Prof. Mike Young
Research Chair, Water Economics and ManagementThe University of Adelaide
"Irrigation Technology to Achieve Water Conservation,” Zaragoza, Spain, 12-15th May 2008
Non-point pollution control & irrigation: Some Australian experience
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Main Non-Point Pollution Problems
1. Irrigation salinity (Murray-Darling)
2. Sediment & nutrient pollution (Great Barrier Reef)
3. Nitrate contamination of groundwater & surface water systems.
Case Studies River salinity in the Murray-Darling Basin
Hunter River
Geographe Bay
Dryland salinity trading
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Institutional Structures
Federation Responsibility with individual state
governments
States Environmental duty of care on land users.
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Education & Governance
56 Natural Resource Management Region Boards established
Accessing National money
Emerging Regional Autonomy
Employing own staff
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Market – Based Instrument Trial Conclusions
First Round ($5 million)
Auctions, cap & trade (for point sources) & offsets work
MBI’s can deliver large savings
MBI’s require testing & adaptation for landholders to participate
MBI’s need to be tailored to individually, no one-size-fits all
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Interstate Salinity trading
Aim to keep river salinity at Morgan <800 μS/cm of electrical conductivity for 95% of the time
States pay for cost of off-setting the damage they would otherwise do
Salinity impacts recorded on “A” & “B” salinity register
“A” salinity register – all recent causes of salinity change
“B” salinity register – ‘legacy of history’ impacts
Debits to the “A” salinity register charged to States according to estimate of economic impact of each unit of salinity as measured at Morgan
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Hunter River - tradeable salinity permit
Limited to factories in the Hunter
Factories receive permits and allowed to minimise costs of disposal
Number of permits required to discharge a unit of salt into the River is a function of ambient river salinity
Firms have incentive to store saline wastewater and discharge when ambient salinity is low
Trading is now well established
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Busselton Bubble Licensing
Town of Busselton wanted to expand and dispose treated sewage into Geographe Bay Dairy industry responsible for 95% of the nitrates
and phosphates that flow into Geographe Bay
5 % only from town
Treatment of town sewage would cost $5 million plus $200K per annum
Cheaper to reduce pollution from dairying Needed to employ people to negotiate
agreements
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Dryland Salinity Trading (Bet Bet, Victoria)
Bet Bet, Victoria is one of the largest contributors to salinity in River Murray System Trial to invite farmers to participate in a program that
would enable them to trade salinity reduction credits
Allow farmers to deliver the contracted outcome in the most efficient way possible
Reward payment made to all farmers if the trial delivers agreed outcome
Conclusions More efficient and cost effective than regulation
Collective group incentive payment (a reward) increases community interest and participation
Reward “first-mover proofed” the trial
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Salinity Levy - Victoria
Trade from
Trade to LIZ 1 LIZ 2 LIZ 3 LIZ 4 HIZ
Perm Perm Perm Perm Perm
Outside area
$26.60 $65.00 $130.00 $260.00 No Trade
LIZ 1 $0.00 $39.00 $104.00 $234.00 No Trade
LIZ 2 $0.00 $0.00 $65.00 $195.00 No Trade
LIZ 3 $0.00 $0.00 $0.00 $130.00 No Trade
LIZ 4 $0.00 $0.00 $0.00 $0.00 No Trade
HIZ No Trade No Trade No Trade No Trade No Trade
Salinity levies charged for permanent trades between High Impact Zones (HIZ) & Low Impact Zones (LIZ). (No trade is allowed within or into a High Impact Zone)
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Salinity off-sets (SA)
SA uses off-set approach to manage salinity
Irrigation areas classified into 3 zones
1. Low impact
2. High impact
3. High impact zones behind a salinity interception scheme
Off-set trading has lead to increase in irrigation development opportunities at no cost
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Salinity off-set policy (SA)
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Environmental Benefit Indices
Indices enable objective evaluation of relative merits of different project outcomes
Dramatic increase in returns per public dollar invested
Experience Most benefits of MBIs derive from the benefit
index
Tenders more cost-effective if uniform payment per unit of benefit delivered is paid
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Applicability & recommendations
Countries should consider using market-based approaches they work! Greater flexibility in achieving control
Leave greater opportunity for innovation
Allow non-point source control at less cost
Lessons Underpin with regulations & implement at local scale
Focus on land use change & keep simple
Consider community reward schemes
Use indices
Point source controls can be used to deliver non-point benefits
Contact:
Prof Mike YoungWater Economics and ManagementEmail: [email protected]: +61-8-8303.5279Mobile: +61-408-488.538 www.myoung.net.au
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