OPTIMISING SUSTAINABLE USE OF GROUNDWATER: A Challenge for Science and Water Markets John Brumley & Tamara Boyd School of Civil and Chemical Engineering RMIT University

Introduction Sustainable groundwater management rare prior to 1980s Aquifer over-development eventually seen as a threat Poor understanding of aquifers cannot stop us from action Trading can enhance management of groundwater Surface water trading has dominated reforms to date This must change

Drivers of Australian Water Reform Growing water deficit Enhanced allocation of current resources needed Deregulation of the water industry Focus shifted from resource development to management Brundtland Report, Agenda 21, National Strategy for ESD CoAG’s 1994 Water Reform Framework

CoAG Water Reform National policy for reform of rural and urban water industries Explicitly linking fiscal and environmental objectives Jurisdictional differences in implementation Water pricing based on full cost recovery Comprehensive water allocations, separated from land Allocations for the environment and water trading

Ensuing Groundwater Program ARMCANZ groundwater policy discussion paper Objective: sustainable use of the resource Better integration of surface and groundwater Development of groundwater management plans Groundwater arrangements not subject to assessment payments Yet consistent, coordinated action must prevail

Sustainable Yield Total allocations should not exceed sustainable yield: the groundwater extraction regime, measured over a specified planning time frame, that allows acceptable levels of impact and protects the higher value uses that have a dependency on the water Conceptually difficult to implement Methodology varies greatly between and within countries Aquifer characteristics or ‘default’ % of recharge

Issues Limiting extraction to recharge doesn’t control externalitites Interference & environmental degradation Groundwater mining may be policy Las Vegas Valley, SA/Vic Border, Latrobe Valley Intentional overallocation acceptable only when: Publicly accepted strategic benefit Resource is efficiently used and tightly managed Resource may be overallocated but underused

Consequences of Excessive Withdrawal Reversible Interference: Pumping lifts/costs increase Well yields decrease Springflow/baseflow reduction Effect on phreatophytic vegetation Irreversible Deterioration: Saline water intrusion/upconing Ingress of polluted waters Aquifer compaction/yield reduction Land subsidence (Foster, 1999)

Australia’s Groundwater Markets Impediments include: Deficiency in reliable data Less portable nature of groundwater Potential impacts from groundwater transfers Few embargoed areas, consequently ‘thin’ markets Activation of dormant licences Use of zoning to control transfers

Conclusion Trade can optimise economic benefits of groundwater use Hydrogeological and environmental checks must be met Groundwater must keep pace with surface water reform Considerable work to be done, including: Community/user education Data attainment & interpretation Understanding environmental allocations