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Detailed Case Study of the Costs and Benefits of Abstraction Reform in A www.defra.gov.uk Detailed case study of the costs and benefits of abstraction reform in a catchment in Australia with relevant conditions to England and Wales R&D Technical Report WT1504/TR Produced: April 2013 Defra Water Availability and Quality R&D Programme Detailed case study of the costs and benefits of abstraction reform in a catchment in Australia with relevant conditions to England and Wales R&D Technical Report WT1504/TR Produced: April 2013 Author(s): Prof. Mike Young and Christine Esau The University of Adelaide Statement of use This report has been produced by the Defra Water Availability and Quality Research Programme. Its overall objective is to examine the experience of the abstraction reform in the Gwydir catchment in Australia and assess the nature and extent of water rights trading that has been established in this catchment. Dissemination status Internal: Released Internally External: Released to Public Domain Keywords: Water supplies, abstraction, regulation Research contractor: University College London The University of Adelaide Defra project officer: Henry Leveson-Gower Publishing organisation Department for Environment, Food and Rural Affairs Water Availability Division, Ergon House, Horseferry Road London SW1P 2AL Tel: 020 7238 3000 Fax: 020 7238 5524 www.defra.gov.uk/environ/quality/water © Crown copyright (Defra); 2013 Copyright in the typographical arrangement and design rests with the Crown. This publication (excluding the logo) may be reproduced free of charge in any format or medium provided that it is reproduced accurately and not used in a misleading context. The material must be acknowledged as Crown copyright with the title and source of the publication specified. The views expressed in this document are not necessarily those of Defra. Its officers, servants or agents accept no liability whatsoever for any loss or damage arising from the interpretation or use of the information, or reliance on views contained herein. Australian Case Study Project The Gwydir River Catchment Prepared by Prof. Mike Young and Christine Esau Faculty of Professions The University of Adelaide Adelaide South Australia Australia 5005 Copyright © 2013 Faculty of Professions, The University of Adelaide. This work may be reproduced subject to the inclusion of an acknowledgement of its source. Responsibility for content remains with the authors. 2 Executive Summary This report is written to assist with the development of a new framework for the management of water in England and Wales. The approach taken is to describe experience with the development of water sharing arrangements in the Gwydir River Catchment in New South Wales and supplement this with a brief description of six lessons from other parts of Australia. The scale and mix of the water sources used in this catchment is similar to those found in England and Wales. Many of the Gwydir River Catchment’s rivers are unregulated and abstraction licences are defined by reference to the flow rate. Groundwater use is widespread. At the top of this catchment, the Copeton Dam is used primarily to provide a highly reliable source of water for urban and high value agricultural purposes. Conversion from 5 year renewable licences to the sharing regime now used in the Gwydir River Catchment began with the passage of a Water Management Act in 2000. Implementation started with the regulated river, then moved to groundwater and finally to the catchment’s unregulated and smaller alluvial sources. Key features of the Water Management Act include requirements to Prepare a ten year water sharing plan for each water source Identify how much water can be abstracted from each water resource without compromising environmental objectives Issue entitlements to a perpetual share of the water that may be abstracted Establish procedures that make it possible to trade water on a temporary and permanent basis Water sharing plans are statutory instruments and designed to provide security to water users and the environment. The search for an appropriate way to ensure that the environment is adequately protected is a key part of the process and, in the first round of reforms, was difficult to achieve. During the conversion process, a priority allocation process that gives preference to urban, domestic and stock water users was adopted that was consistent with prior practice. Two classes of unit shares were then created – high security shares and general security shares. Under the new regime, it is possible for licences to be acquired and held in the interest of the environment. This is now happening and being used with increasing sophistication as a complement to the role of environmental water allocation rules in water sharing plans. In the process of converting to the new sharing regime, more efficient water accounting arrangements have been put in place. Shares have become valuable. Care has been taken to build share registers that have investment integrity and allow financial interests in a person’s share holding to be registered. Today, the Gwydir River Catchment water users are prosperous and water use is being kept within sustainable limits. Water trading is widespread in the region’s regulated river system and groundwater systems and is encouraging the efficient use of water. The result has been a considerable increase in investment and changes in the way that water is used throughout the region. Trading of unregulated water entitlements is in its infancy. Allocation trading in the region’s unregulated systems is awaiting a decision on the most appropriate form of meters to install in these systems. Implementation of reforms on the scale undertaken in New South Wales was challenging. Development of the skill base and capacity to manage this reform process was difficult. In retrospect, it appears that it may have been better to invest more in the upfront development of policy guidelines. Communities expect this detail to have been thought through before they are asked to engage in the development of a water sharing plan. The Gwydir experience in attempting to resolve over-allocation issues is significant. Sharing regimes and the water trading arrangements they facilitate are most easily implemented when either a water source is not over-allocated and/or over-allocation problems are resolved as a sharing regime is implemented. Experience with the resolution of over-allocation problems in the Gwydir’s groundwater systems is described. 3 One of the more surprising aspects of the reforms adopted in New South Wales and implemented in the Gwydir River Catchment is that the costs of implementing them are not excessive and can be recovered from users. The development of standardised approaches plays a critical role in keeping administrative costs low. 4 Acknowledgements We acknowledge the well considered input we received from so many people in writing this report and particularly wish to thank the following officials for their generosity in speaking with us over an extended period of time and for allowing us to quote excerpts of their conversations with us in preparing the content of this report: Rob Albert, Acting Licensing Manager, Namoi, Gwydir and Border Rivers, NSW Office of Water Daryl Albertson, Senior Wetlands & River Conservation Officer, department of Environment, Climate Change and Water NSW Peter Cuell, Licensing Officer, NSW Office of Water Kenneth Gee, Senior Planning Operator, State Water Zara Lowien, Executive Officer, Gwydir River Irrigators Association Simon Morse, Supervising Hydrometrics Officer, NSW Office of Water Tara Schalk, Senior Natural Resource Officer, Water Management and Implementation, NSW Office of Water. Tom Rooney the Chief Executive of one of Australia’s leading water broking firms – Waterfind – assisted with the preparation and presentation of information on the water market in the Gwydir Valley. We are also grateful for the considerable wealth of published information already available about the Australian experience due to the diligence of concerned environmentalists, government agencies including the NSW Office of Water and NSW State Water, groups of individuals and lobbyists. Finally and without naming them, we would like to acknowledge the important insights that we gained from the chance to meet with several irrigators in the Gwydir Valley. The information they provided to us will make it much easier for those in the UK to understand the Australian water reform experience from all viewpoints. Much of the data in Chapters 2 and 3 of this report was obtained from published data available on public websites and for brevity is used without continuous citation. In order to make it easier for water managers in England and Wales to understand this text, however, the language has been changed to more closely align with terminology used in England and Wales. For instance, in England and Wales, a licence holder ‘abstracts’ water. In Australia, a licence holder ’takes‘ water. Therefore, for ease of reading, we have used the word ‘abstract’ rather than ‘take’. Gwydir River, near Moree 5 Contents Executive Summary ............................................................................................................................................................... 3 Acknowledgements ............................................................................................................................................................... 5 Appendices ...........................................................................................................................................................................
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