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www.abares.gov.au
Rural water markets in Australia: Assessing progress and moving - - PowerPoint PPT Presentation
Rural water markets in Australia: Assessing progress and moving - - PowerPoint PPT Presentation
Rural water markets in Australia: Assessing progress and moving ahead Peter Gooday ABARES www.abares.gov.au Water reform 1994 COAG Agreement 2004 National Water Initiative 2007 Water Act 2008- Water for the Future Basin Plan
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What is happening now?
Basin Plan
- Reduce consumptive diversions
- Devise environmental watering plans
- Reduce trade barriers and transaction costs
Water for the Future
- Water purchases and infrastructure investment easing the
transition to SDLs
- CEWH acquiring water for the environment
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Benefits of reform to date
- Increased water trade
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Allocation trade as a proportion of irrigation diversions in the MDB
Source: MDBC 1997-2008, MDBA 2009-2011
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Water prices and availability
100 200 300 400 500 600 0.00 0.10 0.20 0.30 0.40 0.50 0.60 0.70 0.80 0.90 1.00 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 20010-11 Average annual allocation price ($ / ML) MDB Allocation percentage Allocation prices (Murrumbidgee) Total MDB allocation Series3
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Benefits of reform to date
- Increased water trade
- Water market provided incentives to conserve water
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Allocations and irrigated production
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Benefits of reform to date
- Increased water trade
- Water market provided incentives to conserve water
- Carryover has improved flexibility and ability to manage
water supply uncertainty
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Benefits of reform to date
- Increased water trade
- Water market provided incentives to conserve water
- Carryover has improved flexibility and ability to manage
water supply uncertainty
- Problems?
- Processing times for trades
- 3rd party impacts
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What remains to be done?
- Further reduce trade barriers
- Improve the definition of storage rights
- Infrastructure and delivery charges
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High reliability shares in Victoria
As at end of 2010-11 water year (30 June 2011)
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What remains to be done?
- Further reduce trade barriers
- Improve the definition of storage rights
- Improve on ‘postage’ stamp pricing
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The next set of reforms
- Operation of the CEWH in the market
- Development of new products
- Storage and carryover rights
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Environmental demand vs. Environmental water allocations
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The next set of reforms
- Operation of the CEWH in the market
- Development of new products
- Storage and carryover rights
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Water property rights
- Should reflect physical realities
- Can help reduce costs:
- in years of high environmental demand
- and in extreme dry periods
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Capacity sharing
- Unbundled rights: water, storage, delivery
- Water users have much greater control
- Implementation issues
- initalisation
- information burden
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Conclusions
- Benefits from reform … still some to come
- CEWH comes with some challenges
- Further water property rights reform
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