government plans to release two million native fish into rivers of the Murray-Darling Basin, in the largest breeding program of its kind in the state. But as the river system recovers from a string of mass fish deaths, caution is needed.

Having suitable breeding fish does not always guarantee millions of healthy offspring for restocking. And even if millions of young fish are released into the wild, increased fish populations in the long term are not assured.

For stocking to be successful, fish must be released into good quality water, with suitable habitat and lots of food. But these conditions have been quite rare in Murray Darling rivers over the past three years.

We research the impact of human activity on fish and aquatic systems and have studied many Australian fish restocking programs. So let’s take a closer look at the NSW government’s plans.

A mass fish kill at Menindee in northern NSW in January 2019 depleted Fisk stocks.
AAP

Success stories

According to the Sydney Morning Herald, the NSW restocking program involves releasing juvenile Murray cod, golden perch and silver perch into the Darling River downstream of Brewarrina, in northwestern NSW.

Other areas including the Lachlan, Murrumbidgee, Macquarie and Murray Rivers will reportedly also be restocked. These species and regions were among the hardest hit by recent fish kills.

Fish restocking is used worldwide to boost species after events such as fish kills, help threatened species recover, and increase populations of recreational fishing species.

Since the 1970s in the Murray-Darling river system, millions of fish have been bred in government and private hatcheries in spring each year. Young fish, called fingerlings, are usually released in the following summer and autumn.

There have been success stories. For example, the endangered trout cod was restocked into the Ovens and Murrumbidgee Rivers between 1997 and 2006. Prior to the restocking program, the species was locally extinct. It’s now re-established in the Murrumbidgee River and no longer requires stocking to maintain the population.

In response to fish kills in 2010, the Edward-Wakool river system was restocked to help fish recover when natural spawning was expected to be low. And the threatened Murray hardyhead is now increasing in numbers thanks to a successful stocking program in the Lower Darling.

After recent fish kills in the Murray Darling, breeding fish known as “broodstock” were rescued from the river and taken to government and private hatcheries. Eventually, it was expected the rescued fish and their offspring would restock the rivers.

A Murray hardyhead after environment agencies transplanted a population of the endangered native fish.
North Central Catchment Management Authority

Words of caution

Fish hatchery managers rarely count their fish before they hatch. It’s quite a challenge to ensure adult fish develop viable eggs that are then fertilised at high rates.

Once hatched, larvae must be transported to ponds containing the right amount of plankton for food. The larvae must then avoid predatory birds, be kept free from disease, and grow at the right temperatures.

When it comes to releasing the fish into the wild, careful decisions must be made about how many fish to release, where and when. Factors such as water temperature, pH and dissolved oxygen levels must be carefully assessed.

Introducing hatchery-reared fish into the wild does not always deliver dramatic improvements in fish numbers. Poor water quality, lack of food and slow adaptation to the wild can reduce survival rates.

In some parts of the Murray-Darling, restocking is likely to have slowed the decline in native fish numbers, although it has not stopped it altogether.

Address the root cause

Fish stocking decisions are sometimes motivated by economic reasons, such as boosting species sought by anglers who pay licence fees and support tourist industries. But stocking programs must also consider the underlying reasons for declining fish populations.

Swan Hill, home to a larger-than-life replica of the Murray cod, is just one river community that relies on anglers for tourism.
Flickr

Aside from poor water quality, fish in the Murray Darling are threatened by being sucked into irrigation systems, cold water pollution from dams, dams and weirs blocking migration paths and invasive fish species. These factors must be addressed alongside restocking.

Fish should not be released into areas with unsuitable habitat or water quality. The Darling River fish kills were caused by low oxygen levels, associated with drought and water extraction. These conditions could rapidly return if we have another hot, dry summer.

Stocking rivers with young fish is only one step. They must then grow to adults and successfully breed. So the restocking program must consider the entire fish life cycle, and be coupled with good river management.

The Murray Darling Basin Authority’s Native Fish Recovery Strategy includes management actions such as improving fish passage, delivering environmental flows, improving habitat, controlling invasive species and fish harvest restrictions. Funding the strategy’s implementation is a key next step.

Looking ahead

After recent rains, parts of the Murray Darling river system are now flowing for the first time in years. But some locals say the flows are only a trickle and more rain is urgently needed.

Higher than average rainfall is predicted between July and September. This will be needed for restocked fish to thrive. If the rain does not arrive, and other measures are not taken to improve the system’s health, then the restocking plans may be futile.

Lee Baumgartner, Professor of Fisheries and River Management, Institute for Land, Water, and Society, Charles Sturt University; Jamin Forbes, Freshwater Ecologist, Charles Sturt University, and Katie Doyle, Freshwater Ecologist, Charles Sturt University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

No water, no leadership: new Murray Darling Basin report reveals states’ climate gamble

Daniel Connell, Crawford School of Public Policy, Australian National University

A report released today investigating how states share water in the Murray Darling Basin describes a fascinating contrast between state cultures – in particular, risk-averse South Australia and buccaneering New South Wales.

Perhaps surprising is the report’s sparse discussion of the Murray Darling Basin Plan, which has been the focus of irrigators’ anger and denunciation by National Party leaders: Deputy Prime Minister Michael McCormack and NSW Deputy Premier John Barilaro.

In general terms, the Murray Darling Basin Plan was originally intended to make water management in the Murray Darling Basin more environmentally sustainable. Its critics see it as a restraint on development, and complain it has taken water away from irrigators during a time of extreme drought.

In response to McCormack and Barliaro’s criticisms of the plan in late 2019, federal water minister (and senior National Party figure) David Littleproud commissioned Mick Keelty as Interim Inspector General of MDB Water Resources.

For the new report, Keelty investigated the changing distribution of “inflows” – water flowing into the River Murray in the southern states.

Climate change has brought the inflow to just a trickle. This dramatic reduction over the past 20 years is what Keelty has described as “the most telling finding”.

He also investigated the reserve policies under which the three states choose – or don’t choose – to hold back water in Hume and Dartmouth Dams to manage future droughts.

Keelty says there’s little transparency or clarity about how much water states are allocated under the Murray Darling Basin Agreement (the arrangement for sharing water between the states which underpins the Basin Plan). This failure in communication and leadership across such a vital system must change.

Sharing water across three states

One major finding of Keelty’s inquiry is that the federal government has little power to change the MDB Agreement between the three states, which was first approved in 1914-15. Any amendment requires the approval of all three governments.

To increase the volume of water provided to NSW irrigators, South Australia and Victoria would need to agree to reduce the volumes supplied to their own entitlement holders. That will not happen.

Why has the agreement lasted so long?

Over the past century it has proved robust under a wide range of conditions. Its central principle is to share water with a proportion-of-available-flow formula, giving each state a percentage of whatever is available, no matter whether it’s a lot, or not much.

After receiving its share of the River Murray flows, each state is then free to manage its allocation as it wishes.

Historically, South Australia and Victoria have chosen to reserve or hold back a larger proportion of their shares each year in Hume and Dartmouth dams to use in future droughts, compared with New South Wales.

In part this difference derives from the long-term water needs of orchards and vines in South Australia and Victoria, in contrast to annual crops such as rice and cotton in New South Wales.

As a result, South Australia and Victoria have a higher proportion of high security entitlements. That means they receive 100% most years. Only in extreme drought years is their allocation reduced.

NSW, on the other hand, has a higher proportion of low security general entitlements. In dry and normal years they receive a proportion of their entitlements. Only in wet years do they get the full 100%. (These differences in reliability are reflected in the cost of entitlements on the water market.)

Reliability of water supply

What’s more, each state makes its own decision about how its state allocation is shared between its entitlement holders (95% of water goes to irrigators the rest supplies towns and industry).

South Australia chooses to distribute a much smaller proportion to its entitlement holders than New South Wales. It also restricted the number of licences in the 1970s. That combination ensures a very high level of reliability in supply. Victoria took a similar approach.

But New South Wales did not restrict licences until the 1990s. It also recognised unused entitlements, so further reducing the frequency of years in which any individual would receive their full allocation of water.

When climate change is taken into account these differences between the three states result in their irrigators having significantly different risk profiles.

The climate change threat to the basin is very real

Despite climate denial in the National Party, the threat is very real in the MDB. The report describes a massive reduction in inflows over the past 20 years, approximately half compared with the previous century. One drought could be an aberration, but two begins to look like a pattern.

The report also suggests that in many cases irrigator expectations of what should be normal were formed during the wet period Australia experienced between the second world war and the 1990s.

Added to this have been business decisions by many irrigators to sell their entitlements and rely on the water market, a business model based on what now seems like unrealistic inflow expectations.

In effect, successive New South Wales governments – a significant part of the state’s irrigation sector in the southern part of the state and the National Party – gambled against the climate and are now paying a high price.

In desperation, they’re focusing on alternative sources. This includes the water in Hume and Dartmouth held under the reserves policy of the two other states; environmental entitlements managed by the Commonwealth Environmental Water Holder; the very large volume of water lost to evaporation in the lower lakes in South Australia; and the possibility of savings resulting from changes to management of the system by the Murray-Darling Basin Authority.

Failure in leadership and communication

For reasons already outlined, the state reserves policy is not likely to change and use of the Commonwealth Environmental Water Holder environmental water entitlements would not be permitted under current legislation.

Management of the lower lakes is being reviewed through another investigation so is not discussed in the report. The report also states that management of the MDB Authority is subject to regular detailed assessment by state governments, and they have assessed its performance as satisfactory.

However the report was critical of the performance of all MDB governments with regard to leadership and communications suggesting that failures in those areas were largely responsible for the public concern which triggered its investigation.

Daniel Connell, Research Fellow, Crawford School of Public Policy, Australian National University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Last summer’s fish carnage sparked public outrage. Here’s what has happened since

Lee Baumgartner, Charles Sturt University and Max Finlayson, Charles Sturt University

As this summer draws to a close, it marks just over a year since successive fish death events at Menindee in Lower Darling River made global headlines.

Two independent investigations found high levels of blue-green algae and low oxygen levels in the water caused the deaths. Basically, the fish suffocated.

The conditions were caused by a combination of water extraction and extremely dry conditions which effectively stopped the river from flowing. Both investigations concluded that until more water flowed in the Darling, in western New South Wales, further fish kills were very likely.

So what’s happened since, and does the recent rain mean the crisis won’t be repeated?

Federal and state government action

In April last year the federal government committed A$70 million to improve the river’s health and prevent more fish deaths. Let’s examine what’s been done so far:

– Native fish management and recovery strategy: Parts of a draft native fish management and recovery strategy have been released for public consultation. The plan has included governments, academics, the community and indigenous groups.

– Native fish hatchery: Government hatchery facilities at Narrandera in NSW will be upgraded to hold and breed more fish. But reintroducing fish into affected areas is challenging and could be a decades-long program.

– Research: The government committed to new research into hydrology and climate change. A panel has been formed and the oversight committee is scoping the most effective research outcomes to better manage water under a changed climate.

– Fish passage infrastructure: Fish ladders – structures that allow fish to travel around obstacles on a river – are needed at sites on the lower and upper Darling. Fish ladder concept designs have progressed and are also part of the NSW government’s Western Weirs project.

-In-stream cameras: Live-stream feeds of the Darling River are not yet available.

-Meter upgrades and water buybacks: Discussions have begun as part of a commitment to buy back A-class water licenses from farmers and return water to the rivers. Rollout of improved metering is due over the next five years.

Progress on these actions is welcome. But the investigation panels also recommended other actions to help fish populations recover over the long term, including ensuring fish habitat and good water quality.

Further fish deaths

In 2003, basin native fish communities were estimated to be at 10% of pre-European levels and the spates of fish deaths will have reduced this further.

Over spring and summer in 2019, conditions in the Darling River deteriorated. A series of smaller, but significant, fish deaths prompted government agencies and communities to conduct emergency “fish translocations”.. Aerators were deployed in a bid to improve the de-oxygenation. Fish were moved to more suitable water bodies, or to hatcheries to create insurance populations.

By spring, once-mighty rivers such as the Darling and Macquarie had dried to shallow pools. As summer progressed, more than 30 fish die-offs occurred in the Macquarie, Namoi, Severn, Mehi and Cudgegong rivers and Tenterfield Creek.

What about the rain?

Strong recent rainfall means upper parts of the Darling catchment are now flowing for the first time in more than two years. Flows are passing over the Brewarrina Weir and associated fishway.

A flowing Darling is great, but it raises questions over future water management. Farmers have been waiting for years for the Darling to flow and will be eager to extract water for agricultural productivity. Likewise, the environment has been awaiting a “flush” to reset the system and restore ecological productivity.

After the rains, the NSW government allowed irrigators to harvest floodwaters to reduce the threat of damage to private infrastructure. Now that threat has subsided, governments are working together to “actively manage” the event – meaning water rules will be decided as the flow progresses, in consultation with water users and environmental managers.

But there is still significant debate on how best to manage water over the longer term.

Water use on the Darling River remains highly contested.
Dean Lewins/AAP

Is a flowing Darling a return to normal?

The current flows in the Darling are far from a return to normal conditions. NSW is still in drought, and the river flows are yet to reach the Lower Darling. Many children in the Menindee township have not seen a flowing Darling in their lifetime.

Indigenous elders and recreational fishers – those who remember when the river flowed freely and was full of fish – are lamenting the recent declines. In parts of the system, dry riverbeds and isolated pools are still begging to be connected so fish can move about, spawn, and naturally recover.

River flows could take up to six weeks to reach the lower Darling, and follow-up rain is urgently needed to avoid another summer of fish carnage. Future water sharing strategies must protect both upstream and downstream communities. Some people are lobbying for the Menindee lakes to be listed as internationally important under the Ramsar Convention on Wetlands to ensure biodiversity and water management work together.

Undoing over 200 years of fish declines will require a sustained effort, with a significant investment in recovery actions over a long period. We must recognise Australia is a country of long droughts and flooding rains, and develop a proactive native fish strategy that reduces the probability of a similar disaster in future.

But unfortunately, as history has shown that when we transition from drought to flood, our memories can be short.

Lee Baumgartner, Professor of Fisheries and River Management, Institute for Land, Water, and Society, Charles Sturt University and Max Finlayson, Adjunct Professor, Charles Sturt University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Don’t blame the Murray-Darling Basin Plan. It’s climate and economic change driving farmers out

Sarah Ann Wheeler, University of Adelaide

For the thousand or so farmers in Canberra in the past week venting their anger at the federal government, it’s the Murray-Darling Basin Plan to blame for destroying their livelihoods and forcing them off the land.

We can’t comment directly on their claims about the basin plan. But our research, looking at the years 1991 to 2011, suggests little association between the amount of water extracted from the Murray-Darling river system for irrigation and total farmer numbers.

That’s not to say there aren’t fewer farms in the basin now than a decade ago – there are – but our analysis points to the more important drivers being the longer-term influences of changing climate, economics and demographics.

Indeed our study predicts another 0.5℃ increase in temperature by 2041 will halve the current number of farmers in the basin.

Hostility to water recovery

The waters of the northern basin run to the Darling River and the waters of the southern basin run to the Murray River.
MDBA

Over many decades state governments in Queensland, New South Wales, Victoria and South Australia licensed to farmers more entitlements to water than the river system could sustain. The basis of the Murray-Darling Basin Plan, enacted in 2012, was to rectify this through buying back about a quarter of all water licences to ensure an environmental flow.

A water entitlement, despite its name, does not guarantee a licence holder a certain amount of water. That depends on the water available, and that is determined by the states, which make allocations to each type of licence based on its type of security and current conditions.

With drought, farmers have seen their allocations severely cut back, sometimes to nothing. And partly because they see there’s still water in the River Murray, some are very angry.

Hostility to water recovery in fact predates the plan’s enactment, to when the federal government began buying back water entitlements in 2008. The Commonwealth now holds about 20% of water entitlements across the basin. More than two-thirds of these licences were recovered between 2008 and 2012.

Lack of correlation

Our research thus covers the period of most significant water buybacks. It also covers the period of the Millennium Drought, from 2001 to 2009, when the amount of water extracted from the river system dropped by about 70%.

Yet we see little evidence reduced water extractions led to more farmers exiting the industry.

As a very broad overview of the situation, the following graph illustrates the lack of correlation between measured water extraction in the Murray-Darling Basin and decreasing farmer numbers.

Water extractions have varied significantly between years, with a big decline over the decade of the 2000s even while farmers’ need for irrigated water increased due to lack of rain. La Niña brought record rains in 2010-11. The current drought across the basin took grip from about 2017.

Yet farmer numbers have declined at a relative steady rate. Within the basin in the time-period we modelled, they fell from about 90,000 in 1991 to 70,000 in 2011. This can be seen as part of a wider trend, with total farmer numbers in the four basin states falling from more than 230,000 in 1976 to barely 100,000 in 2016.

It might be argued that because irrigated farms make up only a quarter of all farms, the overall numbers might mask a greater correlation between water extractions and decline in irrigated farms. While the specific impacts on irrigation farming in recent years warrant further study, there’s no signal in our data pointing to extractions making a discernible contribution to farmer numbers throughout the basin.

Modelling farmer movement

Our findings are based on a specialised data set of population and agricultural census information from statistical local areas from 1991 to 2011. We used climate risk measures from 1961 onwards.

The following infographic shows the exit pattern of farmers by local area between 1991 and 2011.

We included as many climate, economic, farming, water and socio-demographic characteristics as possible to capture historical farmer movements and create a model able to predict movements based on variables such as average temperature.

Need for a multifaceted response

Overall our modelling results suggests the most significant and largest influences on farmer exit are rising temperatures and increased drought risk, followed by the economic factors that have have been reducing the proportion of the population engaged in farming for more than a century.

Declining commodity prices, higher unemployment and urbanisation are strongly associated with farmer exit. Urbanisation, for example, has made it attractive for farmers on city fringes to sell their land to property developers and exit the industry.

Research suggests irrigators in psychological distress are more likely to want the basin plan suspended. Our research suggests their distress is probably not primarily driven by the federal government buying water entitlements from licence holders who sold them willingly. Water recovery and the basin plan is simply an easier focal point of blame than the longer-term trends making the farming lifestyle less viable.

Nothing will be gained by focusing on short-term “fixes” at the cost of longer-term environmental harm. The problems facing all farmers cannot be addressed in isolation from longer-term global climate and economic trends.

As a society we have to decide what we value: do we want to see such a mass exodus of farmers from the land in the face of a drying climate? If not, future policy for the Basin must consider the real long-term drivers of farm exit and take a multi-faceted approach to climate change, water, land, drought and rural development.

Sarah Ann Wheeler, Professor in Water Economics, University of Adelaide

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Water markets generate big benefits

There’s room for improvement

Some of the good ideas are our own

Don’t throw the market out with the river water

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There’s still a lot to learn about rain

Where does Australia’s rainfall come from?

Up to 18% of rain in the basin starts from the land

Summer rain not so good for farmers

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A brief history of water buybacks

Infrastructure subsidies: a flawed approach

Missing water

We deserve better

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Two types of water recovery programs

Water recovery has increased prices

Farm upgrades increase prices more than buybacks

No easy answers

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A special fish

A desperate rescue attempt

An ark across Australia

What next for the Macquarie perch?

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From dispossession to decommissioning

Restoration of the wetlands

If you restore it, they will come

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Success stories

Words of caution

Address the root cause

Looking ahead

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Sharing water across three states

Reliability of water supply

The climate change threat to the basin is very real

Failure in leadership and communication

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Federal and state government action

Further fish deaths

What about the rain?

Is a flowing Darling a return to normal?

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Hostility to water recovery

Lack of correlation

Modelling farmer movement

Need for a multifaceted response

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