1. The Environment Institute Where ideas grow Securing our Water Supplies Mike Young Executive Director, The Environment Institute

2. The Environment Institute Life Impact The University of Adelaide Millennium Development Goals 3,900 children under 5 die every day from water supply & sanitation related diseases MDG to halve the number people without access to drinking water and sanitation by 2015 – Drinking water goal expected to be met – Sanitation goal will not be met

3. The Environment Institute Life Impact The University of Adelaide Current global water scarcity After Molden 2007

4. The Environment Institute Life Impact The University of Adelaide Water stressed people! By 2030 half the world will live in a water stressed region After OECD 2009 Water stress = Opportunity for Australia

5. The Environment Institute Life Impact The University of Adelaide Water scarcity gap – billions m 3 After 2030 Water Resources Group How big is the opportunity?

6. The Environment Institute Life Impact The University of Adelaide Clever green economies Reflect the full costs of resource use Water Storage Water Use Water Returned to Rivers, Aquifers, the Sea, etc. Commitment to prevent renewable resource depletion Promote the restoration of degraded environments. Recognise value ecosystem services In green economies, pricing matters

7. The Environment Institute Life Impact The University of Adelaide General messages 1.By 2030, over half the world’s population is expected to be living in a water stressed region. 2.Failure to provide reliable access to water and sanitation services is one of humankind’s greatest failings. 3.Demand is growing and supply costs rising. 4.Health and quality of many rivers and aquifers is declining. Restoration is a non-trivial challenge! 5.The aggregate affect of climate change on water supplies is expected to be negative. – By 2030 child malnutrition is predicted to increase by 20%. 6.The rate of change and structural adjustment necessary to resolve existing challenges and cope with the new ones expected as a result of climate change and a larger more affluent global population is an order of magnitude faster than has been achieved in recent times.

8. The Environment Institute Life Impact The University of Adelaide Pricing arrangements 1.Lack of economic discipline is crowding out the innovation and investment needed to solve water scarcity and investment challenges. 2.This raises the cost of solving water supply problems and decreases the rate of economic development. 3.In many cases, the poorest would be better off paying the full cost of supply rather than exposing themselves to the extremely high cost of obtaining access to water from other sources. 4.The more targeted cross-subsidies are the better. Blanket subsidies should be avoided.

9. The Environment Institute Life Impact The University of Adelaide Australian investment mistakes Grants to States to pay for desalination plants Grants to “upgrade” irrigation systems Restrictions on water trade Restrictions on carry forward Postage stamp pricing

10. The Environment Institute Life Impact The University of Adelaide Water Tradable Right Price Land Single Title to Land with a Water Licence Entitlement Shares in Perpetuity Bank-like Allocations Use licences with limits & obligations Delivery Capacity Shares Delivery Capacity Allocations Salinity Shares Salinity Allocations National Competition Policy 1993/94 Plus Cap National Water Initiative 2004 Australian water management innovations

11. The Environment Institute Life Impact The University of Adelaide Returns to investment in entitlement systems & trading After Bjornlund & Rossini 2007

12. The Environment Institute Life Impact The University of Adelaide Water accounting 101 River Murray Dredge in Oct 2002 A few accounting flaws in our entitlements – Forests – Dams – Groundwater – Return flow – Salinity interception

13. The Environment Institute Life Impact The University of Adelaide Users Environment River Flow Environment River Flow Users River Flow Environment Users Impact of adverse climate change

14. The Environment Institute Life Impact The University of Adelaide Volume of Water in the System Indicative template – regulated river systems

15. The Environment Institute Life Impact The University of Adelaide 15 Water needed to ensure conveyance EntitlementsEnvironment Flood water Shared Water Entitlements Volume of water available Environment with a fully-specified share

16. The Environment Institute Life Impact The University of Adelaide Clever governance 1.Need for a much more disciplined approach to the management and administration of water resources. – Independent expertise-based Authorities 2.Need processes and mechanisms that promote change and structural adjustment. 3.Must be able to cope with sudden climatic shifts and the rapid emergence of extreme water scarcity. 4.Independent price regulators.

17. The Environment Institute Life Impact The University of Adelaide Clever finance 1.There has been insufficient attention to the economic scrutiny of proposals to invest in new infrastructure and renew existing infrastructure. 2.Proposals need to take much greater account of likely population shifts and vulnerability to climate variability and change. 3.Costs will be less if parallel investments are made in the development of mechanisms to enable widespread use of market-based instruments. 4.Greater use of the private sector is possible.

18. The Environment Institute Life Impact The University of Adelaide Financing investment (3 T’s) After Marin and OECD 2009

19. The Environment Institute Life Impact The University of Adelaide text Summary At the global level Australia is leading in water policy But we are way behind where we should be in this ever changing world Huge business opportunity if we get it right

20. The Environment Institute Where ideas grow www.adelaide.edu.au/environment www.myoung.net.au