Water management options for urban and rural Australia

Australia's water challenges

6 October 2009

Dr Don Blackmore
AM FTSE Chairman, eWater CRC Chairman,
Advisory Council for CSIRO’s ‘Water for a Healthy Country’ Flagship

Don Blackmore has 40 years experience in water and natural resources management both in Australia and in many countries around the world.

He was the Chief Executive of the Murray Darling Basin Commission for 15 years. He has worked with a range of research funding and provider groups over the years and was Deputy Chair of Land and Water Australia for 9 years during the 1990’s.

He was a Commissioner on the World Commission on Dams, an independent group established by over 50 international agencies and companies to review the development effectiveness of large dams. A highlight was the presentation of their report to the international community represented by Nelson Mandela.

Don has also provided advice to the World Bank on the management of large river basins and has recently worked on the Nile, Indus, Mekong, Ganges and Brahamaputra  Rivers.

He is a Fellow of the Australian Academy of Technological Sciences and Engineering  and was awarded the degree of Doctor of Science (honoris causa) by La Trobe University. He was made a Member of the Order of Australia (AM) for his service to the environment, particularly through the Murray-Darling Basin Commission and through the development of sustainable water management practices.

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Don Blackmore: Good evening everybody. You can see by the first slide that I failed the first test. That is because I had to do – with all these people working in my world – the PowerPoint by myself, you see. You have got 'PowerPoint 101' tonight.

I think it is absolutely fundamental for Australians to think about what is going to happen with our water future. At the highest level, the northern hemisphere has stolen our clouds. And it's true as I stand here.

Their greenhouse gas emissions, development and populations have largely been responsible for the climate change story we now see. We are responsible as well. We are all in the same thing together. But as it turns out, we sit at the epicentre of the impact of those changes. I would like to explain all of that as I go through this talk.

I also want to put some international context for some of the major rivers I work on and ask the question, ‘Is it water for peace or water for war?’, in some of these areas. I think it is a challenging space for the international community. We are not isolated from it here, because we will see the result of forced migration because of climate and water conflict one way or another.

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So let's get started. I have the four Es tonight. And I am in the last one. I am the emotionalist group. I am a bit of an engineer sometimes and occasionally an economist and never an environmentalist. That's not quite true: I try to deal with all of them. But I actually think the water debate is about emotion as well. You can have all the facts. You can line them up. But water goes to your heart. You either feel it and you want to do something about it or you don't. And it is a serious issue.

I can be in the back blocks of Pakistan sitting under a tree having a cup of tea with a farmer and the first thing he will talk about is water, what it means to his family, his livelihood. You can do that all over the world. I think being emotional about water is pretty important, but you want to be able to inform the emotion with information, processes and facts.

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So let's try and deal with a few facts. Why has Australia developed the way it has? The far right‑hand column shows the variation in stream flows in Australia from a dry year to a wet year. A pretty simple stat.

For the Amazon it is stable, with each year flowing pretty much the same. And even if you are in Sudan on the White Nile it is a pretty reliable stream. But the Murray isn't a reliable stream. Neither is the Hunter or the Darling. And this is because of our unique hydrology.

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So when you look at the underlying information that drives the continental hydrology of Australia what you find is that we have about 440 millimetres of rainfall and about 50 millimetres – two inches for those with grey hair, me included – two inches of that water gets into a stream. So we don't have a big conversion rate from rainfall to stream flow.

So if you change what happens between the rain falling on that landscape and a river – for instance increasing temperature slightly, so more water evapotranspires and there is longer between rainfall events and so on – less water will get to both groundwater and to a stream. That is what makes Australia unique.

So I’ll give you one statistic. In the Murray Darling Basin – one million square kilometres of land – onto this basin overall falls 500 cubic kilometres of water. Of that 500 cubic kilometers, 25 cubic kilometres of water actually gets into a river. Of that 25 cubic kilometers, about 15 cubic kilometres would have gone to the sea.

So 475 cubic kilometres is keeping your lawn green, growing a wheat crop, recharging groundwater and so on. But if you switch the thermometer up a little bit and the 475 that is evapotranspired in that landscape becomes 480 or 490, it will have a profound impact in Australia on stream flow. For most of the rest of the world you get 20 per cent of the rainfall reaching a stream, or in North America it’s 43 per cent. You have more space to work, more wriggle room. So this is what makes Australia different to the rest of the world.

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What did we do as a response to that? We built storage capacity. So in the Murray-Darling we have about 25 cubic kilometres of water. That is the axis that says 25,000 – just read 25 cubic kilometres of water – and we built storage capacity of at least 50 per cent more than that for this basin. So the Hume Dam, the Eildon, the Blowering, the Burrinjuck and so on. We have the capacity to store one‑and‑a‑half years of average flow. The reason we did that is because we wanted stability in water supply. We had sufficient reserves to carry us over one year.

That is the reason we have the second or third highest storage capacity per capita on Earth. We were wealthy enough to respond to the signals that nature gave us.

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We then diverted water and we saw, as we went on diverting it, that we were soon going to reach the level when there would be no water to go to the sea from this basin. So if we got to 14 cubic kilometres or 14,000 gigalitres, the basin would be totally used. There would be no water to go to the sea out of this basin. In fact, I think for the last eight or nine years there has only been water leave this basin for six weeks.

This is an area as big as France and Spain. So this is a significant issue for the way we have behaved as a nation to date and has ordained a lot of the way we think about going forward.

We traded a lot off without knowing we were actually trading. We traded-off a lot of environment, we traded-off a whole lot of issues around salinity management in this basin – which I haven't got time to go into – but those are the things we traded. And we didn't know we had them on the trading floor.

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We all want to get into the reform agenda. How do we reform this? Well, Australia has a pretty good record in reform, so I am going to give you 'Reform 101', just for a second. It will take me about one minute, so just bear with me.

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Basically reform isn't about firing a bullet. Reform is about getting the charge right, staying with the game and making sure that you get the political and administrative arrangements in place. So in the Murray-Darling Basin, for example, when we put the cap on water use in 1994 we banned any further growth in water use for every river system here. We banned it. Stopped. Finished. And that's held in place. But the reason it's held in place is that we legislated. So there is a legislative outcome. No backsliding by governments. You have to do the whole lot.

You've got to have a powerful need for reform and right now we do have a powerful need.

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The thing we struggle with in Australia, as we do everywhere, is how do we inform people? I am delighted to see so many people here tonight. But how do you bring people up to speed with the trading environment? A little later in this talk I will take you into another world on the Nile River, with the Nile ministers, on how you establish a trading floor for them in terms of what they have and what their opportunities are.

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It is difficult.

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You need to get the whole sequence right. You sort out what you can do quickly and then you make sure you work hard on the other stuff.

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This is pretty important. You don't let the best become the enemy of the good. So you make sure you balance. You might have an ideal outcome that you are never going to achieve politically but you make sure you do what's best for the community to move forward.

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In Australia, a well‑governed country – we might all not think that, but I'm telling you, I'm celebrating democracy and a well‑governed country. I work in countries where they wish they had the opportunity we have in Australia to institutionalise the change. We should take a moment to realise that good water management is good politics, but you have got to stick with the case. You've got to stay with the game to get us through it. That is 'Water Reform 101'. I just wanted to say that there is a process behind it.

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What has happened to us in Australia? What has been our reform agenda? We are clearly right now world's best practice in water reform. Now if I said that to most people they wouldn't believe it because all you see in the press is trauma, drama, this that and the other. That's all good stuff. But the reality is, in terms of the institutional settings, we are well established to do it. Do we have enough knowledge to feed the change? Well, no, we don't. That's a different story and a different issue.

So what have we done? Institutional change. We separated the water industry, broke it up in the mid‑nineties. Irrigation was all government owned: it is now largely privately owned with government regulation, except for Victoria, where Goulburn‑Murray Water is a government corporation, although separately managed.

But Murray Irrigation, for example, is a separate entity with its own board and it operates under licence. We have separated the regulator from the operator. We have set up a process of water trading. So anybody in this room can go home and go onto the Watermove website, or one of the other sites, buy water in your lounge room – hard to get it delivered to your lounge room, so you want to be a bit careful about that – but you can actually purchase water.

You don't have to own land to buy water now in Australia. You can speculate in water, if you want to. Is that a good thing or a bad thing? You can have that argument. We allow water trade between states. An individual can buy water in South Australia and have it delivered out of the Murrumbidgee River to Loxton, should they wish to, or somebody on the Murrumbidgee can buy water at Loxton and have it delivered somewhere on the Murrumbidgee River. These are, by world standards, unique.

We have had tariff reform. So if you’re like me and got a water bill for 2,500 bucks last year, you'd understand what tariffs do for you. I am a pretty efficient waterer, but my wife likes things in the garden green, so you pay for it. But tariff reform has done that. It means that I pay well above the odds to keep my garden green. I elect to. Even if I do it very efficiently it still costs me a lot of money.

We have seen the National Water Commission (NWC) come on the scene with its regulatory role as well as its investment role, which has been very, very important for the industry. We have seen the change from my old commission to a Murray-Darling Basin Authority where the Commonwealth can now direct ecological outcomes.

I will talk a little bit more about that because that is a challenge. We are now setting up environmental managers that will hold the water that is created for the environment and not regulate the environment – which is a 1970s approach – but manage it with the assets it has in an active way. These are challenging and three or four of these things lead the world in change. So the reform agenda has got some momentum. It hasn't finished, but it has momentum.

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So, let's just talk about where we are on the journey right now. We have a current drought. In 2006 they had a return period of about 1 in 300 years. That was quite a unique period. Certainly outside of any of our memories or records.

Now it is up over 1 in 1000, or 1 in 2000. It doesn't much matter. What it tells you is that we are in an extreme event for which nobody in the water business would have developed their business to deal with. No‑one. No urban business, none of the big irrigation districts, and certainly not the Murray Darling Basin Authority.

As a consequence of that you have got to trade: water security for cities against water availability for irrigators; water security for cities against water available for environment. The noise in that environment has become very, very loud indeed in the last few years.

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Let's deal with the climate story. This is a very noisy graph. I am just going to touch these things at the highest level. I am not going to go down the well too far. Happy to take questions. The blue line is CO2 over the last 800,000 years. The highest this gets to is about 300 parts per million in terms of CO2.

The red line is temperature, which is running from minus eight, ice‑age stuff, through to plus four. But predominantly a little cool.

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So where are we now? Well, we are somewhere around 360 ppm. I don't see it stopping within the lifetimes of the people in this room, I can't see any of my grandkids in here, so I am going to say most of us with grey hair are not going to see this change. We might be able to see it depressed, but we are going to continue to see growth. So as a water manager what does that tell me? I can't rely on other public policy to bail me out of the climate story. It is not possible to rely on it. So we've got to move now.

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So what's happened with temperature, which I think is a pretty good indicator. In Australia it has risen 0.6 to 0.8 of a degree. That’s the thermometer that deals with rainfall to river, that starts to change the way the hydrology of these arid zones in Australia – and we are one – work. I think this is the single most important piece of information when you are worrying about our future. Can we turn that temperature around? No. Not in anybody's life‑time here is my judgment.

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So what has that done to water management? We have the variability that we have worked out how to deal with, and suddenly we are down here. We are asking governments and communities to deal with systems that we once thought were stable. If you were sitting in Perth in 2000 you had enough water to get you through to 2030 comfortably. Now they are putting in their second desal plant because of this uncertainty, because no responsible government is going to put at risk the water supply for human needs because it would be something we'd demand, and they would be voted out in a nanosecond.

But the reality is that there are too many uncertain factors now. There is a drought, which is a cyclic issue. There is climate change and we are trying to unpick that. And then there is the future climate: we have models for that, but how good are they?

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So let's have a look at what that means for cities. Globally we are going to have another 2.5 billion people. I'm not sure we can reign in the world's population by then, but many people are optimistic we can. For many parts of the Earth it is a huge issue to provide food and water.

Australia 2050 may have a 60 per cent increase. It would be modest at 35 million. They will all be living in Canberra or Sydney or Brisbane. But the vast majority will live in the city and, therefore, will demand those systems that we all use.

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So how have our cities gone? Well, this is just a helicopter view. I am going to use the second most used word in the English language, next to 'sustainability'; I am going to use 'integration'. I am going to keep grinding on integration, because when you start to see the numbers you will understand that there are no silver bullets to this. The smorgasbord of things we have to deal with means we have to pick winners that are reasonable for us and we have to be well enough informed to do it.

The cities are colour‑coded so you can see the water conservation, which take water price, dual flush toilets, all those sorts of issues, especially for places like Sydney and Melbourne. And you have other surface sources, supplementary sources. You have groundwater, which is primarily an issue for Perth. Then you get into manufactured water, which is recycling and re‑use of water, all of which require very significant energy costs. Desalination has significant energy costs. Stormwater and rainwater re‑use also demand significant amounts of energy and cost. None of it comes for free.

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I don't want to go through all of this, except the bit in red at the bottom, because we have just started to re‑invent a systems thinking approach for these cities. Each one of them, to their credit, has a water plan, including Canberra. You can argue about it. You can hate it. You can love it, but at least each of our capital cities now has a plan that you can go and fight over. It is well documented and you can deal with it.

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You have to realise is that the cost of our water is going to go up. It is inevitable. We are all going to see a very significant hit in terms of water. Why is that?

This is the cost. We currently source water at about 40 or 50 cents a kilolitre, and we deliver it at about 85 cents a kilolitre on average for normal domestic water. Or a bit more than that. If you want to buy the next cheapest you go and purchase some from an irrigation area. Or you run to demand management, which has basically put the price up. Then you work across the slide.

When you get to rainwater tanks, it’s very expensive. If I had asked whether rainwater tanks were more expensive than desalination I guarantee 90 per cent of the room would have got it wrong, because we think rainwater tanks provide water that is free. But you have to get the plastic, to produce it. You have to pump the water once you've got it. Relatively small volumes compared to what your needs are, and so on.

So when you do all of that everything has a place. My point is that no‑one has a silver bullet for this, but every one of the bullets that are in the belt now are more expensive than our past. So water is going to go up in cost. So the economist in me, in my three Es says, 'Okay, I am going to get some of the outcome I want in terms of water management.' Price goes up. The human reaction to that is to look at all the ways I can deal with efficiency, because I would rather have my money than give it to the authority to spend.

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So there are all of these industry challenges. Hidden in this group is the one that I think is important. Every cubic metre of water weighs a tonne. Unfortunately most of the manufactured water comes from the bottom of the catchment and not the top – that's where they collect sewage, rainwater, sea water – and you have got to put it back up towards the top, and that is expensive. With the associated carbon footprint, it is going to be a real challenge for all of us.  

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Let's leave the urban situation and move to the ‘climate to hydrology story’. And this is, I think, probably the biggest success story for CSIRO in the last few years. They have been able to look at the Murray-Darling catchment with predicted climate change and look at what is going to happen in a river.

It is largely irrelevant whether we get more or less rain. What is relevant is whether we can convert that water that is discretionary for us to use in a way that is sensible.

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So they have done a whole heap of scenarios. It is basically looking at a whole range of GCMs, (Global Circulation Models) and then working backwards to get to the hydrology.

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So what does that show? This is the Murray-Darling. This is what it looks like. By 2030 if you look at the dry scenario, in the red, you see 20, 30, 40 percent changes in run-off. If you go to the wet scenario you've got a modest increase generally – well, some of this is drier – but a modest increase in runoff.

In the monsoon belt you get some of the monsoon coming down and giving you more water, which is not that helpful to Canberra or the Snowy.

So the truth lies somewhere between those extremes.

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Between those extremes there is about an 11 per cent reduction overall, but more importantly a 13 per cent reduction on average in the south. So if you take the median, the best bet, or however you want to describe it, that is what happens. If we don't do anything about it we are probably going to be reasonably comfortable about it because of the way the storage is. They are carry‑over storages, so they will pick up the water at the break of slope.

What pays the price for that change with our current management is the environment. Our rivers go dry. But I don’t think we are going to accept that as a community.

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We have a whole lot of other issues around groundwater. I am sure somebody else will come and give you a much more detailed presentation on the methodology of the science underpinning this. All I want to tell you is the headline messages. There is going to be less water, more variation in supplies and we need to be able to manage that.

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So what is the Australian challenge when it comes to the Murray-Darling? I’m looking at that because it is an integrated basin and I happen to know something about it – so what do you do with this information? This is world's best practice right now in terms of a science approach, and we will probably be rolling this approach out internationally. So if you're a community you have to sort out within a state what happens in your valley. Imagine you are the Goulburn Valley or the Lachlan Valley. What do I want out of this?

Then you have the added issue within the state of how to trade between the Lachlan and Murrumbidgee, or the Lachlan and the Gwyder. How do I do that within a state?

Then you have the next challenge. South Australia is unhappy – it’s been raped. The upper states have taken all the water. What is a fair go? Until now we haven't had a shared vision about the risk to environment, how much we are prepared to trade in environment.

The new Murray-Darling Authority has a charter to come up with a prescription for this. They won't need to use Kings Avenue Bridge to get to Parliament House. They will be able to walk across the lake when they have sorted it. There is no formula for this. This is a judgment call of what is reasonable for the Australian community, and I think one of the great challenges.

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So we have somebody who is dealing with that. Now I am going to tell you about an area that nobody is dealing with and I feel really concerned about it. At a strategic level no‑one owns the irrigation industry any more. There is no vision for it. It just sits there, operates, and the current industry structure works against a cooperative approach, because you have private companies in the Murrumbidgee, Murray, competing for the same space for their own future well‑being. So why would they take an industry approach when they have to trade-off some of their own future?

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We have all of these factors now compounding. Everybody knows that Canberra has got its cheapest water by buying water out of the Murrumbidgee Valley – irrigation water – and storing it in Tantangarra for use down the Murrumbidgee. It’s absolutely the cheapest water for this city. There was a group of people who were willing sellers. But it means there is going to be less irrigation in this valley as a result of it.

Melbourne has entered the market. I work in South Australia. South Australia's bought a very big amount of water in the last 12 months for its future.

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So when you do the sums, on average we used to use 8.5 cubic kilometres of water, 8,500 gigalitres. That's the volume in Lake Burley Griffin every day, 365 days of the year. That is what is consumed in this basin. This is the southern part of it. The 8,500 is the southern part of the Murrumbidgee where the majority of irrigation is.

The Commonwealth is going to recover water for the environment, 1,500 GL. So that is no longer available for irrigation. Climate change; about 1,200 GL is going to come out of it as well.

I think that the urban and high value crops and industry are going to probably buy another 600 GL of water out of that system. So we are going to have an irrigation industry that looks about this big (5,200 GL) in the next 10 or 15 years.

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If that's how big it is going to be, what are we doing about it? What are we doing about irrigated agriculture? Because if it has to be a 20, 30 or 40 per cent reduction how do we manage that process? Which part of the industry remains, which part goes? It is a very important part of the Australian future, in my view.

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So we have the Commonwealth now buying the water. Victoria and the Commonwealth just put a billion dollars each – well, Victoria certainly has – into a modernisation program in Victoria, and now they are going to get water savings. The Commonwealth is also going to invest billions of dollars, if I believe the front of The Australian on Saturday morning. Where are they going to invest it? Because over here if they are buying water for the environment on this channel and then they are investing water to upgrade that channel, it is going to look a bit untidy, and somebody has got to own the whole of that industry, in my view.

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We have markets in the industry with people who are willing sellers. That was all right when there was available water – they were driven by commodity prices – now largely they are driven by mortgage stress, because of the years of drought. The market is not fully informed, because none of the governments have really said how they are going to invest all the money in irrigation infrastructure upgrade.

So if I am a simple soul, living on a dirt road, I'm having trouble getting to market because my road is dirt. I take my produce out and I can't get to market. Somebody knows they are going to seal that road next week but they haven't told me, and I sell my property, I am going to be unhappy.

But the amount of money available in the irrigation industry right now is somewhere between three and four thousand dollars per hectare to enhance production. The industry should know where that is going to go.

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So I think we need an industry and community renewal program that gets the industry involved in what its future will be, because it is going to change dramatically. Urbans are not going to change dramatically. There’s enough water for us in urban environments, we just have to pay a bit more.

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We would have had riots in the streets of Australia if we hadn't had water trade in the last decade. It has taken a lot of the stress off governments because individuals have been able to buy and sell water.

Almost no rice has been grown because no rice farmer is silly enough to use water on rice when he can sell water at three times the price to a horticulturist. That has kept the industry going, because we have had wealth transfer within the industry. So water markets are important.

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Fish, fur and feathers. eWater, CRCs and CSIRO are all working to come up with ways an environmental manager with billions of dollars worth of water in capital can make choices about environmental outcomes. Do we put the water into fish breeding this year to meet our international obligations for waterbird breeding with our friends in China and Japan for the migratory birds? There is no choice: we are going to move into a highly managed environmental outcome.

To do that and get the best bang for our dollar in environmental terms we need a hell of a lot more knowledge than we have now.

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Water insurance products. I want to throw this on the table because there are a lot of bright people in the room. Why aren't we establishing some water insurance policies for our urbans? You and I could pay for them and we could hold the water somewhere – in the Snowy or in Dartmouth or in Burrinjuck – for the years that we want to use it or, in years we don't want it, put it back into the system to support other industries.

Why aren't we buying that sort of insurance rather than the insurance of a desal plant? I showed you earlier it is cheaper. They are the sort of challenging questions where we haven't developed the policy responses that we need. You can do this, providing the states trust each other, and somebody like Canberra [ACT] trusts a third party to hold its water and supply it when it needs it. But it is against our human nature to do it now.

I have my house insured and my car insured and I can't see why we can't get some water insurance products. It's not beyond the wit of man or woman.

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Is northern Australia going to save us down here in the south? Are we going to shift water from the north to the south? Well, I was one of the four experts, so‑called, that did the 'Kimberley to Perth' job a few years ago. Spent $5 million investigating three ways to bring water down; channel, pipeline and ship. The bottom line is the cheapest of the options is three times more expensive than desalination in all its forms, fully costed. It is not going to happen.

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Are we going to develop the north so we can all move to the north and suddenly live in Nirvana and northern Australia becomes the breadbasket for Australia? Well, I costed the Bradfield Scheme a few years ago for a presentation to Cabinet. When you do the numbers what you find is the on‑farm price for that water is about $1,500 a megalitre. Most farmers are now paying less than a hundred. The only crop that you can grow that makes a profit out of that you've got to smoke.

So it's unlikely – the engineering is a piece of cake. These are just simple engineering problems but economically why would we bankrupt the country to do it? I think northern Australia has a future for development of this sort, not of this scale, but of boutique development where it is fit for purpose. But we are not going to see these broad scale developments. They just don't add up.

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That is the story for Australia. Let's move to the rest of the world. Everybody knows that the population is growing and the amount of water is not increasing – not where we want it, anyway. So the per capita availability is dropping dramatically. It is not even around the world, as you would expect.

I want to give you a couple of examples from places I know a lot about because I worked there; the Nile and the Ganges. I don't have the time to talk about the Aral Sea or Indus or Mekong. We will just deal with two because they illustrate the problem or the issue of the scale of them.

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The question you have is whether we can get arrangements in place which will stop people going to war. It is a serious issue.

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So can we build infrastructure to save us from this doom by storing more water? When I was born in 1949 – which has just given away that I am 60 – Ralph, I did those sums for you, mate. I know the subtraction is a bit hard for an older bloke. There were 5,000 large dams on Earth. In 2001 there were 45,000. So we have built a large dam or two large dams every day and commissioned it.

China owns 22,500 of those large dams. They own half the world's population of large dams. The issue is, love or hate dams – that is a debate we can have another time – can we build infrastructure to support the growing population? Well, you would think we would have picked the eyes out of the dams in the locations we wanted to over this time. The answer is that we have. We might build 5,000 or 10,000 dams in the next 30 years, but we are not going to repeat the Blue Revolution of the last 50 years. It's physically impossible because it is not related to where the population is. We can build them all in Siberia if we want to, but it is not going to help us.

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I have been working for four years on the Nile with the Nile ministers to try and get to a situation where – when I first started they wouldn't meet in the same room – we can get a cooperative institution to think about what we might do for the future. This is a river basin manager's perspective – that's mine – each one of the countries has a perspective which comes from thousands of years of history.

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Let me just give you a little heads‑up on this system. I won’t go through it in detail. You have Equatorial Africa up here, 6,000 kilometres long. Ethiopia, which is the water engine of the Nile here [points to slide], and Egypt down here.

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If you look at what happens with rainfall, Lake Victoria gets 100 bcm (billion cubic metres). The other equatorial places get about 500. Ethiopia 410. Sudan a massive amount. Egypt zero. In fact, Egypt gets two cubic kilometres of water a year, almost nothing.

So where does the water use occur? Massive amounts of evapotranspiration in these countries. In Egypt they rely totally on the flow of the Nile for their future, for their very existence. So you don't think they're focussed?

When I took evidence from them on the World Commission on Dams back in 1999 (I think) in Cairo, the government position was: any new development upstream is a 'go to war issue'. That is their public position. They put it on the record. It is a 'go to war' issue for them.

A decade later we have developed into the point where we now have two institutions in the Nile, one in the eastern Nile and one in Equatorial Africa. The international community spent $200 million understanding how this system operates.

I just published a report with a guy from America on the hydrology of the Nile and how it could be shared. I think for the first time they have some facts. We have a model of this system working and we can explain cause and effect to people.

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There are lots of opportunities to improve management. But when you go into this system you have got massive trade‑offs in terms of the sorts of values you might get out of it. This is in Sudan. This is the Sudd, which is about half as big as Victoria. You will hear on the news all the time Juba in southern Sudan and conflict and whatever. But this is a wetland which looks a bit like that over here [top left of slide], which people use and harvest for their well‑being. But it also has environmental values that go far beyond that.

When you look at it – you don't have to do the sums – but there is a hell of a lot of water that goes in and out of this system. In the mid‑eighties, the northern Sudanese decided to drain the swamps. It sounds like a perfectly reasonable thing to do, as long as you don't tell anybody.

They dug a 300 kilometre channel to drain – not fully drain – but drain them enough. A local southern Sudanese finished a PhD in London on hydrology. He went back and said, 'This is going to destroy my community' and took southern Sudan to war. So that's the first war over that canal, and I am pleased to say it has now stopped. You can go on to Google and see the excavator still sitting there rusting in the middle of this huge canal.

So this area is going to take a little while for people to get comfortable enough to know what they are trading. I don't have time to go through all of it. But it’s a serious issue. At least they are now negotiating. I briefed the ministers in Alexandria about six weeks ago, and they now are trying to create that knowledge with their own people. Because why would you trust an Australian? For all the right reasons. So they have got to now own the information, and hopefully it will lead them to where they can work out how they can go forward.

As it turns out there is enough water on the Nile to satisfy all the needs – all the reasonable needs. But it doesn't satisfy the perceptions.

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The Ganges is a bigger deal all together.

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You have 400 million people.

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If you have a look up here – this is just for interest – this is the equivalent. UP, Uttar Pradesh, is equivalent to Brazil in population; Bangladesh equivalent to Japan. So this is one basin with a fair number of people. There’s not one model that predicts what's happening in this basin. Not one. Over 1250 pieces of water infrastructure, dams, diverse points, all sit in this basin.

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You have China up here, Nepal, Bangladesh down the bottom and then you have all the states of India across here [pointing to slide]. This river is highly polluted. This is the centre of poverty in India. It has a high religious significance because everybody goes to the holy river when they can, and so on.

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So you start to look at all the bits. I think this image down here [bottom right] is a satellite image of the lights at night. But in places like Bihar and Nepal, somebody forgot to tell them to switch the light switch on. There is no development.

This is basically the third‑largest river system on Earth and the highest level of poverty you can possibly imagine. So there has to be a way to go forward and share this resource in a better way.

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The Government of India has just announced the establishment of a Ganges Commission to start this process. And the World Bank, Asian Development Bank and all the international players are now rapidly coalescing behind them with information. I hope that CSIRO are going to run the same ‘climate to hydrology’ story on the Himalayas, to feed into the models we are now creating for this system.

This is the first step in a cooperative approach, because if you don't know what you are trading you can't cooperate. So if somebody came to your place and decided to move your back fence in three feet without asking you, you would feel somewhat aggrieved. Water management is no different. People want to know what they are trading, and in these systems we don't know.

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So I am finished. I just wanted to go back and highlight two things that are important, I think. There's no silver bullet to the urban story. There will be an integrated solution.

The people that promote rainwater tanks in isolation from re‑use and re‑cycling, in isolation from economic instruments and so on, that’s not going to work. You have got to get the package right. You have got to stay the course.

Lastly, we can't wait for the climate story to unravel world‑wide. It's irrelevant, quite frankly, to us. We have got to get on and do things, because our future is already ordained. We either manage it or take it. I'm much more comfortable managing it. Thank you.

Discussion

Chair (Graham Farquhar): Questions please, for Don.

Question: It probably doesn't affect the rest of your argument, but I wonder if you would comment on the origin of those figures about 300 year, and even 2,000 year in one case, because it seems to me, looking at the Bureau of Meteorology data and averaging over some reasonable time period, like a decade or so, that the rainfall levels in the Murray-Darling Basin and in south‑eastern Australia are currently at levels that, if anything, is a little higher than the early 1900s. In South Australia they would be quite a bit higher.

Don Blackmore: Yes. That's a point we have to discuss because I think it is fundamental. You are precisely right. But in that sequence of rainfall events the stream flow has been half the recorded minimum through the forties drought or the Federation Drought.

Why is that so? Why do we suddenly get a sequence of rainfall not that dissimilar to the other historic sequences, but we get river flows that are half the minimum we ever recorded? To understand that you have got to go to the landscape transmission of that water, the rainfall. It might turn out that we can still grow crops and some pasture, as we have been doing, but we are not able to support our consumptive industry, like you and me flushing a toilet, or an irrigation farmer, because we don't have the water in our rivers.

So we didn't take rainfall, we took stream flow, and we did a back regression. Am I saying it is perfect? There is no way in my life I am betting my reputation on 1:2,000 years, but I am telling you the stream flow we have had is half the lowest ever recorded previously and, therefore, it is a very rare event.

Question: Would you like to speculate on what the urban water environment will look like in, say, 15 years rather than what it should look like? Everybody talks about integration and sustainability. Just take Victoria's Melbourne situation, huge investment in upgrading recycling plants. Can't do anything with the water. Lots of investigations into large stormwater re-use systems. No use at all. Not viable.

We get all these little integration sewer mining projects. Stormwater: localised, no real major impact. So we turn to desal. Is that what you think the future is going to look like?

Don Blackmore: Let's think about what I call 'manufactured water'. Take recycling, it is manufactured water. Take a stream; you process it, store it, pump it back. Desal is exactly the same. It is a manufactured water stream. All of those have significant costs. So I think all of us would like to see more generic recycling.

The [Australian National] Botanic Gardens: they were taking potable water where they could have taken recycled water. Now, I think it has all been approved that they can take it out of the lake. That is a very cheap option because it is just a pump station. Don't have to treat it. You have the storage already existing. So when they exist you want to do it every time you could. You don't have to drink the water and it is fit for purpose.

But as soon as you try and integrate water into the system of drinking we have a problem, because as a community we demand higher standards for that water, which is reasonable. It has to be treated to a very high standard. That comes at a very significant cost.

So what's the future? I think that we are paying a hell of a lot for insurance right now. My water insurance is desal; it’s largely an insurance product. As a water manager, when you design an urban supply system you would normally design it so that you would eventually drain the storages, or get down to relatively low levels, because you would have confidence, looking back at the last hundred years or 150 years of data, that the storage would bounce.

So if you got down to 20 per cent with some modest restrictions and then the next year it got wet, you would say it did exactly what we designed it to do and life was okay. Well, what happened? Because of climate change, because the drought has extended, the storage has come down. We have a lot of uncertainty. So governments have gone and bought insurance. So you can see every desal plant as an insurance scheme.

One of the challenges is going to be when to switch them on and then when to decommission them, because when they are running they are fairly expensive little brutes. They have a fixed cost, but when you actually have to pump the power through them as well – so there is going to be real challenge.

The world's largest desal plant in Numa, on the Colorado system, was designed so America could provide its treaty obligations to Mexico. They built this huge plant. I mean acres of it. It’s operated for three months since 1991. They found other ways to do business. But that was their insurance. Only America could afford it, I thought. But we are in the insurance business too now.

Question: I would like to ask a question about forests and rainfall. I believe in the Middle East about 10,000 years ago that North Africa was quite heavily forested. Humans have been busily denuding the planet ever since then, even in Australia for the last 200 years and perhaps before that. There is some evidence from Western Australia that one side of a rabbit‑proof fence has not been cleared of vegetation and the rainfall there is significantly higher than the side that has been denuded.

If you want a systematic approach, there's a lot of evidence to suggest that we should protect forests in terms of climate change for biosequestration. Is it not equally logical that we should retain forests for water sequestration?

Don Blackmore: Right. The first part of your proposition I will have an argument about, whether one side of a fence we can get a micro‑climate that will change the rainfall. I doubt that. We can go into a conversation why. But your fundamental point is, right now whether we should be protecting trees in our catchment areas. The answer is absolutely yes. There’s a range of reasons why.

I think that for our water supply catchments we should be doing everything humanly possible to protect the natural asset.

It’s a complicated story, like everything else. But the reality is, in the catchment areas, we want old growth, well‑established forest, as a water engineer. What we don't want to have is freshly growing forest because they are water users.

Say we had a fire through a catchment. The growth phase of those trees use a lot more water until they get to the mature phase. So if we have them in our catchment areas we are going to pay a very large water penalty as we go through the growth phase of our new forest, until we get canopy closure. Now, we can't afford that, quite frankly. We have just had that visited on us by bushfires in the last few years.

You've got yourself another challenge there when you come to revegetation in high rainfall zones. If you have trees in areas with above 1100 millimetres of rainfall they use about two megalitres per hectare, 2,000 cubic metres of water per hectare more than pasture. So you are doing a trade‑off in water use.

Question: Speaking of sustainability, how long before all these reservoirs silt up?

Don Blackmore: In Australia it's a very long time. You know, hundreds of years and thousands of years for reservoirs. So in Australia, where most of the erosion occurred millions of years ago, we have a very stable reservoir environment. Not totally. But our big reservoirs, they are not an issue in a generational or even multigenerational sense.

If you were somewhere like Pakistan, where Tarabulus was built with a 38-year life, and it is the biggest piece of infrastructure in Pakistan, they have now extended that to 52 years. So they have another 32 years to go before it is completely silted. So they have to build an eight or 10 billion dollar structure just to stand still. Anywhere off the Himalayas you cannot stop siltation.

Forget trees. When you get a 7.8 earthquake that shakes, rattles and rolls, whole mountains go. It is still actively eroding. I hear people say, 'I'm going to go and plant Nepal and stop erosion.' Well, I have to tell you they're off with the fairies. You can plant some of it for good effect, but the reality is you can't overcome the movement of the plates that will continue in that region.

The vast majority of the developing world is dealing with this; the dual impacts of flood and sedimentation. And the assets they are creating are all short-lived assets.

Question: Two questions, Don, about groundwater. The first one is about storage. One vision might be, instead of having surface water storage, to think much more about underground storage. You were talking about insurance. That would be a nice place to put some. So I wondered what you thought the prospects were with that.

And the other question is about groundwater and the environment. Most of the discourse is about the way groundwater pumping takes out stream flow. There is not much about the way surface diversion takes out recharge, and keeping groundwater flowing and aquifers healthy is making a very good contribution for the environment, which we don't look at maybe as much as we should.

Don Blackmore: I couldn't agree with you more. I think people would be shocked if they knew the groundwater dependent ecosystems we have in Australia. A very large percentage of the ecosystems are groundwater dependant. So your point is exactly right.

I think the challenge we have now is many of our existing aquifer systems by the new hydrology have gone from being maybe reasonably managed to being over-committed. So how do we deal with that? Governments always get nervous because the word 'compensation' comes around. If you look at the CSIRO report, the Sustainable Yields report, you will find a whole lot of groundwater systems that, because of the change in hydrology, immediately go into over-committed systems which need a correction.

I don't know that people are ready for the big shift back. They haven't got the appetite for it right now, but over the next 15 years it will be a headline issue. So groundwater is going to become incredibly important.

Are there aquifers big enough to store large enough volumes of water to provide insurance? The answer is absolutely. There’s a limestone aquifer outside of Adelaide in the Murray Basin. It could provide hundreds of cubic kilometres of water stored safely sitting on top of salt water. You have to recover it carefully. But those things are possible.

We looked at it in the nineties. It wasn't economic in the nineties, but we weren't competing with desal then. In the nineties we looked at it for agriculture. We didn't look at it competing with desal into urbans. So there's a real prospect.

Question: Just coming back to desal. It concerns me a bit because I simply don't know what happens to all the salt that is removed. Aren't we creating further problems for our soil and our agriculture, or the use of the land by simply doing that?

Don Blackmore: You are talking to a guy that set up arrangements to pump 3,000 tonnes of salt a day away from the River Murray and have to store it in inland Australia over the last 20 years. Going to bed at night worrying about the sustainability of it – because when you are into recharge and salt storage, which we were, dealing with what is underground is always a tricky proposition.

Every one of those schemes were designed for a 1500‑year life, not that that makes it good or bad, but just gives you an idea. Desal is a very different issue. With desal most of it is costal based. The evidence from Western Australia – which is an evolving story – is that the diffusion arrangements even in Coburn Sound, have shown in the last three years that they are getting effective diffusion and mixing of the concentrated brine stream back into the estuary and then remixing in the ocean with wins over time.

The key environmental impact, putting aside the energy to drive a desal plant, is always the effective dispersion of the brine mix. If you are far enough into the energy zone in an ocean it is never a problem. It is always a challenge. If you are going to do it into an estuary somewhere you would have a huge problem over time. But if you are doing it where it mixes with the ocean, it is just a drop in the ocean.