Article courtesy of Randall Hackley, Lynn Doan and Phoebe Sedgman | April 12, 2015 | Bloomberg | Shared as educational material
LONDON/SAN, FRANCISCO/MELBOURNE AUSTRALIA – Australian farms and cities manage almost every drop of available water to make the most of supplies on the driest inhabited continent. No wonder California is looking Down Under for help with its record drought.
Four years of historic water loss have left the most populous U.S. state with depleted reservoirs, fallow farmland and billions of dollars in emergency spending to keep faucets open. Unlike Australia, where water is tightly regulated and tracked by meters, usage in parts of California is unmonitored, urban supply remains cheap and aquifers can be tapped by almost any landowner with a permit to drill a well.
“We are very, very inefficient as a society on how we use water,” said Felicia Marcus, chairwoman of the State Water Resources Control Board, which regulates supplies for 39 million residents in California, America’s biggest water user and top agricultural producer.
While the state is a long way from copying a foreign system with different property-rights laws and the world’s only large-scale market for trading water, Marcus and about a dozen other state officials met in Sacramento with an Australian delegation in December to gather ideas. Some, like mandated monitoring and conservation, were among the emergency measures imposed by Gov. Jerry Brown this month. They included an order for cities and towns to reduce consumption by 25 percent.
The state probably will have to do more. Largely exempt from the new curbs is agriculture, which accounts for 80 percent of water consumption. California generated $46.4 billion of farm sales in 2013, including milk, nuts, fruits and vegetables. While most growers have seen their government water allocations cut to zero, many retain access to water rights and are drilling more wells on their land, straining aquifers as surface supplies get scarcer.
The system is different in Australia, where land and water rights are separated and tightly controlled.
The country, about the same size as the 48 contiguous U.S. states, employs a market-based system created three decades ago that allows traders, farmers and government entities to buy and sell 1.5 billion Australian dollars ($1.16 billion) of water annually through exchanges and brokers. Most of the trading is in the Murray-Darling Basin, which produces a third of Australia’s food, almost all of its rice and cotton, and half of its dairy output.
“We’ve developed some globally unique ways of managing our water resources” to provide greater efficiency of use, said Tom Rooney, co-founder of the water broker Waterfind Pty in Adelaide.
A drought in Australia from 2002 to 2010 reduced water supplies by 70 percent, but the nation’s productive capacity declined just 13 percent, Rooney said. The effects of the dry spell were limited by more efficient irrigation, and trading of water and water rights helped better allocate limited supplies, he said.
Water extraction is regulated, with meters tracking how much is taken to safeguard sustainability, said Kim Morison, a managing director at Brisbane-based Blue Sky Alternative Investments Ltd., which manages more than A$1 billion, including a fund that holds tradeable water rights.
“We are well ahead of the curve,” Morison said. “We have much more of a focus on water as the lifeblood of our communities and environment.”
The nation’s regulated trading helps create incentives to conserve water. Australians apply treated wastewater to gardens and golf courses and mostly use dual-flush toilets that are more efficient. A 2007 campaign in Brisbane sought to cut water use to 140 liters (37 gallons) per person a day using timers that limit showers.
Mandated reporting of use data also allows the government to track every drop.
“That’s not the way California’s system works now,” said Thomas Howard, executive director of the water control board, adding that the current crisis is certain to bring changes. The state consumes 10 percent of the U.S. supply, more than New York, Texas and Nevada combined.
The Pacific Institute, an Oakland-based environmental researcher, said in a 2010 report that farmers still irrigated more than half of the state’s crops by flooding rather than more efficient drip systems. The institute urged conservation measures, including high-efficiency toilets and washing machines, to cut California’s urban water use.
Americans don’t properly value water like other resources, and changing the system to reduce waste and encourage more efficient use could take decades, said Robert Glennon, a University of Arizona professor and author of “Unquenchable: America’s Water Crisis and What to Do About It.”
The biggest challenge would be to separate water rights from land ownership, said Wes Strickland, a water attorney for Jackson Walker LLP in Austin, Texas. Such rights are linked to property, and when owners sell them, the transactions are mostly decentralized and don’t require state approval.
The worsening drought is forcing California policymakers to consider all kinds of changes, especially after the winter snowpack in the Sierra Nevada mountains yielded the lowest water level in 65 years of record-keeping. The state relies on melting snow to replenish streams and reservoirs. Farmer-drilled wells have eroded aquifers that may take decades to recover.
“What causes change more than anything is crisis,” the water control board’s Howard said. “I do see us making progress and moving toward the ideal system.”
Even before state officials met with the Australian delegation, changes were underway. In November, voters approved Brown’s $7.5 billion bond to preserve water quality and increase storage and delivery to drought-stricken cities and farms. The state water board said April 3 that farmers probably will see supplies curbed in key watersheds. Last year’s curtailments led to 400,000 acres (160,000 hectares) of fallow farmland and thousands of agricultural jobs lost.
The water board is expected to vote May 5 on rules for the governor’s restrictions. It recommends investing in technology that measures water supply and demand, which Australia has made a central part of its system.