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Easing the Flow: Thinking about the River Murray like an Urologist. 2007 Harry Harris Oration Urological Society of Australia and New Zealand. Prof. Mike Young Research Chair, Water Economics & Management The University of Adelaide. Adelaide Convention Centre, 21 st February 2007.

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2007 harry harris oration urological society of australia and new zealand

Easing the Flow:Thinking about the River Murray like an Urologist

2007 Harry Harris OrationUrological Society of Australia and New Zealand

Prof. Mike Young

Research Chair, Water Economics & ManagementThe University of Adelaide. Adelaide Convention Centre, 21st February 2007

tonight you will eat a lot of water
Tonight you will eat a lot of water!
  • 1 cup of lettuce 11 litres
  • 1 slice of white bread 28 litres
  • 1 bottle of wine 360 litres
  • 1 potato 500 litres
  • 8 oz steak 4,660 litres
  • Standard meal: mignon veal, red onion, basil, potatoes with 2 glasses of wine:
  • Approx. 5000 litres!
  • Plus Rasberry Tart & Walnut Brittle Icecream
water withdrawals per capita
Water withdrawals per capita



New Zealand

United Kingdom

(Australia = 135/161 countries)

pricing recycled water
  • Great variability – there is no transparency RECYCLED WATER PRICES
  • Northern Adelaide Plains - Virginia 7-15c/kL*
  • Sydney – Rouse Hill 28c/KL ( incr. use)
  • Ipswich Water – Springfield 43c/kL
  • Christies Beach – Southern Vales 53c/kL*
  • SOPA / Newington 83c/kL
  • DRINKING WATER - Sydney Water (bulk) 98c/kL
  • Ride citrus sports water (500mL) $6600/kL
  • * Supplied to reticulator by STP operator without charge
the real cost of recycling
The Real Cost of Recycling
  • Ipswich Water Springfield (consultant) $1.45/KL
  • SOPA Olympic Park (operating cost only)(SOPA) $1.60/KL
  • Cost, integrated hydrological system (consultant) $2.50/KL
  • Melbourne Eastern STP (consultant) >$3.00/KL
  • Rouse Hill (Sydney Water) $4 to $7/KL
options if it stacks up do it
Options - If it stacks up do it

Full cost pricing for infrastructure, including externalities. We can’t afford the costs of a grant-based system.

australia has a problem
Australia has a problem
  • Drought and …
  • Evidence suggests a step change in weather patterns and …
  • Science is warning of further adverse change and …
  • The last 50 years have been wet and…
  • This is when we built our cities and built our thirst for water
  • Impose pre 1950s rainfalls on Australia and we have a very serious problem!
  • We may have to get by with a lot less water
  • Sydney, Brisbane, Melbourne, Adelaide, Perth, Toowoomba, Gosford, Goulburn, Bendigo, Ballarat
climate shifts occur
Climate shifts occur



A drought, Australia should have expected (not a 1 in 1,000 years event)

river murray inflows 2007 8 worst scenario
River Murray Inflows 2007/8 Worst Scenario
  • By May 2007, all Murray System dams empty
  • 2007/8 inflows => 1,000 GL &
  • South Australia get its 1/3 => 333 GL
  • But SA system evap. + losses => 1,300 GL
  • Balance – 967 GL
  • Add back Wellington Weir + Lake Bonney & triage L. Alexandrina and L. Albert + 1,100 GL
  • Available allocation to cities, vines, etc +133 GL
water accounting 101




Water Yield

Land use


Ground water

Base flow

Water Extraction

Irrigation, urban & industrial use $

Surface Drainage

GW Recharge


Water accounting 101






Unmanaged flow reducing effect

Nett effect

Water use efficiency savings

- 723 GL

Reduced water yield (Trees and dams)

- 600 GL

Salinity Interception Schemes

Add back 500 GL ?????

-20 GL

Increased groundwater use

-349 GL

Estimated nett reduction in mean river flow and allocations to irrigators

-1,692 GL

Possible reduction in mean annual River Murray flow as a result of incomplete accounting (baseline 1993/94)
recharge credits for return flows


45 ML

Actual amount used

5 ML


50 ML

Water that returns to the aquifer

Recharge Credits for return flows

100 ML


Gross entitlement = 100 MLReturn = 50 ML

Unconfined Aquifer

  • Robust (adj.)     Said of a system that has demonstrated an ability to recover gracefully from the whole range of exceptional inputs and situations in a given environment.
      • One step below bulletproof.
      • Carries the additional connotation of elegance in addition to just careful attention to detail.
      • Compare smart, oppose brittle.
  • Robust systems
      • Endure without the need to change their foundations.
      • They last for centuries.
      • Inspire confidence.
      • Produce efficient and politically acceptable outcomes in an ever changing world.
casting the net critical concepts
Casting the Net Critical Concepts
  • 1862 – Companies Act Limited Liability
  • 1857 – The Torrens Title System
  • ?000 - The Banking System
  • Jan Tinbergen – 1st Nobel Lauriat in Economics

Whereas the inhabitantsof South Australia are subjected to loses, heavy costs, and much perplexity, by reason that the laws relating to the transfer and encumbrance of freehold and other interests in land are complex, cumbrous and unsuited to the requirements of the said inhabitants, it is therefore expedient to amend the said Act

allocation trading


Date ____________

Pay ____________________________________________


The sum of ________________________________ ML of 2000/01 Water

Water Trading Australia


807512 085 249:0223 7851

Allocation Trading



a robust system

Single Title to Land & Water



Tradeable Rights


Entitlement Sharesin perpetuity

Use licences with limits & obligations

Bank-like Allocations

Channel Capacity Shares

Channel Capacity Allocations



A Robust System

Solution for C21?

annual diversions
Annual diversions

No plan to cope with climate shifts

over allocation1
Over allocation
  • Exists because
    • Entitlements are defined in volumes and not as shares of available water in a pool
    • Plans assume that constant technology and land use change
    • Introduction of trading that activated previously unused water
  • Solutions
    • Buy back
    • Pro-rata reduction
illustrative buy back offer form
Type of Licence South Australian River Murray Licence

Offer conditional upon lease back of water until …..

Offer 1 …………….. ML @ not less than $2,300.00 per ML

Offer 2 …………….. ML @ not less than $2,100.00 per ML

Offer 3 …………….. ML @ not less than $2,000.00 per ML

Offer 4 …………….. ML @ not less than $1,950.00 per ML

Offer 5 …………….. ML @ not less than $1,900.00 per ML


Licence holder …………………………………………

Registered interest (if any) …………………………..

Illustrative buy back offer form
six governments in action
Six Governments in action



Snowy Hydro


a way forward
A way forward
  • Concepts on the table
    • Commonwealth takeover via referral of powers
    • Run the system as one ground and surface water
    • Independent management with strong accountability to community and parliaments
    • Skill-based members
    • Minister can direct but only in writing and the gazette
  • A solution?
    • Independent Authority under Commonwealth
    • Environment Trust to hold water
    • Infrastructure manager to keep the system running
mdb authority functions and powers
MDB Authority functions and powers
  • s. 9 The Authority, in the performance of its functions, must
    • Ensure over-allocation does not recur
    • Efficient and cost effective management
    • Maximise economic efficiency in use of MDB water
    • Ensure accountability
    • Achieve cost-recovery targets
  • s.10 The Commission must do all things that are necessary or convenient to be done for, or in connection with, the performance of its functions.
thinking like a urologist
Thinking like a Urologist
  • A simple way forward
    • A system that adjusts allocations in harmony with the available supply
    • A 200GL minimum flow through Mouth
    • A little for the Coorong every year
    • SA’s high security entitlements combined with NSW and Victoria’s and Adelaide’s urban water tradeable
    • Carry over for all water in all States
    • Binding power referral only when over-allocation solved
    • A governance arrangement that guarantees that over-allocation does not recur!

The future depends upon us


Prof Mike Young

Water Economics and Management

Email: Mike.Young@adelaide.edu.au

Phone: +61-8-8303.5279Mobile: +61-408-488.538 www.myoung.net.au