Water and Sustainability Economic Approaches Essay

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Although the Murray-Darling River covers only about 14% of Australia's irrigated land, 50% of Australia's sheep and 25% of Australia's cattle rely on this source. Also, 40% of the nation's rice crop and 80% of its canned fruit product relies on the Murray-Darling River Complex. In all, three-quarters of Australia's water comes from the Murray-Darling River (Hussainy, p. 205).

Of course there are conflicts when so much is at stake. For one, the river carries about 2.5 tons of sale into South Australia "every minute," Hussainy writes. Inflows of saline groundwater are attributable to the problem -- and also, the removal of "native vegetation" and irrigation causes the salt to become a problem. When the native vegetation is replace with shallow rooted crops, it is bad ecologically. The authors say that "sustainable development ecology should be regarded as part of economics" but the "myopic view of technocrats" views ecology and economics as being "antagonistic rather than synergistic" and as a result many of the river's red gum trees "are dying" due to the increase in salinity. Dead trees means the fauna that depend on the trees are stressed; "Water management is a serious issue that requires a complete change in attitude and infrastructure" in Australia (Hussainy, p. 207).

Sandra Postel and Brian D. Richter have a different angle on the Australian situation. They explain that the Murray-Darling basin has "spurred an active water market" that involves the concept of "Cap-and-Trade" (p. 114). New water demands, Postel goes on, are now being met through "conservation, efficiency improvements and water trading. Indeed, the ability to trade water licenses is a key to the cap's workability" because the reallocation of water resources becomes "critical when the total supply is not increasing." Although Hussainy's book was published in 2007 and the Postel -- Richter book went to press in 2003, it would seem that Postel has a more thorough explanation for Australia's effort to combat the chronic shortages of water in the whole continent.

Postel explains that since Australia instituted a cap in the mid-nineties the volumes traded in 2003 are more than "five times greater than the volumes traded in the early nineties." And the cotton growers in Australia have paid "about $560 per thousand cubic meters [of water] for permanent water licenses" (p. 114). The government has made it easy for farmers and cotton growers to trade water rights; there is a Web page for that purpose and here is another example of what the U.S. could learn from foreign water management policies.

Number Three: Integrated Water Resources Management

According to John Dixon and K. William Easter (writing in Watershed Resources Management: An Integrated Framework with Studies from Asia and the Pacific) an integrated watershed management approach helps managers to fully grasp the "range of factors" that affect resource use and development in watersheds. While using the actual boundaries of the watershed as boundaries or jurisdictions for resource management is not new, they admit, because it is used in other countries. However the approach has "strong biophysical and economic logic"; to wit, the watershed management approach has "strong economic logic" because the "externalities involved with alternative land-management practices on an individual farm," for example are internalized if and when watershed is managed as a sole unit.

Watershed approaches can be integrated with or be part of programs that include soil, community development, farming practices, forestry and soil conservation, but there must be integrated planning and cooperation before a process can begin.

Problems arise in watershed management in many Asian countries, Dixon writes (p. 21); management activities are often "fragmented" between private and public entities. For example, the Ministry of Forestry might manage the upstream watershed activities and getting hands into the pie too will be the Ministry of Agriculture, the ministries of Irrigation, Energy and Public Works as well. Then you have private landowners, NGO groups that depend on water for their sustenance. And so the authors point out that all the various entities that have a role in watershed management must be brought together at the planning stage so that "management inputs" along with "natural inputs" can result in "outputs of useful goods and services" (p. 21).

What does the U.S. experience offer to other countries and international organizations? If one reads what Sandra Postel and Brian D. Richter write in Rivers for Life: Managing Water for People and Nature, other countries interested in water resource management policies will learn what not to do, how not to manage those finite and precious resources. To wit, on page 113, Postel (et al., 2003) explain that "Virtually all water authorities have the ability to price water or water services, yet many do not use this tool effectively." Moreover, the U.S. is challenged today with "sustaining jobs, livelihoods and overall economic progress without overstepping" limits (Postel, p. 112). Economic incentives, "especially effective water pricing and the creation of water markets" are potentially helpful measures to boost water productivity, Postel explains.

What can be learned by looking at the typical water management model internationally is that farmers pay far too little for water; they often pay "less than 20% of the real cost" because governments subsidize irrigation water. By having to pay so little for access to water, farmers are discouraged, not encouraged, to practice "efficient irrigation" strategies. Efficient use of water is not a popular practice when water comes so cheaply. Postel and Richter point to a project in the Central Valley of California that uses a "three-tiered water rate structure" (p. 113). Irrigation districts pay a fixed rate if their usage is between 80 to 90% of their allotment according to their contract (p. 113). But it usage goes as high as 90 to 100% the price for water -- "in some cases nearly three times more than the base level" (Postel, p. 113). This is a classic incentive for an irrigation district to save water, and should be considered a smart model for international water agencies and governments.

By implementing the rate structure similar to the California Central Valley's strategy other western states -- and foreign governments -- could see a dramatic reduction in water usage. One district in California used 19% less water within a few years, due to the incentive mentioned in the paragraph above. Postel (pp. 113-114) mentions international water issues that could be implemented in the U.S. -- for example, Chile and Mexico have formal systems of "tradable water rights" on a national level, the only countries (at least at the date this book was published, 2003) that offer water trading on a federal government level.

As mentioned earlier in the paper, Chile uses water markets to help the demands for water that grow as the wine industry continues to prosper (requiring large amounts of water). What water trading and water markets have meant to Chili goes farther than just helping farmers and helping the economy. Postel (p. 114) asserts that because with new more progressive policies in place cities can actually buy water from the farmers "rather than constructing a dam at greater economic and environmental cost." The city of La Serena bought "28% of its water rights from nearby farmers" which put off the need for a new dam, Postel writes. The city of Arica is leasing groundwater from farmers and it have no need for a dam to be build anytime soon, the author continues.

In Mexico, water rights are defined "volumetrically" which means that a given district (community or section of farm land) has rights to water in a specific basin, and if the district goes over its allotment "deficits or surpluses are shared proportionately" (Postel, p. 114).

The ability for agencies and NGOs to purchase water rights is good for the wildlife whose habitat intersects with water resources. When the Snake River (in Idaho) froze in one particular fork during the bitterly cold winter of 1988-89, the ice prevented trumpeter swans from getting to a critical food supply under the ice. So the Nature Conservancy and the Trumper Swan Society each bought nearly 4 million cubic meters of water "from the upper Snake River water bank" (Postel, p. 115). With that purchase, authorities release that water that had been purchased to save the swans and a local water district kicked in an additional 12.3 million cubic meters of water -- and as a result, the ice broke up and the trumpeter swans survived.

This instance is something that if used internationally could be of benefit to other species that are struggling with a man-made or natural weather phenomenon.

On the subject of the environment, the message should go out to international conservation groups that in the U.S. A number of environmental / conservation groups are involved in the purchase and trading of water rights. Those include: The Nature Conservancy; Trout Unlimited; Environmental Defense Fund; Oregon Water Trust; Washington Water Trust, among others. Postel warns though that "the buying and selling of…[continue]

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