Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin AWP Knowledge Framework Economic Growth and Sustainability Division, ESD), with guidance The Australian Water Partnership (AWP) is committed to enhancing from James Morschel (Water Section, ESD). sharing of knowledge and tools for sustainable water management to improve water planning, allocation and governance by governments, Australian Water Partnership contributions by Rory Hunter industries and civil society. This knowledge product supports the AWP (Program Lead), Katharine Cross (Mekong Coordinator) and Knowledge Strategy and contributes to the Australian Perspective Veitania Lepani (GEDSI and Program Officer). Series under the Australian Bookcase. The other tiers within this bookcase are the Australian Journey Series and Guide Series. The authors also thank the following people for contributing to the case For more information, visit waterpartnership.org.au study: Joel Bailey, Shishutosh Barua, Andrew Boulton, Emma Carmody, Francis Chiew, Andy Close, Peter Davies, Joe Davis, Brian Finlayson, GWSP Jim Foreman, Neville Garland, Christopher Gipple, Simon Hone, This publication also received the support of the Global Water Security Hilary Johnson, Asitha Katupitiya, Sean Kelly, Mark Kennard, & Sanitation Partnership (GWSP). GWSP is a multidonor trust fund Kate Lee-Perry, Mohammed Mainuddin , Bruce Male, Tom McMahon, administered by the World Bank’s Water Global Practice and supported Lara Palmer, Caun Petheram, Tim Rossi, Craig Simmons, by the Australian Government Department of Foreign Affairs and Michael Stewardson, Jody Swirepik, Hilton Taylor, Hugh Turral, Trade, Austria’s Federal Ministry of Finance, the Bill & Melinda Gates Andrew Weavers, David Winfield, Vicky Woodburn, Michael Wrathall Foundation, Denmark’s Ministry of Foreign Affairs, the Netherlands’ and Hongxing Zheng. Ministry of Foreign Affairs, the Swedish International Development Cooperation Agency, Switzerland’s State Secretariat for Economic Citation Affairs, the Swiss Agency for Development and Cooperation, and Australian Water Partnership and World Bank. (2022). Valuing Water: the U.S. Agency for International Development. The Australian perspective. Lessons from the Murray-Darling Basin. Australian Water Partnership, Canberra, and World Bank, Washington, DC. About the Authors Prepared by: Rod Marsh (marsh.eco), Amanda Wealands, ©2022 eWater Ltd and The World Bank (published 09 13 2022) Simon Tilleard, Barry Hart and Ross Hardie (Alluvium Consulting), International Bank for Reconstruction and Development and Garry Smith (DG Consulting) The World Bank Group 1818 H Street NW, Washington, DC 20433 USA Alluvium’s core business for over a decade has been the delivery of ISBN 978-1-921543-97-5 policy, strategy, plans and governance arrangements for environmental water management programs. Our team has a deep understanding of Cover Image the mechanisms for managing environmental water in Australia and Old Male Kangaroo (Source: Adobestock/ Dylan Alcock) the Murray-Darling Basin. Our understanding is practical and gained Disclaimer from a wide range of projects covering the identification, evaluation This publication has been funded by the Australian Government and realisation of the benefits of providing water for the environment through the Department of Foreign Affairs and Trade. The views in the MDB. expressed in this publication are the author’s alone and are not necessarily the views of the Australian Government. This case study was developed in collaboration with our partners marsh.eco, and DG Consulting. This work is also a product of the staff of the World Bank and of the Global Water Security & Sanitation Partnership (GWSP) with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of the World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colours, denominations, and other information shown on any map in this work do not imply any judgment on the part of the World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Nothing herein shall constitute or be considered to be a limitation upon or waiver of the privileges and immunities of the World Bank, Acknowledgements all of which are specifically reserved. In the case of any discrepancies This report is the result of a collaborative effort between the between this English version and any subsequent translations, World Bank and the Australian Government Department of the English version prevails. The report reflects information available Foreign Affairs and Trade with financial support from the Australian up to December 20, 2020. Water Partnership to promote more equitable, transparent and effective management of water resources development. Rights and Permissions The material in this work is subject to copyright. Because the The World Bank team was led by David Kaczan (Senior Economist, World Bank encourages dissemination of its knowledge, this work may SEAE1), Marcus Wishart (Lead Water Resource Specialist, SEAW1), be reproduced, in whole or in part, for non-commercial purposes as Si Gou (Water Resources Management Specialist, SEAW1), and long as full attribution to this work is given. Xiawei Liao (Water Resource Specialist, SEAW1),. Guidance was provided by an advisory panel of peer reviewers within the World Bank, including: Any queries on rights and licenses, including subsidiary rights, should Eileen Burke (Senior Water Resource Specialists and Global Lead for be addressed to: Water Resources), Shelley McMillan (Senior Water Resource Specialist Publications, The World Bank Group, 1818 H Street NW, Washington, and Task Team Leader for the Mekong Vision 3.0), Halla Qaddumi DC 20433, USA (Senior Water Economist), William Young (Lead Water Resource E: pubrights@worldbank.org Specialist) and Hisham Osman (Environmental Engineer). The report was F: 202-522-2625. prepared under the guidance of Jennifer Sara (Global Director of the Water Global Practice), Benoît Bosquet (Regional Director, Sustainable UC Innovation Centre (Bldg 22), University Drive South Development, East Asia and the Pacific), and Sudipto Sarkar (Practice Canberra ACT 2617 AUSTRALIA Manager, Water Global Practice, East Asia and the Pacific Region). T: +61 2 6206 8320 E: contact@waterpartnership.org.au Australian Government Department of Foreign Affairs and Trade waterpartnership.org.au contributions have been led by John Dore (Lead Water Specialist, Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin iii Table of Contents Executive summary 1 This case study 1 The importance of managing water for the environment 2 Allocating water to the environment in Australia’s Murray-Darling Basin  2 Current approaches to valuing and managing water for the environment in the Murray-Darling Basin 4 Lessons based on Australia’s Murray-Darling Basin  5 1 Introduction  6 1.1 About this case study  6 2 Overview of the Murray-Darling Basin 9 2.1 Introduction 9 2.2 Governance  9 2.3 The Murray-Darling system 10 2.4 Population, major industries and water use 13 2.5 River and wetland environmental assets and their condition 14 3 History of water management in the Murray-Darling Basin 16 3.1 Introduction 16 3.2 Reshaping the MDB’s lands and waters (1830–1917) 18 3.3 Build and supply, regulating the rivers (1918–1979) 22 3.4 Environmental challenges demand a response (1973–2007) 26 3.5 Reforming how water is managed in the Basin (2007 to present) 35 Current approaches to valuing water for the environment in the 4  Murray-Darling Basin 40 4.1 Institutional roles and responsibilities for managing water for the environment  41 4.2 Recognition and acceptance of environmental values 43 4.3 Measurement of environmental values 45 4.4 Mechanisms that realise the value of environmental water 52 4.5 Learning and adaptation 72 5 Lessons based on Australia’s Murray-Darling Basin experience 76 5.1 Recognition and acceptance of environmental values 76 5.2 Identifying environmental water policy options 78 5.3 Implementing environmental water policy 79 Glossary82 Valuing water: The Australian perspective iv Environmental values of water in the Murray-Darling Basin Attachments84 Attachment 1. Criteria for identifying an environmental asset (Basin Plan 2012, schedule 8) 84 Attachment 2. Criteria for identifying an ecosystem function (Basin Plan 2012, schedule 9) 86 Attachment 3: Principles to be applied in environmental watering (Basin Plan 2012, Division 6) 87 References89 Tables Table 1 Overview of approaches, tools and examples for recognising, measuring and realising environmental values in the Murray-Darling Basin 40 Table 2 Sustainable diversion limit (SDL) options modelled 49 Table 3 Tools used to recover water for the environment in the Murray-Darling Basin 55 Table 4 Delivery strategies used for environmental watering in the Murray-Darling Basin 66 Figures Figure 1 Murray-Darling Basin and its rivers 10 Figure 2 Comparison between the Murray-Darling (M-D), Ganges, Indus, Mekong and Yellow River basins 12 Figure 3 Seasonal distribution of rainfall and potential evapotranspiration across the northern and southern Murray-Darling (M-D), Ganges, Indus, Mekong and Yellow River basins 13 Figure 4 Maps showing the level of catchment disturbance and flow disturbance for the Murray-Darling Basin 15 Figure 5 Broad phases of water management in the Murray-Darling Basin 17 Figure 6 Dam development and irrigation diversions in the Murray-Darling Basin 24 Figure 7 Daily salinity in the Murray River measured at Morgan 29 Figure 8 Annual inflows in the Murray-Darling Basin, 1900–2020 39 Figure 9 Projected percentage runoff declines for the Murray-Darling Basin by 2046–2075 relative to 1975–2005 39 Overview of roles and responsibilities in environmental water management Figure 10  in the Murray-Darling Basin 42 Overview of the range of environmental flow assessment methods, Figure 11  indicating where the UEA approach sits within the range 47 Overview of the method used to determine the environmentally sustainable Figure 12  level of take in the Murray-Darling Basin 49 Summary of water recovery under the Basin Plan Figure 13  53 Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin v Shift in recovering water through infrastructure projects, as opposed to buybacks 56 Figure 14  Commonwealth environmental water holdings as at 12 August 2021, Figure 15  comprising a total 2,876 GL of registered entitlements with a long-term average annual yield of 1,989 GL 57 Hierarchy of environmental objectives established for the Murray-Darling Basin 59 Figure 16  Long-term environmental watering planning architecture Figure 17  61 Interaction between strategies and annual watering priorities at the Basin Figure 18  and watering plan unit scales 63 Examples of environmental watering objectives under different planning Figure 19  scenarios, illustrating the seasonally adaptive approach to planning used in the Murray-Darling Basin 64 Figure 20 Commonwealth environmental water availability and use 65 Illustrative environmental response to Basin Plan implementation, based on a Figure 21  sequence of average years 73 Acronyms Acronyms Full term BWEWS Basin Wide Environmental Watering Strategy CAMBA China-Australia Migratory Bird Agreement CEWH Commonwealth Environmental Water Holder CEWO Commonwealth Environmental Water Office COAG Council of Australian Governments CSIRO Commonwealth Scientific and Industrial Research Organisation ESLT environmentally sustainable level of take GL gigalitre JAMBA Japan-Australia Migratory Bird Agreement mcm million cubic metre MDBA Murray-Darling Basin Authority MDBC Murray-Darling Basin Commission NCC National Competition Council NWI National Water Initiative PPM Pre-requisite Policy Measures RMC River Murray Commission RMWP River Murray Working Party ROKAMBA Republic of Korea-Australia Migratory Bird Agreement SDL sustainable diversion limit UEA umbrella environmental asset VEFMAP Victorian Environmental Flows Monitoring and Assessment Program WRP water resource plan Valuing water: The Australian perspective vi Environmental values of water in the Murray-Darling Basin Executive summary Environmental problems are not problems of our surroundings, but—in their origin and through their consequences—are thoroughly social problems, problems of the people, their history, and their living conditions, their relation to the world and reality, their social, cultural and political situations. —Ulrich Beck (1992) This case study This case study provides an overview of the Australian experience with environmental water reform, as well as a detailed account of the current management regime for environmental water in the Murray-Darling Basin (the Basin). It shows how environmental water policy in the Basin has developed in the context of the region’s unique set of social, economic, political, institutional and hydrological variables. The development of a policy framework that recognises the environment as a legitimate water user in the Basin has had to respond to major droughts, competing societal interests, a transboundary system (albeit within a single nation), political power contests and interests, and cultural groups with often divergent values. The Australian experience reinforces the importance of understanding the extent to which decisions about the use and control of freshwater systems and catchment landscapes are inherently social, cultural and political (Hanemann & Young, 2020; Frederiksen, 1992; Molle, 2009; Mollinga, 2008; WBG, 2018). Water policy mobilises a wide range of actors with the potential for coordinated collective action or persistent partisan contests over deciding ‘who gets what, when, how’ (Lasswell, 1936) in the allocation of access to, and control over, freshwater systems and catchments. The development and implementation of environmental water policy is no exception. Like other water policy challenges, it is as much a political, social and institutional challenge as it is a technical endeavour, drawing on, for example, scientific, engineering and economic expertise. Existing political institutions, social norms, advocacy coalitions, expert knowledge, and the distribution of power between governments and civil society actors all influence the set of policy choices available to societies for addressing this issue and the way in which the choice set changes over time (Acemoğlu & Robinson, 2016; North, 1991; Sabatier, 1988). The Australian experience in the Basin does not provide a roadmap that can be easily transferred to other river basins around the world. The trajectories of countries like Australia that have successfully integrated environmental water into their policy frameworks for water use and control are highly context- specific, with their own unique sets of social, economic, political, institutional and hydrological variables (Mollinga, 2008). It is unlikely that Australia’s approach can, or should, be replicated elsewhere. However, the lessons developed from this case study highlight what can be generalised from the successes and challenges that have arisen in the management of water for the environment in the Basin. They cover three themes: • recognition and acceptance of environmental values • identifying environmental water policy options • implementing environmental water policy. Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 1 The importance of managing water for the environment Allocation and management of water for the environment is a critical policy response to ameliorating unsustainable human impacts on freshwater systems. Human activities have transformed the majority of the world’s freshwater and estuarine systems, with global water withdrawals increasing at more than twice the rate of population growth since 1800 (L’vovich et al., 1990; Smil, 2003; Vörösmarty & Sahagian, 2000). There is a longstanding and consistent link between the alteration and impairment of inland water ecosystems and economic development (Vörösmarty et al., 2010, 2013). The World Economic Forum has ranked water crises and biodiversity loss among its top five global risks (WEF, 2019). Surface water and groundwater extraction, river fragmentation and flow regulation have combined with the impacts of land-use change to significantly alter ecosystem functions and reduce biodiversity in many of the world’s major river basins, with consequent reductions in the resilience of both ecosystems and dependent social and economic systems (Falkenmark et al., 2019; Nilsson et al., 2005; Vörösmarty & Sahagian, 2000). Human population growth, water resources development, and water use to provide for increased human water security and climate change all put significant pressure on freshwater ecosystems. Humans have made significant changes to the water cycle at global and local scales by altering patterns of river discharge, flow regimes, groundwater recharge, evapotranspiration and precipitation. Climate change has begun to impact water systems and aquatic ecosystems. However, decisions on the management of more direct human impacts will remain the dominant driver of water system changes and the resilience of linked socioecological systems into the mid-21st century (Haddeland et al., 2014; Veldkamp et al., 2017). There can be considerable tension between human development and water security needs, on the one hand, and managing risks to the ecosystem services, critical habitat and biodiversity that provide livelihoods, particularly for many the world’s lowest-income people, on the other. Providing for environmental water (or environmental flows) alongside broader catchment management allows societies to balance water for human use and development with the need to sustain the essential ecosystem services freshwater systems provide. In this context, environmental water provision contributes to building a foundation for meeting the United Nations Sustainable Development Goals (Arthington et al., 2018). However, successful development and implementation of policy proposals that provide for a sustainable balance between development and freshwater ecosystem protection and restoration is a long-term process, requiring recognition of the specific constellation of interactions between hydrological, ecosystem, social, cultural and political factors in each river basin. Allocating water to the environment in Australia’s Murray-Darling Basin The Murray-Darling Basin is one of Australia’s largest catchments and Australia’s most significant agricultural region. It is a major river basin with a high level of water resources development and water extraction for consumptive use, and substantial environmental challenges. Over the past 50 years, the Australian Government and state and territory governments have identified and begun responding to the environmental challenges presented by overdevelopment of the Basin, overallocation of its water resources and extensive catchment alteration. This process has resulted in implementation of an approach to environmental water management that has reduced consumptive take of water from the Basin system and returned significant volumes of water to the environment, with social and environmental benefits at local and regional scales (PC, 2021a). Valuing water: The Australian perspective 2 Environmental values of water in the Murray-Darling Basin Australia’s major water management reforms of the past three decades have centred on the Basin. Water reform in the Basin has had to address challenges arising from more than 100 years of extensive water resources development, primarily for agricultural use, but also as an important water source for towns and cities in the Basin and adjacent regions in a highly variable climate subject to long, dry periods, as well as large floods. The policy lessons and precedents established in the Basin have had a profound effect on water policy across Australia. These lessons have been transferred to the management of other Australian catchments and regions, and have attracted international interest. Development of environmental water policy in the Basin has been shaped and constrained by the legacy of past decisions. Major shifts in public sentiment, Australian politics and approaches to policy were required for the environment to become a legitimate subject of discussion and debate in the Basin during the 1960s and 1970s. It took longer for the environment to become recognised as a legitimate water user, which did not occur until the 1990s and 2000s. Implementation of environmental water policy, which has reallocated significant quantities of water to the environment, has been marked by increasing levels of tension between water users and between Basin jurisdictions since 2010. Major changes to Australian water policy coincided with the most severe drought on record, ongoing demographic and structural changes in Australia’s agricultural sector, and significant changes in returns for a number of the major irrigated crops in the Basin. These coincident stressors helped to increase tensions, which were often expressed as antipathy to environmental water—a policy domain where agricultural water users felt they could exert pressure and effect change. Although such disputes are not unusual in subnational transboundary river basins where water governance must manage a long history of basin development and overallocation in a changing climate, these tensions highlight the extent to which valuing environmental water is a question of social and political judgment. Despite these challenges, over the past decade Australia has transferred around one-fifth of previous consumptive flows to environmental use, established the environment as a legitimate water user, and developed strong institutional arrangements to manage environmental water. Identifying and prioritising environmental values, important ecosystem services and environmental watering objectives remain contested issues in the Basin. Defining the meaning of concepts such as ‘sustainability’ and ‘protecting and restoring’ aquatic ecosystems, which underpin the legislative context for environmental water recovery in the Basin, has involved political contests over the use and control of water resources that have shaped the way environmental water policy issues are portrayed and understood (Stone, 2012). Recovering and managing water for the environment in the Basin remains a dynamic and high-profile area of public policy—each success introduces new challenges and unintended consequences, which require changes in policy and management instruments. The Australian experience in the Basin has not been a simple, linear process of clarifying values and objectives, undertaking comprehensive scientific and technical analyses, and formulating and implementing an effective and efficient policy response. Agreeing on ecological outcomes and demonstrating progress in such a highly modified system is a difficult, long-term task (Briscoe et al., 2011; Gann et al., 2019; SER, 2019). The process of developing and implementing environmental water policy in the Basin has seen both regional and sectoral political challenges, alongside periods of cooperation and ‘policy windows’ that permitted significant change. Policy development and stakeholder responses have been influenced by a range of factors, including environmental crises, major drought, international commodity cycles, regional demographic changes, and shifts in agricultural employment and production. Australia’s experience demonstrates how decisions about the use and control of freshwater systems and catchment landscapes are as much a political, social, cultural and institutional challenge as they are a scientific and technical endeavour. Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 3 Current approaches to valuing and managing water for the environment in the Murray-Darling Basin This case study outlines current approaches to identifying environmental value and measuring values, and the mechanisms and tools applied to realise the environmental value of water in the Basin. Significant financial commitments, alignment of management arrangements, and establishment of institutional structures to manage water for the environment have been important to implement the recent suite of water reforms in the Commonwealth Water Act 2007 and the Murray-Darling Basin Plan (2012). Through the combination of these commitments, the environment has been legally recognised as a legitimate water user in the Basin. While the original framework for setting an environmentally sustainable level of take and sustainable diversion limits (SDLs) for the Basin Plan emphasised the technical and scientific elements of the policy challenge, implementation has required an ongoing process of political negotiation. Trade-offs and political interventions have been a necessary part of developing the SDLs and implementing environmental water policy. The limits are a compromise that aims to offset the impacts for those negatively impacted. However, outcomes have not always been successful. The political and negotiated nature of the process has led to ongoing tensions and concerns about the legitimacy of outcomes. Approximately 20 percent of all water entitlements in the Basin available for consumptive uses such as irrigated agriculture a decade ago are now managed for the environment. The majority of water for the environment has been recovered through direct purchase of water entitlements. Additional water buybacks ended in 2020. However, an increasing focus on water recovery through investments in water infrastructure modernisation began in 2013. Environmental water entitlements have the same rights and must follow the same rules as consumptive entitlements. Environmental water entitlements in the Basin are held by an independent national institution, the Commonwealth Environmental Water Holder (CEWH), as well as by individual Basin state governments and through joint governmental agreements. The majority of the water held for the environment in the Basin is managed by the CEWH. However, not all water for the environment is ‘held’ in environmental entitlements. Environmental entitlements make up a relatively small volume of the total water available or reserved for environmental use in the Basin. Significant volumes of environmental water are managed by state governments through the rules in water resource plans. Providing environmental water in the Basin has required amendments to these plans. Several challenges remain to the attainment of water supply savings through supply and efficiency measures, and implementing the SDLs in full by 2024 is at risk. Prioritisation of environmental water use is based on principles that are common across the Basin. Annual Basin-scale priorities are published, and environmental water use must have regard to these priorities. Common Basin-wide environmental objectives are given effect in both long-term environmental watering plans and annual priorities and plans. A seasonally adaptive approach is used to prioritise environmental water use, based on climatic and ecological conditions. Environmental water can only be delivered if there is water available—the same as for other water entitlement holders. Coordination of delivery is important to realise the outcomes intended by environmental watering and remains an ongoing focus of efforts to realise broader benefits. In addition to coordination arrangements, easing of constraints on the delivery of water is required to achieve many of the water requirements for environmental values. Monitoring water use across a large river basin such as the Murray-Darling Basin requires a range of different approaches—from site monitoring to remote surveillance. Monitoring of, and accounting for, environmental water use present substantial challenges. Approaches to water delivered and returned to the river system from environmental assets are complex and highly contested. Multiple inquiries in recent years have examined specific areas of concern. These inquiries have fostered some uncertainty in the community regarding management arrangements. However, environmental watering plans, Valuing water: The Australian perspective 4 Environmental values of water in the Murray-Darling Basin priorities and delivery have been adapted based on the findings of long-term monitoring programs in the Basin. Monitoring programs in the Basin are being deployed over a long period, linked to addressing management questions and challenges, and have resulted in strong partnerships between government agencies and scientific research. These programs need adequate funding for ongoing success. Lessons based on Australia’s Murray-Darling Basin The Australian experience in the Murray-Darling Basin does not provide a roadmap for use by everyone, everywhere. However, consistent themes and lessons highlighted by the Basin experience align with many of the principles and approaches called for by international commitments (e.g. the Sustainable Development Goals), governments around the world, and large development donors such as the World Bank and the Asian Development Bank. Therefore, lessons drawn from these experiences can be taken as framing and guidance that need to be viewed through the lens of the hydrological, ecological, socioeconomic and political context of a specific basin or country. The lessons outlined in this case study include the following: • Restraining water use and recovering water for the environment are very difficult and costly once a river system has become overallocated. Where possible, early action to integrate environmental water policy into river basin development can help avoid future difficulties. • Allocating water for the environment is a social and political task, not just a technical or scientific problem. Enduring reform requires both a broad base of social and political support and agencies ready to take advantage of ‘policy windows’ when they occur. • There is no single, optimal balance between water allocations for the environment and other uses. Definitions of, and criteria for, ‘a healthy river’ and ‘sustainability’ will be contested scientifically and socially. Resolving these tensions and identifying viable environmental water policy options require building trust in and among institutions, science, technical knowledge and decision-making processes. • Strong, transparent and trusted institutions are critical for effective environmental water management. Institutions need appropriate powers, resources and independence to carry out their roles. Institutional design needs to ensure that different environmental water issues are managed at the most appropriate scale. • Environmental water management takes time, should remain adaptive and is never complete. It should be integrated into broader water and catchment management processes, and linked to other aligned policy areas and their priorities (e.g. agriculture, regional development, energy markets). • Effective environmental water management requires the integration into water agencies of cross-disciplinary professional groups with new expertise—for example, ecologists, lawyers, political scientists, economists, decision scientists, and specialists in communications, policy and engagement. This capability needs to underpin multidisciplinary and collaborative approaches built around effective working partnerships with a wide range of stakeholders. • Effective and ongoing engagement with stakeholders and communities is critical for successful design and implementation of environmental water policies. Where possible, stakeholders and communities should be directly involved in decision making and implementation, as this builds trust and long-term support. Transparent monitoring, evaluation and reporting are essential for maintaining legitimacy and trust. These processes need to be built into policy implementation and appropriately resourced. Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 5 1 Introduction Australia has longstanding experience in identifying and responding to the environmental challenges presented by the overdevelopment of a major river basin, the Murray-Darling Basin (the Basin). This experience has resulted in implementation of an approach to environmental water management that has reduced consumptive take of water from the Basin system and returned significant volumes of water to the environment. Australia’s experience has not been without difficulties or controversy. International and national assessments of Australia’s broad water reform efforts, which include valuing environmental water, have been mixed (Briscoe, 2011; Garrick et al., 2020; Grafton, 2019; Holley & Sinclair, 2018; The Economist, 2003, 2010, 2019; Walker, 2019). The development of a policy framework that recognises the environment as a legitimate water user in the Basin has had to respond to major droughts, competing societal interests, a transboundary system (albeit within a single nation), political power contests and interests, and cultural groups with often divergent values. This case study shows how environmental water policy in the Basin has developed in the context of: • the region’s unique hydrology • a settler culture and politics • decisions made from the 1880s in the development of water law and policy • a federal political system based on strong state rights to water and broader natural resource management • development of a highly regulated and overallocated river system throughout the 20th century • broader water policy reform driven by changes in policy, public opinion and institutional design over the past 50 years. Australia’s experience with environmental water policy in the Basin demonstrates that there is no single, ideal pathway towards integrating environmental considerations into water management frameworks and decisions. The trajectories of countries like Australia that have successfully integrated environmental water into their policy frameworks for water use and control are highly situation-specific, each with a unique set of social, economic, political, institutional and hydrological variables (Mollinga, 2008). It is unlikely that Australia’s approach can, or should, be replicated elsewhere. Change in water policy in the Basin to include environmental considerations has not been a simple linear process and is unlikely to ever be complete. It is a relatively new endeavour, and remains a dynamic and high-profile area of public policy—each success introduces new challenges and unintended consequences, which require changes in policy and management instruments (Briscoe et al., 2011; Matthews, 2018). 1.1 About this case study This case study provides an overview of the Australian experience with environmental water reform, and a detailed account of the current management regime for environmental water in the Murray-Darling Basin. A detailed set of lessons is provided in the last section. Central to these lessons is the realisation that valuing water for the environment is as much a social and political exercise as it is a scientific and technical one. Valuing environmental water, and planning for its management and delivery must be informed by evidence gained from extensive technical and scientific work. It must also often resolve difficult values-based and political controversies that surround provision of water to the environment in large river basins. This requires the integration of technical analyses with strategies designed to navigate disagreements between political actors, jurisdictions and stakeholder groups. Valuing water: The Australian perspective 6 Environmental values of water in the Murray-Darling Basin The case study is structured in the following sections: • Section 1. Introduction—provides an overview of the purpose and potential application of the case study • Section 2. Overview of the Murray-Darling Basin— provides an overview of the geographical context of the Basin, including the environmental values and key factors that influence the condition of values • Section 3. History of water management in the Murray-Darling Basin—describes phases in water resource development, and events that have influenced the way that water is valued for the environment in the Basin • Section 4. Current approaches to valuing water for the environment in the Murray-Darling Basin— discusses the current approaches to recognition and acceptance of environmental values, approaches to measuring values, and mechanisms and tools applied to realise the environmental value of water in the Basin; highlights areas of success, challenge and ongoing concern • Section 5. Lessons based on Australia’s Murray-Darling Basin experience—summarises general lessons for framing and guidance; these need to be viewed through the lens of the socioeconomic and political context of a specific basin or country. A note regarding definitions and terminology Development and implementation of environmental water policy are embedded in specific histories and geographies, processes of problem perception and definition (see Box 1.1), shifts in elite and public opinion, definitions of valid knowledge and evidence, tensions over areas of government and community power and control, and struggles over institutional and policy change (Sabatier, 1988). Defining terms such as ‘levels necessary to sustain’ and ‘sustainable compromises between river condition and human use’ is a difficult challenge, often involving deeply political decisions and tensions between social groups with very different values. Each of these terms hides complex interactions between ecosystems and human activities working at multiple spatial and temporal scales (Lockie, 2019). Although science can inform these decisions, it cannot make them. There is no easy way to translate these concepts or the results of scientific studies simply, in a value-neutral way, into policy (Briscoe et al., 2011). Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 7 Box 1: Some terms related to providing water for the environment Environmental flows: defined by the Brisbane Declaration (2018 update) as describing the quantity, timing and quality of freshwater flows and levels necessary to sustain aquatic ecosystems, which support human cultures, economies, sustainable livelihoods and wellbeing (Arthington et al., 2018). Environmental water: commonly used in South Africa and Australia, this term refers to water managed to deliver specific ecological outcomes or benefits. It may refer to specific water allocations or releases made for ecological purposes (WBG, 2018). Healthy working river: a river that is managed to provide a sustainable compromise between the condition of the river and the level of human use. A water regime based on the healthy working river approach would not return an aquatic system to pristine condition, but it would sustain ecological objectives indefinitely (NCC, 2004). In-stream flow requirements: an older term, rarely used now, that originally addressed flows for maintaining fish habitat. The focus was on low flows in the wetted channel, and typically did not consider riparian zones, floodplains, water quality, geomorphology, other biota, floods greater than the annual one or social aspects (WBG, 2018). Minimum flow: a general term mainly used to describe a flow that must be maintained without further reduction over a specified period—generally either during the dry season or over the whole year. It implies that ecosystem functioning can be protected through the delivery of a minimum and constant flow; however, evidence shows that variability of flows within and between years is essential to maintain healthy rivers (WBG, 2018). Downstream flow: the final flow regime once environmental flows and flows for other water demands, such as irrigation and hydropower generation, have been combined (WBG, 2018). Valuing water: The Australian perspective 8 Environmental values of water in the Murray-Darling Basin 2 Overview of the Murray-Darling Basin 2.1 Introduction The Murray-Darling Basin is one of Australia’s largest catchments and Australia’s most significant agricultural region. It is also the river basin with the most extensive water use and greatest environmental challenges. Australia’s major water management reforms of the past three decades have centred on the Basin and the challenges arising from more than 100 years of extensive water resources development, primarily for agricultural use, in a highly variable climate subject to long, dry periods and large floods. The policy lessons and precedents established in the Basin have had a profound effect on water policy across Australia, and have often been transferred to the management of other Australian catchments and regions. This section provides an introduction to water governance in the Basin, the hydrological system, and the region’s population and industries. These issues provide context and have influenced the development of environmental water policy in the Basin. 2.2 Governance The Murray-Darling Basin is a transboundary system with responsibility for water resource policy, planning and management shared between the Queensland, New South Wales, Victorian, South Australian, Australian Capital Territory and Australian governments.1 Australia is a federation of six states and two territories, with powers distributed between the Australian Government and the governments of each state and territory.2 States have primary responsibility for managing natural resources, including water, within their jurisdictional geographic boundaries, and each state and territory has its own water laws and regulations (Gardner et al., 2018). Indeed, Australian states retain plenary legislative power to make law for natural resources management, and the Australian constitution explicitly limits the Australian Government’s powers with regard to water resources.3 As a consequence, the Australian Government has historically sought to exercise influence in the Basin by encouraging cooperation among the Basin states. This has included deploying its financial resources through strategic investment decisions, relying on the states to legislate in a way that is consistent with agreed policy, and working with the states to agree to enact parallel legislation (Gardner et al., 2018). The Murray-Darling Basin Agreement is one of Australia’s longest-standing interstate compacts, originally agreed in 1914 as the River Murray Waters Agreement, which relied on such cooperation (Guest, 2017). Major water reforms over the past 30 years have provided the Australian Government with a more active role in the management of the Basin’s waters. In 2008, the states referred some of their water resource management powers to the Australian Government. These referrals allowed the Australian Government to define economic and environmental constraints to the states’ water resources management powers. Management of the Basin’s water resources is now shared between the Australian Government and state governments, with states maintaining responsibility for most land and water management in the context of a higher-order, Basin-scale framework agreed with the Australian Government and other states (Gardner et al., 2018). Debate continues about the effectiveness of these arrangements (PC, 2020; Walker, 2019). In this document, ‘Basin states’ includes the Australian Capital Territory. 1  The states have their own constitutions, parliaments, governments and laws. The self-governing territories also have their own parliaments, 2  governments and laws. However, the Australian constitution empowers the Australian Parliament to make laws for the territories; it does not have this power in relation to the states (Attorney-General’s Department & Australian Government Solicitor, 2012). The Australian constitution provides the Australian Government with the power to provide financial assistance to the states contingent on 3  the states meeting specific conditions (s 96). Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 9 In a global context, the Basin has a comparatively sophisticated water resources management system, the result of more than 30 years of reform built on precursors that date back to the late 19th century. The current water governance and management framework is a complex and sometimes unwieldy mix of state-administered and nationally administered collaborative planning, market-based instruments and direct regulation (Alexandra, 2019; Doolan, 2016). Water for irrigation and the environment is managed by Australian and state government institutions within a framework structured around quantified property rights framed as a share of available water (not an absolute amount), volumetric accounting for water use, definitive registers of rights ownership, and trading within sophisticated water markets (Hanemann & Young, 2020). 2.3 The Murray-Darling system The Basin ranks among the 20 largest river basins in the world, measured by river length and catchment area. Located in southeastern Australia, it drains roughly one-seventh of the Australian continental mainland (a little over 1 million km2) and stretches south from Queensland, through New South Wales, the Australian Capital Territory and Victoria, and then west to the coast in South Australia where it flows into the Southern Ocean (see Figure 1). Rivers from 23 catchments feed the Murray and the Darling—the Basin’s two major rivers. The Murray River rises in both New South Wales and Victoria, and runs west along the border of the two states. The Darling River runs south from Queensland and through New South Wales. The rivers meet in Wentworth before continuing to the ocean in South Australia. By area, the Basin is around 1.25 times the size of the Mekong River Basin or the Yellow River Basin (see Figure 2). Figure 1. Murray-Darling Basin and its rivers (Sources: BoM, 2021; Sumner et al., 2021. Figure by R. Marsh) Valuing water: The Australian perspective 10 Environmental values of water in the Murray-Darling Basin The Basin is unlike many other large river–catchment–estuarine–coastal systems. The system combines a large catchment with a relatively small coastal lagoon system and low coastal discharge (Hart et al., 2021). Although the Basin ranks among the 20 largest river basins in the world measured by river length and catchment area, its long-term average annual streamflow is the lowest of all major river systems on Earth (State of the Environment Advisory Council, 1996). However, averages provide a poor representation of the Basin’s streamflow patterns, which vary substantially across timescales from seasons to decades. The Basin has the highest variability and unpredictability in interannual flows among the world’s large river systems (McMahon et al., 1992). Total annual streamflows in modern records range from 6,740 million cubic metres (mcm) (in 2006) to 117,907 mcm (in 1956) (MDBA, 2010). Multiyear low-rainfall, low-flow and cease-to-flow periods are a regular feature of the Basin’s hydrology, visible in both the modern and paleoclimatic records (Freund et al., 2017; McMahon & Finlayson, 2003). Consequently, only one-fifth of the Basin’s total river length is classified as having permanent flows— a number of the Basin’s rivers also cease to flow during extended low-rainfall periods (Bond et al., 2020). Hydrological connectivity between the Basin’s rivers is consequently highly variable, with a number of rivers terminating in floodplain wetlands and only contributing flows to the wider system during very large floods (CSIRO, 2008). The Basin’s highly variable interannual rainfall patterns are strongly influenced by the El Niño–Southern Oscillation (ENSO), particularly variation in winter, spring and summer rainfall. ENSO effects further magnify fluctuations in streamflow volume (Chiew et al., 1998; Gallant et al., 2012). The Indian Ocean Dipole, other Indian Ocean sea surface temperature anomalies, and variations in the Southern Annular Mode also influence the Basin’s hydroclimate (Gallant et al., 2012). Significant regional variation is seen across the Basin in annual and seasonal streamflow patterns. The Basin is usually described with reference to the differences in hydrological characteristics between the north and the south. The northern Basin, located in Queensland and northern New South Wales, includes the Darling River north of Menindee and its tributaries. Streamflows tend to be lower in the north than in the south. Driven by summer monsoonal rainfall, the streamflows in the northern Basin vary between 0.01 and 10 times the long-run average. The southern Basin, in southern New South Wales, the Australian Capital Territory, Victoria and South Australia, includes the Murray River and its tributaries in New South Wales and Victoria; the Darling River south of Menindee; the Goulburn, Broken, Campaspe and Loddon rivers; the Murrumbidgee River; and the Lachlan River. Flows in the south vary around 0.3 to 3 times the long-run average and are dominated by late-winter and spring rainfall (Gawne et al., 2020, see Figure 3). There are also marked east–west variations in the Basin. Average annual rainfall in some eastern Basin catchments is 5 times that of catchments in the arid and semi-arid west. Evaporation averaged across the Basin is approximately 4 times annual average rainfall; regional variation in evaporation ranges from slightly below average annual rainfall in the southeast to 8 times average annual rainfall in the west (Gallant et al., 2012). The climate of the Basin ranges from subtropical in the north to semi-arid in the west and temperate in the south. Although the Basin exhibits a diversity of geographical features and climates—from the Great Dividing Range, which rises more than 2,000 m above sea level in the east and south to the wide plains of the west—it is dominated by low-gradient arid to semi-arid plains (Geoscience Australia, 2012). Most of the Basin is less than 200 m above sea level, and 90 percent is arid or semi-arid (Maheshwari et al., 1995). There is a corresponding variation in ecosystems, from subtropical grasslands and rainforest in the northeast to temperate broadleaf forest and montane shrublands in the southeast, alpine heaths on the higher mountains, and temperate grasslands and Mediterranean shrublands in the west (DAWE, 2020a; Walker et al., 1993). Extensive land clearing during the past 200 years has removed more than 60 percent of the original tree cover, altering the relationship between surface water and groundwater systems, and changing the Basin’s hydroclimate (Murphy & Timbal, 2008; Walker et al., 1993). Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 11 The Basin has extensive groundwater systems. The northern Basin sits over the southern part of the Great Artesian Basin, Australia’s largest groundwater basin, which is managed through a separate interstate agreement from the Murray-Darling Basin Agreement. The remainder of the Basin consists of fractured rock aquifers in the highlands, major alluvial systems in river valleys, and riverine plains and largely saline limestone aquifers in the west. Groundwater is an important water resource for Basin agriculture and communities, particularly in the northern Basin (Stewardson et al., 2021). Around one-quarter of the water used in the Basin in 2018–19 was from groundwater systems (BoM, 2020). However, groundwater use varies markedly, depending on streamflows and available surface water allocations. Groundwater use increases in dry years that have low surface water allocations, and decreases in wet years with high surface water allocations. Area (105 km2) Variability (CV) Diversions (105 mcm yr-1) Indus M-D Indus M-D Yellow Ganges Ganges Mekong Mekong Yellow Ganges Yellow Mekong Indus M-D 0 3 6 9 0 0.2 0.4 0 1 2 Diversions/Inflows Inflows (mcm km-2 yr-1) Inflows (mcm person-1) Indus Mekong M-D Yellow Ganges Mekong M-D Indus Ganges Ganges Yellow Indus Mekong M-D Yellow 0 0.2 0.4 0.6 0.8 0 0.2 0.4 0.6 0 0.003 0.006 0.009 Inflows (10 mcm yr ) 5 -1 Population (10 ) 8 Diversions (mcm person-1) 2012-2020 1980-2006 Ganges Ganges M-D Mekong Indus Indus Indus Yellow Mekong Yellow Mekong Ganges M-D M-D Yellow 0 2 4 6 0 1 2 3 4 5 0 0.002 0.004 Note: These basin-level comparisons hide considerable regional variation and should be interpreted with caution. Variability is the coefficient of variation (CV) for total basin annual inflows. Figure 2. Comparison between the Murray-Darling (M-D), Ganges, Indus, Mekong and Yellow River basins (Sources: Data for Ganges, Indus, Mekong and Yellow River basins: Eastham et al., 2014. Data for Murray-Darling Basin: MDBA, 2020a; BoM, 2018, 2019. Figure by R. Marsh) Valuing water: The Australian perspective 12 Environmental values of water in the Murray-Darling Basin Ganges Indus Mekong 300 mm 200 100 0 Northern M-D Southern M-D Yellow 300 mm 200 100 0 ay ay ay ar v ar v ar v g g g c c c p p p b b b r r r t t t n n n n n n l l l Ap Ap Ap Oc Oc Oc No No No De De De Au Au Au Ju Ju Ju Se Se Se Fe Fe Fe Ju Ju Ju Ja Ja Ja M M M M M M Potential evapotranspiration Rainfall Note: These basin-level comparisons hide considerable regional variation and should be interpreted with caution. Figure 3. Seasonal distribution of rainfall and potential evapotranspiration across the northern and southern Murray-Darling (M-D), Ganges, Indus, Mekong and Yellow River basins (Sources: Data for Ganges, Indus, Mekong and Yellow River basins: Eastham et al, 2014. Data for Murray-Darling Basin: MDBA, 2020a; BoM, 2018, 2019. Figure by R. Marsh) 2.4 Population, major industries and water use The Murray-Darling Basin is sparsely populated. The population density of the Basin’s more than 2 million people is low, ranging from 0.1 to 3.5 people per square kilometre for the vast majority of the area outside urban centres. Australia’s national capital, Canberra, is the largest city in the Basin, with a population of less than 500,000. Half the population of the Basin live in 19 regional centres with populations over 20,000; 25 percent live in towns with populations between 5,000 and 20,000; and the remaining 25 percent live in small towns or on farms. Between 2001 and 2016, the Basin’s population grew much more slowly than that of the rest of Australia (increasing by around 2 percent compared with around 20 percent). The Basin’s population is considerably older than the rest of Australia, and the region faces ongoing migration of younger people (aged 18–40) to major coastal cities outside the Basin. Around 120,000 Aboriginal people from more than 40 Aboriginal nations live in the Basin and have done so for more than 65,000 years (Dwyer & Cheesman, 2019; Pollino et al., 2021). The Basin produces around 40 percent of Australia’s total agricultural production and nearly half of Australia’s irrigated agricultural production by value. Agriculture is the major water user in the Basin (ABS, 2019). More than 95 percent of all water diversions in the Basin are for agricultural use, and total water use in the Basin represents more than two-thirds of agricultural water use and more than half of all water use in Australia (BoM, 2019; MDBA, 2017). More than 80 percent of the land in the Basin is used for agricultural production, with around 1–2 percent irrigated, depending on the year (ABS, 2012, 2020). Livestock grazing is the predominant land use in the Basin. There are around 35,000 agricultural businesses, of which around one-quarter used irrigation in 2018–19 (ABS, 2020). Almost all of Australia’s gross value from rice, around 90 percent from cotton, 75 percent from grapes and 40 percent from fruit Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 13 and nuts is from irrigated production in the Basin. Slightly less than one-third of the gross value of dairy production in Australia is generated in the Basin, and around 80 percent of this is from irrigated dairy farms (ABS, 2019). Almost all rice production, the majority of the irrigated horticulture and most of the dairy production occurs in the more developed southern part of the Basin, where water for irrigation is more secure and reliable. Cotton is the major irrigated crop in the northern Basin, where opportunistic planting can adapt to the higher variability of the northern hydrological regime. Dryland agriculture constitutes the vast majority of the agricultural area and around 60 percent of the gross value of agricultural production in the Basin. Almost half the gross value from other cereals, slightly less than one-third from all beef production, and almost half from sheep and other livestock in Australia occurs in the Basin in dryland systems. The Basin’s rivers provide domestic and municipal water supplies for more than 3 million people because the Murray River provides water for Adelaide, a city of more than 1 million, located outside the Basin. Although the Basin was initially developed as an agricultural region, it now has a far more diverse economy. For example, the tourism and recreation sector in the Basin now makes a similar economic contribution to irrigated agriculture. Over the past 15 years, employment growth in the Basin has been strongest in the services and construction sectors, while it has declined in agriculture and manufacturing. One of the contributors to the change in agricultural employment during this period has been farm consolidation, which mirrors a broader trend across Australia (Pollino et al., 2021). 2.5 River and wetland environmental assets and their condition Despite water resources development driving major alterations to the Basin’s hydrology, the region retains many important wetland and aquatic ecological assets. Regional differences in climate, geography and flow regimes host a wide variety of aquatic, riparian and terrestrial ecosystems, which support numerous internationally and nationally significant species (Bond et al., 2020). The ecosystems of the Basin’s 23 river valleys are well attuned to its highly variable flow regime, requiring intermittent flooding and dry periods to flourish (Kingsford, 2000; Leblanc et al., 2010). Large flood events in the Basin’s wetlands support large-scale waterbird breeding events, especially of colonial nesting species, and 16 wetlands are listed under the Ramsar Convention (Leblanc et al., 2010). The most comprehensive assessment of the Basin’s river and wetland assets was the 2010 Sustainable Rivers Audit, which assessed only one of the Basin’s 23 river valleys as being in good health. Of the remainder, 1 was in moderate health, 15 were in poor health, and 6 were in very poor health (MDBA, 2012a).4 The strongest influences on the health of these systems are the overall reduction in river flows and changes to flow regimes caused by water extractions and river regulation, and catchment disturbance (Gawne et al., 2020; McMahon & Finlayson, 2003). Figure 4 shows the level of catchment and flow disturbance in the Basin after more than 150 years of water resources development and land-use change. A key objective of the Basin Plan is to ‘protect and restore’ the Basin’s water-dependent ecosystems. However, the profound changes to the landscapes and ecology of the Basin over the past 200 years and the ongoing management of flows, particularly in the southern Basin, challenge simple definitions of a restoration reference state (Gann et al., 2019). The impacts of climate change will further challenge the definition of restoration and protection objectives. Consequently, future approaches to environmental water policy in the Basin will require science and technical studies alongside extensive engagement with communities and stakeholders to agree on desired states for restoration and protection (Acreman et al., 2017). This suggests that, in future, restoration and rehabilitation will likely be best understood as requiring the design of ‘ecosystem solutions’ (Palmer et al., 2004) that sustain ‘robust, persistent and socially valued ecological characteristics in a flexible and adaptive management framework’ (Poff, 2018). This assessment was completed during the millennium drought (1997–2009), and the assessments of the health of these river valleys were 4  affected by the prolonged dry conditions. Valuing water: The Australian perspective 14 Environmental values of water in the Murray-Darling Basin Note: The red end of the colour spectrum shows the most disturbed areas and flows; the blue end of the spectrum shows the least disturbed areas and flows. Figure 4. Maps showing the level of catchment disturbance (left) and flow disturbance (right) for the Murray-Darling Basin (Sources: Stein et al., 2002, 2012, 2014) Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 15 3 History of water management in the Murray-Darling Basin 3.1 Introduction It can be safely said that when it comes to actual work on the ground, the objects of conservation are never axiomatic or obvious, but always complex and usually conflicting. —Aldo Leopold (1990) Box 2: Key points • Development of environmental water policy in the Murray-Darling Basin has been shaped and constrained by the legacy of past decisions. • Major shifts in public sentiment, Australian politics and approaches to policy were required for the environment to become a legitimate subject of discussion and debate in the Basin during the 1960s and 1970s. It took longer for the environment to become a legitimate water user— this did not occur until the 1990s and 2000s. • Implementation of environmental water policy, which has reallocated significant quantities of water to the environment, has been marked by increasing levels of tension between water users and between Basin jurisdictions since 2010. Although such disputes are not unusual in subnational transboundary river basins where water governance must manage a long history of basin development and overallocation in a changing climate, these tensions highlight the extent to which valuing environmental water is a question of social and political judgment. • Despite these challenges, over the past decade, Australia has transferred around one-fifth of previous consumptive flows to environmental use, established the environment as a legitimate water user, and developed strong institutional arrangements to manage environmental water. This section provides the background and context to development of environmental water policy in the Murray-Darling Basin. It helps explain the shape of Basin environmental water policy, and the sociopolitical conditions under which the environment became a subject of public debate and public policy, and a legitimate water user. It also highlights the social and political tensions created by the increased focus on values distinct from agricultural production (e.g. environmental, cultural) in Australian water policy. Despite the successful integration of environmental water policy into the broader management of water in the Basin, these tensions remain unresolved. Development of environmental water policy in the Basin has been shaped and constrained by the legacy of past decisions, particularly: • almost 200 years of settler modifications to the Basin’s landscapes and waters, which have substantially altered the hydrology and ecology of river systems and catchments at multiple temporal and physical scales • policy choices designed to drive patterns of human settlement and economic development in the Basin, which have created powerful political constituencies. The political economy of water reform in the Basin is difficult. Despite widespread recognition of overallocation of water resources, most of the required reduction in water use to a sustainable level fell on agricultural users, whose water use had been strongly encouraged and financed by the Australian Government and state governments for most of the 20th century (Tompson & Price, 2009) Valuing water: The Australian perspective 16 Environmental values of water in the Murray-Darling Basin • challenges inherent in integrating the management of local, regional and Basin-scale water policy in the context of a transboundary system that involves six jurisdictions (four states, one territory and the Australian Government) • longstanding legal structures (from the late 19th century) and the outcomes of a broader water policy reform process begun in the 1980s, within which the environmental water policy regime in the Basin has been built. Major shifts in public sentiment, Australian politics and approaches to policy were required for the environment to become a subject of discussion and debate in the Basin during the 1960s and 1970s. It took longer for the environment to become a legitimate water user—this did not occur until the 1990s and 2000s. The Basin states and the Australian Government pursued large-scale, centrally planned and expensive water storage and river regulation projects through the 20th century, with the process of development accelerating after World War II. A policy shift in the late 1980s focused on cost recovery for government investments and treating water as an economic good. This reduced the investment in large infrastructure projects, and drove the development of water markets and a series of other policy innovations, which helped manage the impacts of a major drought (the millennium drought of 1997–2009) on agricultural production in the Basin. Australia’s experience in managing water in the Basin has gone through a series of broad phases (Figure 5). Initial settler expansion into the Basin created major ecological impacts from overgrazing, land clearing, mining and early irrigation. The involvement of governments in water policy from the late 19th century prefigured the 20th century focus on large, state-financed infrastructure mega-projects to develop water resources and regulate the rivers of the Basin for national development. By the 1980s, environmental and economic concerns had shifted water policy towards a focus on efficiency, beginning to address the environmental impacts of Basin development, and a focus on market-based instruments as a key policy tool. Significant challenges remain in the management of environmental water in the Basin. These will require a reconciliation of ‘the acclaimed powers of market coordination with the cooperation required to build functional societies’ (Mallawaarachchi et al., 2020). Figure 5. Broad phases of water management in the Murray-Darling Basin (Source: Alluvium Consulting) Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 17 3.2 Reshaping the MDB’s lands and waters (1830–1917) Box 3: Key points • This was a decisive period, which marked a major environmental threshold change in the Basin’s environment and saw the establishment of settler water management. • Australia’s First Nations people used, modified and managed the Basin’s landscapes and freshwater systems for tens of thousands of years—their dispossession began a process of major alteration of the Basin’s hydrology, land use and ecology. • Land clearing, grazing and cropping, irrigation, goldmining, fishing and the introduction of new species by British settlers began a major transformation of the ecology and hydrology of the Basin. The extent and speed of these changes meant that, by 1900, many terrestrial and aquatic ecosystems in the Basin had been permanently changed from their pre-settlement structures and function. • Managing water conflicts associated with goldmining led state governments to regulate some water management directly. Population growth, land reform and drought further extended governments’ roles in water management. Water storage and irrigation development were seen as crucial enablers of increasing population density and agricultural productivity. • By 1917, many of the key elements were in place that would define water management in the Basin for the next 90 years and influence the future development of environmental water policy. Australia’s First Nations people used, modified and managed the Basin’s landscapes and freshwater systems for tens of thousands of years. Their dispossession began a process of major alteration of the Basin’s hydrology, land use and ecology (Humphries, 2007). First Nations people engaged in integrated land and water management practices that shaped terrestrial and aquatic ecosystems based around ‘an established body of laws that allocated rights and interests among particular people’ (Bird et al., 2008; Gammage, 2011; Gardner et al., 2018). The arrival of British settlers in the Basin in the first half of the 19th century led to the violent dispossession, displacement and depopulation of First Nations people from their lands and waters (Hunter, 2014; Weir, 2011). The replacement of Indigenous land and water management practices with settler approaches to re-engineering the landscape began a process of profound alteration to the hydrology and ecology of the Basin’s land and water systems (Gammage, 2011; Humphries, 2007). These changes were associated with land clearing, overgrazing, the introduction of new species and goldmining. The primary agricultural activity in the Basin after initial settlement was extensive livestock grazing on large leasehold properties—a boom-and-bust activity strongly affected by rainfall variability. The introduction of hoofed grazing animals in large numbers removed vegetation, compressed and hardened soils, altered runoff patterns, increased erosion and consequent sedimentation in watercourses, and caused major disturbances to riparian habitats (Gammage, 2011; Muir, 2014; Robertson & Rowling, 2000). Overgrazing, combined with the introduction of feral pests, including rabbits and foxes, led to the extinction of 24 mammal species from the northern Basin by 1900 (Lunney, 2001).5 The rapid expansion of goldmining in Victoria and New South Wales from the 1850s led to significant changes to the Basin’s water systems through the building of water storage and diversion infrastructure, mining pollution, the impacts of dredging rivers for gold, and greatly increased river sludge and sediment flows from upland gully incision, erosion and gold sluicing (Lawrence et al., 2017; O’Gorman, 2012; Rutherfurd et al., 2020). The environmental impacts of overstocking on the floodplains and wetlands of the northern Basin through the 1880s led to a 5  Royal Commission in New South Wales and the passing of land management legislation (the Western Lands Act 1901). Valuing water: The Australian perspective 18 Environmental values of water in the Murray-Darling Basin Ecological impacts rapidly accelerated from the 1860s. Graziers cleared their holdings to demonstrate development of the land, in response to land reforms that aimed to break up large landholdings, increase rural population density, and encourage a shift away from extensive grazing towards smaller grazing enterprises and cropping. Smallholders also extensively cleared land to ‘improve’ it and drained wetlands. Land clearing altered water tables and began a process of salinisation of land and watercourses that still requires management today. Fire suppression also paradoxically increased the regrowth and density of some fire-sensitive species (Lunt et al., 2006).6 Farmers began pumping water from the Murray River and its tributaries and building small tributary dams to increase access to water in dry years (Mallen-Cooper & Zampatti, 2018). By 1901, irrigation diversions, which peaked in droughts, contributed to zero-flow events in the Murray River during low-flow periods (Mallen-Cooper & Zampatti, 2018). Groundwater resources in the Basin also began to be tapped in the late 19th century (Smith, 1998). The impacts of overfishing on Murray cod were visible from the 1880s, even though the fishery had begun in 1855 (Humphries & Winemiller, 2009). The extent and speed of these changes created an ‘apocalyptic event for Australian ecosystems’ and make it likely that, by 1900, most terrestrial and aquatic ecosystems in the Basin had been permanently changed from their pre-settlement structures and functioning (Bird et al., 2012; Colloff et al., 2015; Davies & Lawrence, 2019; Lunt, 2002; Lunt & Spooner, 2005; Rutherfurd et al., 2020; Whalley et al., 2011). The extent of some of these changes was widely acknowledged by settlers and governments of the time (Gaynor, 2013). Managing water conflicts associated with goldmining led state governments to regulate some water management directly. Settler population densities were initially very low in the Basin, and a riparian rights system from British common law was used to allocate water (Gardner et al., 2018). Conflict over water in the goldfields caused the New South Wales and Victorian governments to regulate goldfields water use in the 1860s, with riparian rights remaining in other areas. A system of government-licensed water rights was established to manage competing demands for river water. These rights allocated specified quantities of water to holders, and provided for monitoring and measuring of take. Miners could transfer water rights to new claims—separating water rights from land and leading some rights holders to sell water to other miners (a practice government tried to end with regulation) (O’Gorman, 2012). This early system of water rights framed water as a public asset managed by governments, which controlled access and provided security to holders. However, the volumes allocated in this early rights regime did not vary with available water and often could not be fulfilled in dry years, spurring calls for improved knowledge of river flows (O’Gorman, 2012). Population growth, land reform and drought further extended governments’ role in water management. Water storage and irrigation development were seen as crucial enablers of increasing population density and agricultural productivity.7 The gold rush caused a major population shock in Victoria and New South Wales—Victoria’s population grew from around 76,000 to 540,000 between 1850 and 1860 (Sinclair, 2017). Land reforms in the 1860s combined with the introduction of universal male suffrage in the late 1850s to make a growing population of smallholding farmers an influential political force in Basin states. Smallholders were keenly aware that access to water was a limiting factor for their enterprises, and the riparian rights regime made any investment in even limited irrigation infrastructure risky (Harris, 2008). In a pattern that would be repeated in the 20th and 21st centuries, severe droughts (1877–1881, 1895–1902) helped focus political attention on water, and provoked government commissions of inquiry into water supply in New South Wales, Victoria and South Australia (IRC, 1902). Despite expert advice urging caution with regard to the development of irrigated agriculture There is considerable debate about the extent and density of pre-settlement tree cover in southeastern Australia. Indigenous landscape 6  management through altered fire regimes created a mosaic of forested and grassland areas. The dispossession of Australia’s First Nations people and the cessation of their approach to land management caused major changes to tree stand structure. Walker’s (1993) estimate of the removal of 6.3 billion trees in the Basin has been more recently recalibrated to 1–3 billion trees (Lunt et al., 2006). However, the profound and rapid changes to landscapes and water systems caused by British settlement are not debated. The Victorian Water Act 1905 was described by the Victorian Minister for Water Supply as the ‘handmaiden’ to the Closer Settlement Act 7  1904 (Davis, 1968). Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 19 in the Basin, farmer and irrigation leagues, working with trade unions, successfully lobbied for change (Black & Gordon, 1882; Harris, 2008). From the 1880s, Basin state governments legislated to take over all rights to the use, flow and control of water in rivers and lakes, and established water licensing schemes and irrigation districts.8 Governments issued water licences, which were tied to the land on which the water would be used, to reduce the potential for speculation (NWC, 2011). By 1896, nearly 500 km2 had been irrigated in Victoria (Davis, 1968). The financial failure of private irrigation trusts and the failure of extensive grazing during the droughts of the late 1800s drove state interest in major investments in river regulation and development, as well as considerable state support for settlement programs in a process described as ‘colonial socialism’ (Boon, 2020; Butlin, 1959). New state government agencies were created in the early 20th century—the Victorian State Rivers and Water Supply Commission (1906) and the New South Wales Water Conservation and Irrigation Commission (1912). These agencies took over planning, establishment, construction, operation and management of storage and canal infrastructure, and irrigation areas— controlling financing, land tenure, and land and water use. Water rights were explicitly tied to landholdings, and compulsory volumetric charges were levied on allocated water (Davis, 1968; Gardner et al., 2018). Goulburn Weir (25 mcm, 1890) and Waranga Dam (411 mcm, 1905) in Victoria were completed during this period (ANCOLD, 2010). Following Australia’s federation in 1901, the South Australian, New South Wales, Victorian and Australian governments agreed to work together on managing and developing the Murray River. Federation occurred during a severe drought (1895–1902), and transboundary conflicts over waters of the Murray River marked the process leading to federation (Guest, 2017).9 South Australia wanted to maintain flows, build locks for river transport and develop irrigation areas, whereas Victoria and New South Wales were primarily interested in building storage and other infrastructure to promote irrigation development (IRC, 1902; MRMCL, 1902). Irrigation interests convened a conference at Corowa in 1902 to call for major government investment in building storages to stop ‘river waters … running in waste to the ocean’ and ‘lay up great stores of water during times of plenty, and in the times of scarcity expend it in perennial distribution’ (MRMCL, 1902). The conference brought together representatives of the Australian Government and Basin state governments (without Queensland, which was not involved in Basin politics at this stage). It led to the Victorian, New South Wales and South Australian governments committing to a joint inquiry into how best to develop and allocate ‘the waters of the Murray River Basin’ (MRMCL, 1902). Twelve years of negotiation and four failed attempts led to the signing of the River Murray Waters Agreement in 1914 by the three southern Basin states and the Australian Government. Final agreement was reached during another drought—during which the Murray River ceased to flow at Swan Hill—after the Australian Government committed substantial additional funding to river development (Guest, 2017; Mallen-Cooper & Zampatti, 2018). The agreement remains in place after 15 iterations—it is now called the Murray-Darling Basin Agreement—with the basic water-sharing arrangements unchanged. The key elements of the agreement were: • a water-sharing agreement between the states, which included – defined proportional water shares between the states during droughts – a volumetric entitlement to South Australia to meet navigation requirements – water shares between Victoria and New South Wales for the Murray River, and autonomy in the development and use of tributaries Key legislation was passed in Victoria in 1886 and 1905, in New South Wales in 1896 and 1912, in Queensland in 1910, and in South Australia 8  in 1919. Sections 98 and 100 of the Australian constitution reflect these conflicts. 9  Valuing water: The Australian perspective 20 Environmental values of water in the Murray-Darling Basin • a construction program for weirs, locks and dams to regulate the river and increase storage for irrigation, with cost-sharing principles (including an Australian Government contribution) • creation of an intergovernmental body to administer the agreement, the River Murray Commission, comprising representatives from the states and chaired by the Australian Government (Guest, 2017). The River Murray Commission was a weak institution for management of a transboundary system. Established in 1917, the commission had no regulatory functions, no sanction powers and no ability to interfere in state affairs (e.g. catchment land-use decisions). Decisions could only be made by consensus. Despite the recommendation of the joint inquiry that the Murray River and ‘its tributaries must be looked on as one’ (IRC, 1902), the agreement was limited to the Murray River main stream. By 1917, many of the key elements that would define water management in the Basin for the next 90 years and influence the future development of environmental water policy were in place. These included: • broad acceptance of water framed as a public asset managed by governments, which should control the development of water resources and access to water rights • drought as a major driver of water policy change and human environmental impact • widely shared assumptions that – water not put to productive, agricultural use was ‘wasted’ – the Basin’s landscapes and rivers needed to be re-engineered, or ‘improved’, to increase agricultural productivity and support a growing population – increasing the population density of the Basin by state-sponsored development of irrigated agriculture infrastructure was in the national interest – given the Basin’s highly variable hydrology, a comprehensive program of river regulation and the building of water storage and delivery infrastructure was the only way to ‘drought-proof’ the region and achieve these development goals • a politically powerful agricultural sector reliant on government financial and regulatory power for its development • a strongly defended state view that coordinating bodies at a Basin scale should be subordinate to independent state land and water policy • cycles of tensions and cooperation between the states, with the Australian Government playing a mediating, rather than decision-making role, often using its financial clout to broker agreement • an understanding of the value of ensuring that agreements for the allocation of water be proportional, not absolute, given the Basin’s highly variable hydrology. The next 60 years would see the practical implementation and extension of these institutions and ideas. Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 21 3.3 Build and supply, regulating the rivers (1918–1979) Box 4: Key points • Following World War I, the period from 1918 to 1945 saw the initiation of plans for river basin development and closer settlement, as first articulated before federation. • Regulation of the rivers of the Basin accelerated after the end of World War II as post-war reconstruction focused on building public works, including irrigation infrastructure and major dams for storage and hydroelectricity. • Governments financed the development of water resource infrastructure in the Basin during this period. • By 1980, all the major dams, locks, weirs, channels and levees in the Basin were complete, and the southern Basin contained some of the most extensively engineered rivers in the world. • The re-engineering of the Basin’s rivers, particularly in the southern Basin, provided a second major pulse of environmental impacts, which compounded those of the 19th century. Following World War I, the period from 1918 to 1945 saw the initiation of plans for river basin development and closer settlement first articulated before federation. By the 1920s, policy makers were referring to ‘the doctrine of development before settlement’, which meant that infrastructure development in the Basin, primarily in the form of irrigation infrastructure, played a critical role in increasing settler population densities, and the modernisation and improvement of the region (Muir, 2014). Continuing from late-19th century ideas, this doctrine included a focus on the ‘civilising’ project of creating a growing class of smallholding farmers. Closer settlement was also seen as a means to fully occupy the Australian interior as a matter of national security—to secure food production and guard against invasion. Returned soldiers were granted land across Australia after both world wars. Many of these new allocations were in newly established irrigation developments in the Basin. Most soldier settlers had little agricultural training or capital, and soldier settlement programs were not successful, with many soldier settlers simply abandoning their land (Smith, 1998). Central to the joint state government and Australian Government development plans for the Basin was the Upper Murray Storage at the confluence of the Murray and Mitta Mitta rivers, later known as the Hume Dam. The Great Depression reduced government budgets, and building proceeded slowly. The storage was initially designed with a capacity of 1,233 mcm, and governments agreed to raise capacity to 2,500 mcm in 1926, but the dam was completed in 1936 at 1,500 mcm (Guest, 2017). Despite the Depression, around 20 percent of the final storage capacity in large dams in the Basin was built during this period. In addition to the Hume Dam, construction included: • Burrinjuck Dam (1,026 mcm, 1928) and Yarrawonga Weir (117 mcm, 1939) • 10 locks and weirs on the Murray River, from Wentworth downstream (completed between 1922 and 1935) • enlargements to Lake Victoria off the main Murray River channel near the South Australian border • five barrages at the Murray mouth to help manage salinity in the lower Murray River (1940) (ANCOLD, 2010; Connell, 2007; Guest, 2017). Valuing water: The Australian perspective 22 Environmental values of water in the Murray-Darling Basin Regulation of the rivers of the Basin accelerated after World War II as post-water reconstruction focused on building public works, including irrigation infrastructure and major dams for storage and hydroelectricity. Keynesian fiscal policy that aimed to drive full employment, a central planning policy approach, and a modernist confidence in the capacity for science and technology to ‘harness’ and control Australia’s rivers and moderate the high variability in streamflow characteristic of the Basin initiated a major infrastructure building program in the Basin (Australian Parliament, 1945; Darian-Smith, 2013; Guest, 2017). Almost 80 percent of the public storage capacity in the Basin was built between 1945 and 1979 (ANCOLD, 2010; see Figure 6). Seven dams with reservoir capacities of more than 1,000 mcm were built in the Basin during this period, as well as more than 30 other dams with volumes over 100 mcm, and the capacity of the Hume Dam was almost doubled. The Snowy Mountains Scheme with its 16 dams and 5 hydroelectric power stations was part of this accelerated building phase (Darian-Smith, 2013). The scheme redirects waters from the Snowy River catchment (originally not part of the Murray-Darling Basin) for irrigation from the Murrumbidgee and Murray rivers. The majority of these dams were built in the wetter eastern catchments, and the southern Basin was more comprehensively developed than the north (see Figure 6). The Basin’s highly variable flows meant that these dams tended to be larger than dams built elsewhere in the world, with (McMahon & Petheram, 2020): • larger reservoirs and spillway capacities (for a given catchment area) • higher dam walls (for a given capacity) • higher levels of river regulation. Although estimates vary, water storages in Australia need to be roughly twice the size of storages in the rest of the world to deliver the same average reliability, with consequential economic and environmental impacts (Smith, 1998). Hundreds of kilometres of levees were also constructed to channel the rivers of the Basin and limit overflow onto floodplains. Continuing the doctrine of development before settlement, governments aimed to both provide a more reliable water supply for existing towns and irrigation districts, and induce water demand by substantially augmenting storages and further regulating the Basin’s rivers to drive further irrigated agricultural developments and consequent population growth (Boon, 2020; Raggett, 1964). Governments financed the development of water resource infrastructure in the Basin during this period. Basin governments assumed that their financial support for building engineering works to drought- and flood-proof the region to support the growth of irrigated agriculture and associated rural populations was a self-evident investment that would build state and national wealth (Guest, 2017; Smith, 1998). Rhetoric linking river regulation to national development regularly appeared in the popular press and political speeches (Boon, 2020). Despite frequent cost overruns and overly optimistic assumptions about benefits, there was broad community support for this approach to water resources development, particularly during the first half of this period (Boon, 2020; Petheram & McMahon, 2019). The role of governments during this period was to provide ‘maximum supplies with minimum waste’ in the context of a dominant view that ‘water has no intrinsic value—it derives value only by virtue of use’ (Linsley, 1964; WCIC, 1971). As in many other parts of the world, dam building and river regulation were managed by civil engineers in large state bureaucracies, and funded by both the Australian and state governments (Molle et al., 2009). Faith in the technical potential to re-engineer the Basin to deliver secure water for agricultural growth was high during this period, with the Secretary (chief executive) of the Commonwealth Department for National Development advocating that nuclear explosives be assessed for ‘en masse dam construction or the excavation of deep cavities with relatively small surface areas to serve as large efficient storages in high evaporation areas’ (Raggett, 1964). Growth in agricultural production and closer settlement were nation-building tasks, and there was a strong community view that farmers were entitled to government investment in infrastructure to re-engineer Australia’s environment to make Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 23 it suitable for a style of agriculture able to produce commodities for international markets and food security at home (Boon, 2020; Powell, 2000). Without the subsidy from state-funded infrastructure expansion, much irrigated agriculture would not have been financially viable (Davidson, 1981; Rutherford, 1968). This approach to development created politically powerful bureaucratic and rural agricultural constituencies that were dependent on river regulation and the expansion of agricultural water allocation. Figure 6. Dam development and irrigation diversions in the Murray-Darling Basin (Source: Data from Geoscience Australia, 2004; McMahon & Petheram, 2020; MDBA, 2020a; Vivès & Jones, 2005. Figure by R. Marsh) State-sponsored development of the rivers of the Basin was also driven by a set of social engineering goals. Governments approached irrigation development as a policy tool for increasing Australia’s population, as well as for the moral improvement of Australian citizens through hard work and the re-engineering of the lands and waters of the Basin (Haigh, 1964; Muir, 2014). Given ‘Australia’s principal requirement is more people, for whom we require more jobs’, governments saw irrigation development as a priority because it provides ‘work during the construction phase, but also … much greater employment on completion of the works’. The intensive land use possible under irrigation was viewed as a means to supporting ‘a high level of local facilities, amenities, and secondary activities. This increases and retains Valuing water: The Australian perspective 24 Environmental values of water in the Murray-Darling Basin population in rural areas’ (Haigh, 1964). Government-sponsored activities such as the 1929 national ‘Grow More Wheat’ year, promoted as a way of improving Australia’s balance of payments, helped embed an agrarian rhetoric into Australian politics (Robin, 2007). Government pamphlets promised young immigrants that ‘life on the land makes a man of you’ (Muir, 2014). Public support for ‘battlers on the land’ underpinned a view that agriculture should be actively supported by public policy and public finance, made a unique contribution to national wealth and formed a critical part of the national character. Elements of this agrarian sentiment remain strong in Australia, despite the nation’s very high levels of urbanisation (Berry et al., 2016; Botterill, 2016). By 1980, all the major dams, locks, weirs, channels and levees in the Basin were complete, and the southern Basin contained some of the most extensively engineered rivers in the world (Briscoe et al., 2010). This marked the end of the period of major water resources development in the Basin. Agriculture’s contribution to Australian gross domestic product began to fall sharply in the 1960s from its 100-year trend of 20–30 percent as the proportion of services increased (Anderson, 2017). At the same time, concerns about the economic value of large dams, irrigation and river regulation were being raised (Davidson, 1969). The 1980s brought a growing fiscal conservatism, a reduction in governments’ direct involvement in economic activities and a public policy focus on the principles of cost recovery from beneficiaries. The 1980s also brought more rigorous cost–benefit analysis of major expenditure decisions as economists and policy experts took leadership roles in water agencies, previously dominated by engineers. These changes combined with growing public concern about the environmental impacts of river regulation and storage development to halt further expansion in the Basin (Crase, 2009; Smith, 1998). By this time, it is also likely that the Basin was ‘overbuilt’—induced demand for water from irrigation infrastructure expansion could now outstrip supply, and new demands for water could not be met without compromising the security of supply for existing users (Hanemann & Young, 2020; Molle, 2008; Walker, 1985). A development strategy premised on demand creation could now create water scarcity through the overcommitment of water resources—a risk noted by Basin engineers as early as the 1950s (O’Gorman, 2012). In addition, this period of extensive storage development, river regulation and irrigation expansion occurred during a comparatively wet climate period (see Figure 7). The shift to a dry climate regime in the Basin and the millennium drought (1997–2009) would necessitate major shifts in water policy. The re-engineering of the Basin’s rivers, particularly in the southern Basin, provided a second major pulse of environmental impacts, which compounded those of the 19th century. River regulation and irrigation diversions have had widely varying impacts across the Basin. They have reduced overall flows, as well as driving substantial changes in flow seasonality and flow variability. Regulation has replaced natural flow regimes with an artificial distribution of flows, changing both flooding and low-flow periods (McMahon & Finlayson, 2003). It has reduced average annual floods by more than 50 percent, which, combined with levee building, has separated large sections of floodplain from the river. This has greatly altered the structure, species composition and functions of floodplain and aquatic ecosystems that depend on intermittent connection to the river (Kingsford, 2000; Steinfeld & Kingsford, 2013). Large floods are less affected by river regulation. However, the reduction of more frequent small flood pulses increases the build-up of plant litter on the floodplain and the risk of hypoxic blackwater events following large floods (Whitworth et al., 2012). 10 ‘Between floods and during droughts, dead leaves and other plant matter build up on the ground instead of being washed into the river. 10  Bacteria begin to break the plant matter down. When significant rain finally comes, the build-up of dead and decaying plant matter is carried by rain and floodwater into the river. Once in the water, bacteria continue to break down the leaves and other plant matter. This process uses up a lot of the oxygen in the water, so there is less oxygen for fish and other aquatic organisms to breathe. The decaying matter releases carbon that makes the water look black, giving these events the name “blackwater”’ (MDBA, 2020b). Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 25 Reversal of seasonal flow patterns is now common in the rivers of the Basin where irrigation storage dams, located upstream of irrigation areas, release water during periods of high irrigation demand, which correspond with previous natural low-flow periods. In other areas, water is diverted out of catchments, leading to mean annual flow reductions of up to 95 percent of natural flows (McMahon & Finlayson, 2003). Cease-to-flow conditions were unusual at the Murray mouth before development, occurring less than 1 percent of the time; by 2000, they were occurring 40 percent of the time (CSIRO, 2008). Sediment flows have increased from bank erosion during summer irrigation periods, increasing turbidity. Together with high nutrient inputs from catchments, this increases the risk of algal blooms, particularly during periods of low flow and high temperatures (Rutherfurd et al., 2020; Walker & Prosser, 2021). The construction of more than 10,000 dams, weirs and other in-stream barriers in the Basin has had substantial impacts on fish movement and access to spawning, nursery and feeding habitats, with consequent declines in fish populations (Baumgartner et al., 2014). River operations have also affected fish habitat and breeding through thermal pollution from cold water releases from the base of dams. Flow regulation favours generalist fish species, and the introduction of the invasive European carp during this period magnified the impacts on native fish populations (Driver et al., 2005; Haynes et al., 2009). The pulse of ecological changes from dam building and river regulation was dramatic and sudden. The scale of these changes is likely to have been faster and larger than the projected impacts of climate change for the 21st century (McMahon & Finlayson, 2003; pers. comm., 2021). 3.4 Environmental challenges demand a response (1973–2007) Box 5: Key points • Salinity increases and water scarcity in the Murray River, which emerged as significant issues in the late 1960s, made some of the environmental impacts of river regulation visible, revealed weaknesses in the existing institutional structures for managing the Basin, and catalysed a reconsideration of the objectives of water management. • By the 1970s, the environmental impacts of water resources development and the need for preservation of environmental assets in the Basin were being noted as public policy issues. • Although measures were taken to address salinity, it would take compelling evidence of the deterioration of river health during the 1990s for substantial commitments to be made to improve environmental management in the Basin. • A ‘cap’ on diversions was introduced in 1995, but practical implementation of the cap across the Basin was slow and uneven, and remained incomplete in 2004. • In parallel, the Australian Government attempted to use its financial resources to drive environmental water reform. Despite the money at stake for state governments, the pace of environmental water reform remained slow, and in some catchments non-existent. • The slow pace of change and the failure to meet the goals of the reform program led to a new Council of Australian Governments water reform agreement in 2004—the National Water Initiative. However, water resources in the Basin remained overallocated and environmental conditions poor, despite 20 years of reform and more than 30 years since the need to address environmental damage in the Basin was recognised by governments. Valuing water: The Australian perspective 26 Environmental values of water in the Murray-Darling Basin By the 1970s, the environmental impacts of water resources development and the need for preservation of environmental assets in the Basin were being noted as public policy issues. The Australian Government’s 1973 National approach to water resources management emphasised the need to assess water resources projects against economic, social, regional development and environmental outcomes. It acknowledged the ecological impacts of water resources development and the importance of understanding the ‘interdependence of the elements of the whole environment’ in water management decisions, and maintaining ‘an adequate sample of undisturbed aquatic environments ... and the preservation of wetlands for the benefit of native wildlife’ (Australian Parliament, 1973). The 1975 Australian National Water Resources Assessment reiterated these policy goals and highlighted a turn away from simply managing water resources for consumptive use towards an approach that emphasised a balance of social, economic and environmental values, as well as intergenerational equity (AWRC, 1975).11 These developments paralleled the emergence of a mass environmental movement in Australia in the 1960s and the impacts of salinity in the Murray River (Connell, 2007; Hutton & Connors, 1999). However, major policy change to directly address the environmental impacts of Basin water resources development would not be implemented until the mid-1990s. Environmental impacts of development were not yet as severe as they would become—the last major dam in the Basin, Dartmouth Dam, was not completed until 1979, and irrigation diversions in the late 1960s were around 60 percent of what they would be in the mid-1990s. 3.4.1 Increasing awareness of the environmental impacts of development and manage- ment challenges Salinity increases in the Murray River emerged as a significant issue in the late 1960s. This made some of the environmental impacts of river regulation visible, revealed weaknesses in the existing institutional structures for managing the Basin, and catalysed a reconsideration of the objectives of water management. Basin landscapes are naturally saline, and highly saline groundwater underlies much of the Basin. Clearance of native vegetation and irrigation development mobilised this salt to the land surface, and into rivers and wetlands (Walker & Prosser, 2021). The 1965–1968 drought increased irrigation diversions and reduced flows in the Murray. Salinity levels in the lower Murray—the primary source of water for Adelaide—tripled from levels experienced in the 1950s and exceeded the maximum recommended for drinking water for 31 months (Hart et al., 2020; Walker & Prosser, 2021). Wet years in Victorian irrigation districts also exposed their vulnerability to waterlogging and rising water tables, which mobilised salt to the surface, where it damaged crops and moved into the rivers via district drainage systems. By the early 1970s, salinity had become an important political issue in the Basin, particularly in South Australia. This led to the formation of a joint River Murray Working Party (RMWP) in 1973, which reported to an interjurisdictional ministerial steering committee. The terms of reference for the RMWP were to identify short-term and institutional changes required to effectively manage salinity in the river. Reflecting the increased concern about environmental values at the time, ministers also tasked the RMWP with investigating the impacts of river regulation ‘on conservation of flora and fauna on the main stem of the River Murray, including its storages as well as riparian and adjacent lands, and the means by which such problems may be mitigated or overcome’ (RMWP, 1975). The RMWP commissioned a review of the institutional arrangements for managing the Basin system. The review noted that, under the existing agreement between the Basin states, the River Murray Commission (RMC) had inadequate powers to manage water quality or broader environmental impacts in the Basin. The key point raised by the review was that the Basin states had created a transboundary The Australian National Water Resources Assessment was completed by the Australian Water Resources Council established under the new 11  Department of the Environment, Aborigines and the Arts, which became the Department of Environment and Conservation in 1972 and the Department of Environment in 1975. A change of government in 1975 led to the Department of Environment becoming the Department of Natural Resources, which later became the Department of National Development. These changes illustrate the ongoing tension between water for the environment and water for national development—although the primary powers for water management remained with the states. Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 27 body ‘to solve problems beyond the power of
individual States to resolve and then den[ied] it the necessary powers to undertake the task’. The review found that institutional arrangements for the RMC and between the states were entirely inadequate with regard to ‘modern water management principles’. The RMC lacked the ‘independence and autonomy to serve as a custodian of
the national interest and a spur to co-operative action by the Basin states’. In addition, the existing arrangements failed to acknowledge (RMWP, 1975): 1. the hydrological interdependence of all parts of the Murray-Darling–Murrumbidgee complex and its tributaries 2. the ecological interdependence of various parts of the system, irrespective of political boundaries 3. the dependence of water quantity and quality on the use of adjacent land, and the problems of erosion, watershed management and river protection 4. that, in making decisions to maximise benefits, modern planning criteria at least require that environmental effects and human and social preferences should be considered and weighed equally with national and regional economic objectives.
 The majority of the recommendations from the review of institutional arrangements were not implemented at that time (some remain relevant today). The RMWP did not have time to complete its investigations into the environmental conservation term of reference, and no response to this term or recommendations for action were recorded. However, the RMWP did recommend that the ‘overall objective should be to maintain the quality of River Murray water such that established uses are protected’. The management of water quality—salinity and nutrients—required additional arrangements to ‘co-ordinate State actions on water quality issues (RMWP, 1975). Despite the need for Basin-wide cooperation being identified in 1902 by the Interstate Royal Commission and the attendees at the Corowa Water Conference, the Basin would remain parochially managed as a set of separate state river systems until the late 1980s (Connell, 2007; IRC, 1902; MRMCL, 1902). In the 1960s, water scarcity induced by development emerged alongside salinity as a major issue. Growing demand for water resulting from development of dams, irrigation infrastructure and irrigation areas meant that new allocations of water could not be provided without putting security of supply for existing licence holders at risk (Hanemann & Young, 2020; Molle et al., 2010; Sturgess & Wright, 1993). Policy responses to manage these risks included moratoriums on the issue of new licences and a redesign of water licensing frameworks. South Australia (1969), Victoria (1968) and New South Wales (1977, 1981) all began to limit the issue of new water licences and unregulated pumping from some streams and valleys (Bjornlund & O’Callaghan, 2004). South Australia attempted to reduce existing entitlements in 1976. Area-based water licences that defined the area of land that could be irrigated, but did not limit the volume of water that could be taken, were progressively replaced with volumetric licences across the Basin states (NWC, 2011). Irrigator expectations that these limits on water supply would be removed by building Dartmouth Dam were dashed by a series of inquiries in Victoria on the environmental impacts of irrigation. Dartmouth Dam was completed in 1979, adding 4,000 gigalitres (GL) of storage. However, Victorian Government inquiries begun in 1975 and released in the early 1980s concluded that, although Dartmouth Dam would increase the reliability of existing entitlements, the quantum of existing water allocations was such that only limited volumes would be made available for auction, enabled by a reduction in transfers from the Goulburn–Broken system (Bjornlund & O’Callaghan, 2004). The mouth of the Murray River ran dry for the first time in recorded history in 1981, 2 years after Dartmouth Dam was completed. It became clear that further reforms were needed to meet the challenges of overallocation arising from three decades of dam building and river regulation designed to increase the amount of irrigated agriculture in the Basin. Valuing water: The Australian perspective 28 Environmental values of water in the Murray-Darling Basin It would take another decade for the first major interjurisdictional programs to address salinity in the Basin to appear. Individual Basin states began a range of activities to better understand and combat river and land salinisation from the 1960s. These included salt interception schemes, community engagement activities and development of small-scale salinity management plans. South Australia took legal action in New South Wales courts to try to block new irrigation developments in New South Wales. New South Wales responded with legislative amendments to remove South Australia’s standing in New South Wales courts (Connell, 2007). By the early 1980s, it was clear that effective management of salinity required interjurisdictional action, policy innovation and new funding mechanisms (Hart et al., 2020). A drought in 1980–81 caused salinity levels to again rise substantially. The states agreed to amend the River Murray Waters Agreement in 1982 to provide the RMC with nominal oversight over salinity issues, but this had little practical effect (Connell, 2007). Basin state ministers considered another review of governance arrangements in 1985, which confirmed that the majority of the issues identified in 1975 had not been addressed. Further negotiations concluded in 1987, leading to more substantial amendments to the River Murray Waters Agreement, which became the Murray-Darling Basin Agreement, and the replacement of the RMC with the Murray-Darling Basin Commission (MDBC). The MDBC oversaw an interjurisdictional Salinity and Drainage Strategy, which was put in place in 1988 and ran until 2000. A major audit of salinity in the Basin published in 1999 identified significant threats to the Basin without new management interventions (MDBC, 1999). The Basin Salinity Management Strategy (2001–2015) and the current Basin Salinity Management 2030 Strategy updated and extended the approach used in the Salinity and Drainage Strategy. These strategies have successfully reduced land and river salinity in the Basin through a combination of interjurisdictional cooperation (including joint investment in the most cost-effective measures, regardless of location), engineering works, innovative market-based instruments, and community and stakeholder engagement. However, ongoing salinity management will be required in the Basin as landscapes continue to mobilise salt (Hart et al., 2020, see Figure 7). 1,600 S&DS BSMS BSM2030 1,200 Salinity at Morgan ( µμS/cm) 800 400 0 1940 1960 1980 2000 2020 Notes: The chart shows when Murray River salinity exceeded the target of 800 μS/cm (electrical conductivity units) (red) and when salinity was less than 800 μS/cm (green). Note the linear regression plot (blue line), which shows the increase in salinity to around 1988 and then a decrease due to the introduction of salinity management actions and more recently a drier climate. The shaded blocks show the three major salinity reduction policy programs: Salinity and Drainage Strategy (1988–2000) (S&DS); Basin Salinity Management Strategy (2001–2015) (BSMS) and Basin Salinity Management 2030 Strategy (BSM2030). Figure 7. Daily salinity in the Murray River measured at Morgan. (Source: Hart et al., 2020. Figure by R. Marsh) Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 29 A new, compromise Murray-Darling Basin Initiative was agreed by Basin states in 1985 to address the broader governance issues identified by past reviews, including the need to manage the Basin as a single unit, and the importance of integrating land and water management at a catchment and Basin scale (Blackmore, 1995). The initiative was designed to adopt a ‘systems approach’, based on a high-level plan agreed by all governments, with implementation devolved to the states acting independently within their jurisdictions. These changes drove a broader cultural shift in approaches to managing the Basin, as infrastructure engineers began to be supplemented by staff with skills in economics, public policy and ecology. A major shift was underway to begin to introduce broader concepts of sustainability and environmental value into institutions previously focused on water resource management for agricultural production (Connell, 2007). Reviews of environmental resources in the Basin sponsored by the Murray-Darling Basin Ministerial Council highlighted the need for action on issues such as preventing further degradation, environmental restoration, climate change, cultural heritage, agricultural land use, water allocation, and community engagement and involvement in decision making (Connell, 2007; MDBMC, 1987, 1990). These reviews led to amendments to the Murray-Darling Basin Agreement in 1992–93 and new parallel legislation passed in each Basin parliament to ‘promote and co-ordinate effective planning and management for the equitable efficient and sustainable use of the water, land and other environmental resources of the Murray-Darling Basin’ (Australian Parliament, 1993).12 Despite these changes, water diversions for irrigation continued to increase. 3.4.2 State tensions, deteriorating environmental health, economic reform and drought By the 1980s, the high level of water resources development and use in the Basin increased the interconnections between water users’ decisions and increased tensions between the three southern Basin states. The differences between the way each state had planned irrigation development over the preceding decades had significant impacts on overall Basin water management, for which the institutional arrangements remained weak. New South Wales irrigation development focused on annual allocation of all available water resources and was dominated by annual cropping (rice and cotton), with overcommitment of water resources from an early stage. The concentration of horticulture and dairy in Victoria’s and South Australia’s irrigation districts led to a more conservative allocation regime focused on providing water security for permanent plantings (Bjornlund & O’Callaghan, 2004; Crase, 2008). Expanding irrigation demand in the 1980s exacerbated tensions between New South Wales and Victoria over water-sharing arrangements for carryover of water stored in Hume and Dartmouth dams. New South Wales opposition to changing water-sharing arrangements, which favoured the New South Wales approach to allocation, led Victoria to threaten to build a canal to carry water from the Murray River into the Goulburn River system, where it could be used for expanded irrigation, rather than forfeit much of the reserved water to New South Wales every year under the annual accounting rules. After further negotiations and concessions from Victoria, New South Wales agreed to the Victorian proposal for change (Connell, 2007). The history of agricultural development choices continues to be a source of tension between the states over water allocation, and the management and allocation of environmental water. Further evidence of the deterioration of river health mounted during the 1990s, alongside commitments to improve environmental management in the Basin. Low flows in the Darling River combined with an influx of saline groundwater and hot, still days in the summer of 1991–92 to create the world’s largest cyanobacterial (blue–green algal) bloom seen in a river to that date (Donnelly et al., 1997; Oliver et al., 1998). By December 1991, the bloom covered 1,200 km of the Darling River. A key driver of this shift is likely to have been the fact that the Australian Labor Party was in power in all major governments with Basin 12  responsibilities (Australian, New South Wales, Victorian and South Australian) during this period. The Labor Party draws much of its support from electorates outside the Basin, where powerful agricultural interests are closer to the Liberal–National Party coalition. Although broad concern about the environment was growing across Australian electorates, the Labor Party had fewer ties to agricultural interests in the Basin and therefore had more policy flexibility to begin to address environmental issues. The Australian Labor Party has also been more amenable to policy innovation that alters the status quo with regard to property rights and state rights to achieve improved environmental outcomes (Connell, 2007). Valuing water: The Australian perspective 30 Environmental values of water in the Murray-Darling Basin The New South Wales Government declared a state of emergency, and the Australian Government called out the armed forces to assist. Stock died after drinking river water, and irrigators and rural communities that relied on the river could no longer use the water. Occurring 10 years after the highly publicised drying up of the Murray River mouth, this algal bloom provoked enormous public debate and scrutiny over the management and environmental condition of the rivers of the Basin. Statements by government ministers, major Australian newspapers and the broader community interpreted the algal bloom as an indicator of severe mismanagement of the nation’s rivers (Muir, 2014). In 1992, all Australian governments agreed to a National Strategy for Ecologically Sustainable Development, which publicly highlighted the importance of improved environmental management across the nation (COAG, 1992). That year, the Prime Minister, Paul Keating, launched the Australian Government’s Environment Statement, which had a primary focus on the Basin by highlighting the ‘seriously degraded’ environmental state of the system. Following the algal bloom, the MDBC commissioned an audit of water use in the Basin, which found that surface water diversions had increased more than 5 times since 1920 and more than tripled since 1950. Diversions were continuing to increase at more than 1 percent per year; between 1988 and 1994, they had increased by 8 percent, despite the various state-level moratoriums on allocating additional water licences. The audit found that more than 95 percent of water diverted was for irrigation. It also found that (MDBC, 1995): 1. continued increases in diversions would reduce security of supply for existing irrigators 2. severe low flows at the mouth of the Murray River that would occur 1 year in 20 under natural conditions were occurring 6 years in 10 under 1994 conditions; with continuation of development trends, this would rise to 3 years in 4 3. there had been significant reductions in the frequency of flooding of floodplain wetlands and declines in major wetland areas of the Basin by up to 70 percent. In 1995, the Murray-Darling Basin Ministerial Council introduced an interim cap on diversions, which limited future diversions to their total 1994 level. Although the approach to calculating the cap in any one year was relatively complex, the key consideration was that it was not fixed to 1994 diversion volumes, but varied between years to take account of the Basin’s highly variable streamflows. Climatic and hydrological conditions in the 1993–94 water year were taken into account, along with volumes diverted, and Basin infrastructure and irrigation development conditions of the same year, to provide a reference for calculating the cap in future years. This meant that the volumes of water diverted in any future year could be larger or smaller than in 1993–94. The cap was made permanent in 1997. The introduction of the cap provided the impetus for further development of innovative approaches to water trading and related policy reforms in the Basin in response to new administrative and environmental challenges, which built on a framework of water entitlements and allocations already in existence. Completion of the ‘unbundling’ of water licences from landholdings turned a single water right into separate, tradeable rights, including: 1. water entitlements, which provide the legal right to a share of available water within a total consumptive pool 2. water allocations, which are the volume allocated to entitlement holders in any single water year (1 July to 30 June). These market reforms aimed to drive water to its ‘highest-value use’, led to the development of sophisticated water markets, and initiated broader public engagement with debates over resource distribution and sustainability, as well as environmental degradation in the Basin (MDBC, 2000). Many of these debates were highly political and highlighted differences in value systems across parts of the Australian community—differences that often, but not always, broke down across rural and urban constituencies and political party lines (Powell, 2000). Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 31 Practical implementation of the cap across the Basin was slow, uneven and challenging. Implementation remained incomplete in 2004. Basin governments believed that the cap was ‘not an end in itself, but rather a first step towards achieving the longer term objective of the Initiative’ and an approach that would be improved and refined over time (MDBC, 2000). However, implementation was slowed by technical and political difficulties, as well as the voluntary, opt-in approach necessitated by state government control of water resources. Water diversions in the 2001 and 2002 water years were among the highest on record, despite the Basin having entered a major drought in 1998 (MDBA, 2020a). Implementation issues relevant to limiting consumptive use and providing water for the environment included the following: 1. Failure to incorporate unto the cap groundwater use and much of the floodplain harvesting and irrigation that occurred in the northern Basin, particularly in Queensland and the New South Wales Border Rivers region. Because the cap was limited to surface water use, groundwater extractions increased. Queensland did not initially opt in to the cap. By 2004, New South Wales had still not defined a target for the Border Rivers, and no mechanism was in place to measure floodplain harvesting take. A 2003–04 audit noted concern ‘that the Border Rivers will be found to be in breach once a Cap is defined’ (MDBC, 2000; MDBMC, 2005). 2. Recognition of existing water licences that had not yet been developed. New South Wales had issued a substantial number of water licences that had never been used (called ‘sleeper’ licences). Water trading led to the activation of these licences, which drove up water prices under the cap. This led to significant political hostility to the cap among New South Wales irrigators and likely undermined implementation in a system with a weak regulatory framework dependent on voluntary compliance (Connell, 2007; MDBC, 2000). 3. Expansion of water licences after introduction of the cap. South Australia issued new water licences from Lake Alexandrina at the end of the Basin system after introduction of the cap. Although this did not have environmental impacts upstream, it reduced the credibility of the reform (Connell, 2007). 4. Delays in setting cap targets. The 2003–04 cap audit, 8 years after the original cap was imposed, noted that cap targets were still not established in Queensland, New South Wales and the Australian Capital Territory (MDBMC, 2005). However, by this time, caps were well established in the southern Basin, which accounted for the largest component of water use. 5. Measuring diversions, and accrediting the models required to determine cap levels and compliance. The 2003–04 cap audit highlighted serious issues with metering and measurement accuracy, and reporting of diversions in New South Wales, along with extended delays in accrediting the models used to determine cap compliance (MDBMC, 2005). The Australian Government attempted to use its financial resources to drive environmental water reform in the Basin in parallel with the work of the MDBMC. The Council of Australian Governments (COAG), established in 1992 as the peak intergovernmental forum in the Australian federation, agreed to a strategic framework for a decade-long process of water industry reform in 1994 (COAG, 1994). The COAG agreement was part of a broader microeconomic reform program designed to promote economic growth.13 The Australian Government offered state governments substantial ‘national competition’ payments if they could implement reforms by set dates (Hanemann & Young, 2020). Formal provision of surface water and groundwater for the environment was a requirement of the reform agreement. The agreement stipulated that environmental requirements were to be ‘determined wherever possible on the best available scientific information’ and governments were ‘to have regard to the intertemporal and interspatial water needs required to maintain the health Applied to the water industry, this reform program also demanded major reforms to allow open water trading, alongside corporatisation of 13  water utilities and irrigation districts, and the full recovery of costs through irrigation charges (Hilmer, 1993). Valuing water: The Australian perspective 32 Environmental values of water in the Murray-Darling Basin and viability of river systems’. Where river basins were overallocated or ‘deemed to be stressed’, governments were ‘to provide a better balance in water resource use, including appropriate allocations to the environment to enhance/restore the health of river systems’ (NCC, 2004). The agreement also required governments to have regard to a new set of National Principles for the Provision of Water for Ecosystems. The National Principles made it clear that, where ‘environmental water requirements cannot be met due to existing uses, action (including reallocation) should be taken to meet environmental needs’ (SLWRMC, 1996). A new body, the National Competition Council (NCC), was created in 1995 to oversee state governments’ progress against reform goals, including those relating to environmental water. The NCC assessed progress in 1997, 1999, 2001 and then each year to 2005. State governments’ water management arrangements were required to show the following elements: 1. Ecological sustainability objectives should be specific to individual systems and contextually consistent with the relevant bioregion. 2. The allocation of environmental water in aquatic systems where there are existing users should be sufficient to achieve a ‘healthy working river’ (see definition in Box 1.1 above). 3. The allocation of environmental water in aquatic systems where ecological health is adequate should be at a level that maintains ecological health (NCC, 2004). Governments were also required to show that their arrangements for environmental water allocation had been developed (NCC, 2004): 1. with reference to the best available science 2. to allow monitoring and adaptive management so that regular assessments of ecosystem health guided management 3. by a process involving robust and transparent stakeholder consultation, including ensuring that ‘particular interest groups were not over represented’. Despite the money at stake for state governments, the pace of environmental water reform remained slow, and in some catchments non-existent. The NCC reviews also revealed the inadequacies of the cap in terms of protecting water for the environment in the Basin. New South Wales compliance with environmental water reform goals was noted by the NCC as particularly problematic (New South Wales accounted for around 60 percent of all diversions of water for consumptive use in the Basin). For example, the Gwydir River Management Plan (in the northern Basin) allowed a long-term extraction limit that almost doubled average extractions from the previous decade, while remaining 6.5 percent below the cap. The NCC audit noted the growth in this limit with concern, given evidence that the ecological health of the Gwydir was in decline and there was ‘clear evidence of increasing environmental stress within the river and, in particular, in its important wetland areas’. The audit noted that New South Wales provided ‘no evidence to support the sustainability of the long-term extraction limit’ and that out-of-session decisions by the River Management Committee had substantially reduced water available for the environment. Similar problems were noted in other New South Wales catchments, and the NCC concluded that New South Wales had not provided adequate environmental water to ‘sustain ecological values’. As a result, the NCC gave New South Wales notice that, without substantial improvement, its competition payments would be suspended or reduced (NCC, 2004). Continued noncompliance by New South Wales saw its competition payments reduced by 10 percent (AU$26 million) the next year, later amended to 5 percent (AU$13 million) (Connell, 2007). Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 33 The slow pace of change and the failure to meet all the goals of the reform program led to a new COAG water reform agreement in 2004—the National Water Initiative (NWI) (COAG, 2004). The Basin was now 6 years into the millennium drought (1997–2009), the longest drought recorded since European settlement. Working at a national scale, the NWI aimed to invigorate the water reform process and address the deficiencies of the previous reform efforts. A new independent statutory authority reporting to the Australian Government—the National Water Commission—was established to oversee reform. With regard to environmental water, the NWI built on previous NCC work with an additional focus on (COAG, 2004): 1. joint arrangements where resources are shared between jurisdictions 2. common arrangements in the case of significantly interconnected groundwater and surface water systems 3. trading environmental water on temporary water markets when the water was not required for environmental purposes in a particular year 4. a broad suite of measures to recover water for the environment, including direct purchase (buyback), investment in more efficient water infrastructure or water management practices, and behavioural change. The NWI required all Basin states to have adopted plans to: 1. immediately ensure effective institutional arrangements to achieve environmental outcomes 2. address the overallocation of water as per NCC commitments by 2005 3. have made ‘substantial progress toward adjusting all overallocated and/or overused systems by 2010’ (COAG, 2004, original emphasis). An amended Murray-Darling Basin Water Agreement was signed at the COAG meeting with a plan— the Living Murray—to invest AU$500 million over 5 years to reduce water allocations in the Basin and achieve a set of defined environmental outcomes across six icon sites on the Murray River (Connell & Grafton, 2011; Turral et al., 2009). However, water resources in the Basin remained overallocated and environmental conditions poor, despite 20 years of reform and more than 30 years since the need to address environmental damage in the Basin was recognised by governments. Valuing water: The Australian perspective 34 Environmental values of water in the Murray-Darling Basin 3.5 Reforming how water is managed in the Basin (2007 to present) Box 6: Key points • Drought, an Australian Government budget surplus and a national election catalysed major change in the management of the Basin, with the Australian Government assuming a central, coordinating role. As a result of these changes, around one-fifth of the water previously diverted (on average) for consumptive use has now been returned to the environment. • However, implementation of these changes has been marked by tension between water users and between Basin jurisdictions. These tensions highlight the extent to which valuing environmental water is a contested question of social and political judgment. • In the period since the late 1960s, Basin governments faced multiple challenges in reforming water use and allocating water for the environment. Challenges that slowed progress and increased tensions and resistance to change included: – a weak constituency for reform – difficulties in coordinating policies among the states – high apparent social costs of reform – scientific uncertainty – the need to manage values-based and political disagreements – technical complexity of implementation. Drought, an Australian Government Budget surplus and a national election catalysed major change in the management of the Basin, with the Australian Government assuming a central, coordinating role. The millennium drought (1997–2009) led to the 2006–07 water year having the lowest inflows to the Murray River on record. Water allocations were reduced to 10 percent of the historical average. Work by the Commonwealth Scientific and Industrial Research Organisation (CSIRO) projected future declines in average annual flows in the Basin as a result of climate change, and impacts from farm dams, forestry and groundwater extraction (Van Dijk, 2006). The Australian Government was running a large Budget surplus as a result of a mining boom and asset sales. A national election was due by the end of 2007, which was likely to be partially fought on climate change and environmental management grounds. The Liberal–National Party government announced a National Plan for Water Security, under which the Australian Government would ‘assume responsibility for the problems created by the states’ and legislate to return the Basin to sustainable levels of water diversion ‘once and for all’ (Howard, 2007). The National Plan committed AU$10 billion for water reform, including $3.1 billion for buying back water entitlements for the environment from consumptive users and $5.8 billion for water infrastructure subsidies. The proposal relied on the states referring their water management powers to the Australian Government to ‘enable it to manage the MDB in the national interest’. However, Victoria refused to refer its powers, and the Commonwealth Water Act 2007 passed in September 2007 relying on the Australian Government’s external affairs power and its obligations under the Ramsar Convention and the Convention on Biological Diversity (Australian Parliament, 2007). A change of government in December 2007 led to the National Plan being rebadged as Water for the Future and the financial commitment increasing to $12.9 billion. With further financial inducements, the states agreed to refer some of their water management powers to the Australian Government in early 2008 (Dyson, 2021). Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 35 The Water Act 2007 provides the legislative framework for managing the Basin in the national interest while recognising that the Basin states continue to manage the Basin’s water resources within their borders. The Australian Government’s reliance on its obligations under international environmental treaties is clear in the objects of the Act, which highlight some of the tensions arising from the challenge of delivering environmental water policy in a Basin that has been fundamentally re-engineered for agricultural water use, with a politically powerful agricultural constituency. The objects of the Water Act include: • to enable the Commonwealth, in conjunction with the Basin states, to manage the Basin water resources in the national interest • to promote the use and management of the Basin water resources in a way that optimises economic, social and environmental outcomes • to ensure the return to environmentally sustainable levels of extraction for water resources that are overallocated or overused • to protect, restore and provide for the ecological values and ecosystem services of the Basin • to improve water security for all uses of Basin water resources • to ensure that the management of the Basin water resources takes into account the broader management of natural resources in the Basin. The Water Act established the Murray-Darling Basin Authority (MDBA) to replace the MDBC, and required the MDBA to prepare a Basin Plan that would allow integrated management of Basin water resources to promote the objects of the Act. The Basin Plan must include: • long-term average sustainable diversion limits (SDLs) for the amount of surface water and groundwater that can be diverted from the Basin’s water resources • Basin-wide environmental objectives for water-dependent ecosystems, alongside water quality and salinity objectives • design and development of a water trading regime that ensures that water reaches its most productive use • requirements that state water resource plans must meet to be accredited. The Basin Plan was developed over several years, based on detailed research and analysis. However, when the MDBA published the results of its initial work in 2010, it became clear that the process of reconciling an ‘environmentally sustainable level of take’ (ESLT)—a level of water extraction that, if exceeded, would compromise ecosystem functions, environmental assets or environmental objectives—with the objective to ‘optimise economic, social and environmental outcomes’ would be politically contentious; it would also highlight the very real challenges in turning the policy prescriptions of the NWI into effective, publicly legitimate, long-term water management practice. The Basin Plan was eventually legislated in November 2012 with an initial 12-year period to meet established limits on diversions. How environmental water has been valued and protected within this reform process is outlined in detail in Section 4. As a result of the Basin Plan, around one-fifth of the water previously diverted (on average) for consumptive use has been returned to the environment. However, the 8 years since the Basin Plan passed Australia’s Parliament have been marked by tension between water users and between Basin jurisdictions. These major changes to Australian water policy coincided with the most severe drought on record, ongoing demographic changes in Australia’s agricultural sector, and significant changes in returns for a number of the major irrigated crops in the Basin. These coincident stressors increased tensions, which were often expressed as antipathy to environmental water—a policy domain where agricultural water users felt they could exert pressure and effect change. Protests have dogged the Basin Plan Valuing water: The Australian perspective 36 Environmental values of water in the Murray-Darling Basin from its development to the present. The initial presentation of the Guide to the proposed Basin Plan, which included research to identify environmental values and guide the recovery of water for the environment, was burned in the streets of Griffith (a Basin irrigation town). The eventual political fallout claimed senior leaders at the MDBA (Crase, 2011; Matthews, 2018). This has combined with high levels of mistrust between users, communities and the government agencies tasked with implementation of reforms, despite a range of local and/or regional ecological benefits from managed environmental watering events. Debates have become ‘toxic’ and ‘fuelled by uncertainty, misinformation, misperceptions or misappropriation of available information’, often on social media (IIG, 2020). Water politics has become increasingly partisan. Policy and scientific debates have been marred by claims of a ‘post-truth water world’, maladministration, regulatory capture, undeclared conflicts of interest and ‘stealth advocacy’ in the place of independent scientific advice (Grafton et al., 2019; Grafton & Williams, 2020; Walker, 2019). Increasingly cynical about government-led exercises in stakeholder consultation, communities have noted that they are ‘over-consulted and under-listened to’ (Sefton, 2020). Water reform has become a flashpoint for community concerns around other demographic and economic changes. State and Australian Government ministers have sought police protection following threats to their safety, and government departments have directed staff to avoid specific parts of the Basin (Sullivan, 2019). State water ministers have threatened to ‘withdraw’ from the Basin Plan—even though it is not entirely clear how such a withdrawal might be effected, and the water portfolio at state and national levels has been described as a ‘poisoned chalice’ (Barbour, 2020; Davies & Karp, 2019). These tensions highlight the extent to which valuing environmental water is a contested question of social and political judgment (Briscoe et al., 2010; Capon & Capon, 2017; Matthews, 2018). Scientific and technical knowledge are critical to inform water governance; however, the difficulties faced in implementing an environmental water management regime in the Basin reflect the ongoing social, cultural and political facets of the challenge. A wide range of expert knowledge (engineering, legal, ecological, economic, hydrological, political, sociological) and local community knowledge had contributed to key aspects of environmental water management decisions. However, determining and prioritising the ‘socially valued benefits’ and ‘vital ecological services’ that aquatic ecosystems provide are highly contested among social actors in almost all contexts. Defining the meaning of concepts such as ‘sustainability’ or ‘protecting and restoring’ aquatic ecosystems, which underpin the Basin’s legislative context, has involved contests over who participates and what forms of knowledge are legitimate inputs to those definitions (Blomquist, 2012, 2020). Political contests over the use and control of water resources consequently shape the way environmental water policy issues are portrayed and understood (Stone, 2012). Disputes are not unusual in subnational transboundary river basins where water governance must manage a long history of basin development and overallocation in a changing climate (Moore, 2018). Water governance in such contexts is always a deeply political endeavour, tightly coupled to other major policy issues such as regional development, agricultural transitions and First Nations rights. Policy decisions about the allocation and management of water are never value-neutral, and there is no way to translate technical and scientific knowledge into policy that bypasses difficult political trade-offs and decisions (Briscoe et al., 2010) This presents challenges for the institutions tasked with implementing environmental water policy in the Basin because the legislative framework that underpins their work frames the identification of environmental water requirements as a technical and scientific issue, rather than one that is also inherently political. The Water Act 2007 requires that the Basin Plan be developed on the basis of the ‘best available scientific knowledge and socioeconomic analysis’ (s 21(4)(b)); consequently, it is often held that key decisions, such as the setting of SDLs, must ‘be determined by science, not politics’14 (Walker, 2019). However, the controversy that continues to surround the Basin Plan Note that science should be understood in its broad sense as including the social sciences. The Water Act’s objects include ‘to promote the 14  use and management of the Basin water resources in a way that optimises economic, social and environmental outcomes’ (s 3(c)). Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 37 and the recovery and delivery of water for the environment suggests that ‘the value bases of disputes underlying environmental controversies must be fully articulated and adjudicated through political means before science can play an effective role in resolving environmental problems’ (Sarewitz, 2004). Progress in broadening support for the Basin Plan’s environmental water regime requires advances in political decision making alongside community deliberation and engagement (PC, 2021b). One of the lessons from the Australian experience in the Basin is that, although valuing environmental water and planning for its management and delivery must be informed by evidence from technical and scientific disciplines, a resolution to the difficult values-based and political controversies surrounding the issue will not be found in purely technical solutions. It is critical to integrate technical analysis with broad stakeholder deliberation (National Research Council, 1996). Multiple challenges faced Basin governments in allocating water for the environment, slowed progress, and increased tensions and resistance to change. These included the following: • A weak constituency for reform. Water consumption under the status quo had been identified as unsustainable for more than two decades. As a result, reforms to provide water for the environment required recovering water from agricultural users with strong political influence, the ability to act as a cohesive advocacy coalition, and a strong interest in engaging in water policy debates. • Difficulties in coordinating policies among the states. Providing water for the environment in an overallocated system increased conflict between upstream and downstream states. Weak institutional arrangements made it very difficult to ensure the transboundary coordination required to manage the Basin’s lands and waters as an integrated ecological whole. • High apparent social costs of reform. Reducing water available for irrigated agriculture seemed likely to reduce employment in the farm sector and associated employment in rural towns. Many of the Basin’s rural communities existed as a result of a long 20th century period of state-sponsored irrigation expansion to drive rural settlement. In the absence of clearly articulated structural adjustment policies for these communities and industries, they used their considerable political influence to strongly resist changes that appeared to threaten their futures. • Scientific uncertainty. The ecological changes that had occurred since European settlement of the Basin were considerable. Despite policy calls for the use of ‘the best available science’ to identify requirements for environmental water and other restoration activities, many decisions involved debate over values. Uncertainties surrounding the impact of climate change, which has been a deeply divisive and debated topic in Australia, combined with the need to make values-based assessments of environmental water requirements to make it difficult to provide authoritative and agreed estimates of the benefits of environmental water provision (or the costs of the status quo). Because the interpretation of ecological and hydrological studies had the potential for substantial distributional consequences, groups that would be most affected by environmental reforms had strong incentives to challenge the science. This made it difficult to establish the shared information basis required to engage in debate over values. • Technical complexity of implementation. Accurately metering and measuring consumptive use across the Basin’s landscapes presented a series of technical challenges, particularly in the northern Basin, where water on floodplains is harvested for later use and at low flows. Developing the models required to determine targets in the Basin’s highly variable streamflows remains a technical challenge. Consequently, calculating the costs and benefits of providing more water for the environment, even where outcomes can be agreed, remains a complex and difficult task. (Tompson & Price, 2009). Climate change is likely to continue to exacerbate these challenges. The volume of inflows over the past 20 years is less than half that during the period of major development and water allocation for irrigation (see Figure 8). Climate projections for the Basin suggest the potential for significant declines in inflows by 2046–2075 relative to the 1975–2000 period (see Figure 9). Valuing water: The Australian perspective 38 Environmental values of water in the Murray-Darling Basin Note: The inflows data illustrate some of the current and future challenges faced by environmental water managers in the Basin. The trend line is a 5-year simple moving mean; the grey band shows the long-term interquartile range for inflows (25th to 75th percentiles). Figure 8. Annual inflows in the Murray-Darling Basin, 1900–2020 (Source: Figure by R. Marsh). Median projections for RCP4.5 and RCP8.5 greenhouse gas concentration trajectories. Note that the relatively course resolution of global climate models combined with hydrological models produces the artefacts visible above. Figure 9. Projected percentage runoff declines for the Murray-Darling Basin by 2046–2075 relative to 1975–2005 (Source: Chiew et al., 2017. Figure by R. Marsh) Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 39 4 Current approaches to valuing water for the environment in the Murray-Darling Basin Current approaches to valuing water for the environment in the Murray-Darling Basin can be described through four focus areas: • recognition and acceptance of environmental values • measurement of environmental values • mechanisms that realise the environmental value of water • learning and adaptation. This section outlines in more detail the current approaches, tools and mechanisms (Table 4.1) applied in the Basin under these four focus areas. We describe who has been engaged through these approaches, and highlight the successes, challenges and tensions. Table 1. Overview of approaches, tools and examples for recognising, measuring and realising environmental values in the Murray-Darling Basin Approach Tools Examples Recognition and Agreements International agreements, especially acceptance of the Ramsar Convention on Wetlands environmental values of International Importance (1971) Legislation, initiatives National Water Initiative (2004) and strategies Commonwealth Water Act 2007 Basin Plan (2012) Funding commitment Government investments and subsidies Measurement of Mapping and measuring Mapped distributions of floodplain environmental values environmental features ecosystems and vegetation communities Identifying environmental Environmental water requirements water requirements for key environmental assets and ecosystem functions Modelling Hydrological and ecohydraulic modelling Valuing water: The Australian perspective 40 Environmental values of water in the Murray-Darling Basin Approach Tools Examples Mechanisms that realise Setting limits on extraction Environmentally sustainable level of take the environmental value and sustainable diversion limit (SDL) of water Recovering water to meet Buyback, infrastructure modernisation, the SDL administrative approaches Allocating the recovered Environmental water holders water to an environmental (Commonwealth and Basin states) user Embedding into broader Water resource plans, long-term water resource planning environmental watering plans, annual environmental watering plans Prioritising use Annual and 5-year environmental watering priorities Using water for environment Mechanisms to use water: deliver, carryover, trade Monitoring and accounting Flow measurement and accounting, for the use and benefits of Long-Term Intervention Monitoring project environmental water Learning and adaptation Long-term monitoring and Ecological monitoring and evaluation, evaluation programs Basin Plan evaluation, state-based programs Independent reviews Scheduled and independent inquiries 4.1 Institutional roles and responsibilities for managing water for the environment Clear governance arrangements are important to realise the benefits of water for the environment. With the large investment of public funds, accountability for the decisions made across all areas of environmental water management is important. Trust in (and between) agencies is important to enable timely decision making at the appropriate management scale (e.g. local assets, river reach). Before looking at how environmental water is managed in the Basin, it is important to understand the relevant institutional roles and responsibilities. Horne & O’Donnell (2014) identified a clear set of features that should be included in the governance arrangements for environmental water management in the Basin: • Separate policy and delivery governance processes, so that the users of environmental water are distinct from the policy processes that govern its use. • Devolve the maximum work and decision making to the lowest level possible, while retaining the capacity for Basin-wide environmental watering outcomes. • Loop information flow between agencies, so that it flows both up and down spatial scales of decision making. • Respect that each agency has its own objectives and accountabilities. Recent reviews have found that the governance arrangements for environmental water have developed and matured in recent years (MDBA, 2020c; PC, 2018). By working together closely on all aspects of managing water for the environment, agencies and jurisdictions are building greater trust between themselves. Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 41 Management arrangements and oversight for environmental water were updated when the Basin Plan came into effect. The roles and responsibilities for environmental water management under the Basin Plan are nested, with different functions and scale (Figure 10). Figure 10. Overview of roles and responsibilities in environmental water management in the Murray-Darling Basin (Source: Adapted from O’Donnell, 2013) A range of parties fill the roles and responsibilities in Figure 10: • The Australian Government Department of Agriculture, Water and the Environment undertakes strategic purchases and efficiency programs under the Basin Plan to recover and retain water in the system, to keep rivers, lakes and wetlands healthy. • The MDBA is responsible for coordinating how the Basin water resources are managed through the Basin Plan. The MDBA plans, coordinates and prioritises use of water for the environment at a Basin scale. It also operates and manages the Murray River infrastructure (i.e. dams and levees) to store water and allow environmental flows to occur. • The Commonwealth Environmental Water Holder (CEWH) holds and manages environmental water on behalf of the Australian Government, guided by the Basin Plan and the Basinwide environmental watering strategy. • Basin state environmental water holders manage their own state water portfolios and allocate water to achieve state priority objectives. • River operators store, manage and deliver water (including environmental water) in particular areas of the Basin. • Local land, waterway and environmental asset managers manage the delivery of water to environmental assets to achieve onground outcomes at the local scale. Coordination and cooperation between these parties are discussed in the following sections. Valuing water: The Australian perspective 42 Environmental values of water in the Murray-Darling Basin Intergovernmental coordination for connected environmental watering events has recently been formalised in the southern and northern Basins. To facilitate coordination for the delivery of environmental watering events, the MDBA established the Southern Connected Basin Environmental Watering Committee (SCBEWC) in 2014. The SCBEWC is a collaborative forum that brings together environmental water holders, asset managers and river operators to prioritise effort and resources to meet environmental needs in the southern connected Basin. The Productivity Commission (PC, 2018) noted that the SCBEWC has been ‘highly successful in increasing the coordination of environmental watering in the southern Basin … the yearly number of environmental watering events occurring throughout the southern Basin has fallen, while the total volume of environmental water delivered has risen’. Similar to the SCBEWC, a Northern Basin Environmental Watering Group was established by the MDBA in November 2019. It provides an enduring forum to coordinate planning and delivery of water for the environment across the northern Basin (MDBA, 2020d). 4.2 Recognition and acceptance of environmental values Box 7: Key points • Recognition and acceptance of water-related environmental values in the Basin are demonstrated though bipartisan support at the national level for the Water Act 2007 and the Basin Plan. • Current management of water for the environment in the Basin must meet the requirements of the Basin Plan (2012). • Significant financial commitments have been provided to implement the recent reforms. Water-related environmental values of the Basin have been recognised and have been a key feature in recent reform. Recognition of water-related environmental values has not come overnight, given that the Basin has more than 30,000 wetlands, 100 of which are recognised as nationally important because of environmental, heritage or cultural significance. Environmental values were recognised much earlier than the recent reforms, as evident in programs such as the Living Murray Program and state-level watering programs. A primary objective of recent water reform has been to protect and restore water-dependent ecosystems of the Basin and their ecological functions (MDBA, 2012b). This included establishing the institutions and structures to allow environmental water to be recovered and delivered at a Basin-wide scale. Reform was required at a Basin scale to deliver a ‘healthy working basin’ with healthy and resilient ecosystems, vibrant and strong regional communities, and productive and sustainable water-dependent industries. Current management of water for the environment in the Basin must meet the requirements of the Basin Plan (2012). The Basin Plan is the legal framework to reset the balance of water use in the Basin. It sets environmental and other objectives for the Basin—supported by the Basin Wide Environmental Watering Strategy (BWEWS) and long-term watering plans—and establishes new, lower SDLs to achieve them. It also outlines the key actions, processes and timeframes that governments are to adopt to implement the plan (PC, 2018). Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 43 Management objectives and outcomes to be achieved by the Basin Plan in relation to environmental outcomes are specified: … within the context of a working Murray-Darling Basin: (1) (a) to protect and restore water-dependent ecosystems of the Murray-Darling Basin; and (b) to protect and restore the ecosystem functions of waterdependent ecosystems; and (c) to ensure that waterdependent ecosystems are resilient to climate change and other risks and threats; and (d) to ensure that environmental watering is co-ordinated between managers of planned environmental water, owners and managers of environmental assets, and holders of held environmental water. Note 1: The fact that water storages and property (including floodplains) are under the control of various persons currently restricts the capacity to actively manage all water-dependent ecosystems. Note 2: Particular objectives relating to each of the objectives in paragraphs (1)(a) to (c) are specified in Part 2 of Chapter 8. (2) The outcome in relation to subsection (1) is the restoration and protection of water-dependent ecosystems and ecosystem functions in the Murray-Darling Basin with strengthened resilience to a changing climate. (Basin Plan 2012, 5.03) Significant funding commitments continue to enable implementation of the Basin Plan. The Australian Government earmarked AU$13 billion to implement the Basin Plan. In 2018, almost $8.5 billion had been spent, and $4.5 billion was still to be spent by 2024 (PC, 2018). While the funding supports the implementation of improved water-sharing arrangements across all users, there has been a significant focus in supporting achievement of environmental water recovery and improved water delivery through (DAWE, 2021; PC, 2018): • $3.1 billion to purchase water entitlements for the environment, with $2.7 billion of this spent to recover 1,228 GL • $4.8 billion for investment in modernised water infrastructure, with $3.9 billion spent. Of this, $2.8 billion has been invested in projects that delivered 677 GL of water savings to the environment • $1.3 billion for supply measures, of which $34 million has been spent on developing projects (supply measures result in more efficient delivery of water for the environment—for example, building or improving river or water management structures, and changes to river operating rules) • $1.5 billion to recover an additional 450 GL to pursue enhanced environmental outcomes, of which $14 million has been spent. Box 8: Success - Recognising and enabling the environment as a legitimate user of water Recognising the value of the environment enables it to be acknowledged as a legitimate user of water. This can manifest in a variety of ways, from community support for delivery of environmental water through to the establishment of institutional structures that place the environment ‘at the table’ in national and Basin-scale negotiations, planning and delivery of water. In Australia, this is exemplified by the environmental water holders that are established separately from other government institutions—for example, the CEWH and the Victorian Environmental Water Holder. Valuing water: The Australian perspective 44 Environmental values of water in the Murray-Darling Basin 4.3 Measurement of environmental values Box 9: Key points • Measurement of environmental values and their water requirements has been approached as a technical and scientific exercise. • Environmental water requirements have been quantified to inform the setting of SDLs, and to inform watering regimes at managed environmental assets. • Environmental water requirements are quantified for components of the flow regime that have been identified as important for the target environmental values. Fit-for-purpose methods were applied and used best available science. As new information is available, environmental water requirements are adapted. Measurement of environmental values is approached as a technical exercise that is based on ‘best available science’. A key principle of the Basin Plan is to use and apply the ‘best available knowledge and science’ in the identification and development of water-sharing arrangements. From the identification of assets and functions through to the determination of environmental water requirements, all approaches must have regard to the latest knowledge and approaches. Many specialists technical skills have been used in the measurement of environmental values, including hydrology; modelling (ecosystem, hydraulic and hydrologic); freshwater riverine, floodplain and wetland ecology; groundwater; water quality; river operations; and spatial analysis. Use of this range of expertise was limited by the timeframe to develop environmental watering knowledge and requirements, funding resources and the state of existing knowledge (e.g. hydrological data, models). Aboriginal traditional ecological knowledge has not systematically been incorporated at this stage of measuring environmental values. All states and asset managers are required to have formal processes for engagement with local communities and Traditional Owners to identify opportunities to achieve social or cultural outcomes with environmental water, while ensuring that environmental outcomes are not compromised. A recent review of implementation of the Basin Plan noted that processes should be developed in consultation with Traditional Owners and Indigenous organisations and communities to enable meaningful engagement (PC, 2018). Box 10: Tensions - First Nations people’s voices excluded from reform process Connection to land and waters is fundamental to the cultural values of First Nations Australians. The inclusion of First Nations people’s values and perspectives in water management across the Murray-Darling Basin has only begun to occur since the 2000s. Inclusion has occurred through statutory mechanisms, tailored engagement processes and community engagement activities. Although the Basin Plan and its environmental water framework incorporate Indigenous values and uses, implementation has not always included inputs from First Nation people. More recent initiatives, such as a permanent Indigenous position on the Board of the MDBA, are a move in the right direction, but tensions remain on how well First Nations people’s voices have been included in the reform process. Parallel engagement to ensure that water reform links to First Nations economic development, health and land management aspirations remains in its early stages. This tension is discussed further in the accompanying case study (Valuing water: The Australian perspective. Cultural values of water in the Murray-Darling Basin). Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 45 The Basin Plan identifies environmental values as assets and functions. Consistent criteria for the identification of environmental assets and functions, and methods to determine environmental water requirements are set out in the Basin Plan. Application of consistent criteria (see Attachments 1 and 2 for the criteria) to identify the environmental assets and ecosystem functions in the Basin resulted in identification of 2,442 environmental assets, and 88 hydrological indicator sites for assessing ecosystem function (MDBA, 2010; Swirepik et al., 2016). Key environmental assets include the rivers, lakes, billabongs, wetlands, groundwater systems, floodplains and their flood-dependent forests, and the estuary of the Basin. They encompass water-dependent ecosystems, ecosystem services and sites with ecological significance, including the Coorong and Lower Lakes (MDBA, 2010). The estimated number of environmental assets can vary greatly, depending on the criteria that are applied. For example, the estimated number of key environmental assets can range from 16 internationally listed wetlands to a list of more than 33,000 ‘significant wetlands’ (including some unnamed dry watercourses) based on the International Union for Conservation of Nature list of rare and endangered species. Key ecosystem functions are the fundamental physical, chemical and biological processes that support the Basin’s environmental assets—for example, transport of nutrients, organic matter and sediment in rivers; wetting and drying cycles; and provision for migration and recolonisation by plants and animals along rivers and across floodplains. From a surface water flow perspective, many of the key ecosystem functions and key environmental assets are hydrologically connected and interdependent (MDBA, 2010). Ecosystem functions have proven more difficult to identify as spatially discrete units and to quantify requirements for. During the development of the Basin Plan, an early assumption was that, by addressing the water requirements for hydrologically connected assets, the functions could be sustained: From a surface-water flow perspective, many of the key ecosystem functions and key environmental assets are hydrologically connected and interdependent. This means that if sufficient water is provided for key ecosystem functions at one location it will be sufficient for those functions at many locations, both upstream and downstream. This same water will also provide for floodplain and wetland ecosystem functions associated with environmental assets, as well as contributing to the ecosystem functions associated with the rivers connecting the assets together. (MDBA, 2010). Technical work on ecosystem functions has since progressed, and is used for annual and long-term planning for environmental water use (see Sections 4.4.5 and 4.4.6). Ecohydrological assessments for indicator sites were used to determine environmental water requirements that informed the ESLT and SDLs. The level of knowledge and data for each of the 2,442 identified environmental assets varied considerably, so a smaller subset of 24 ‘indicator sites’ was adopted for determining environmental water requirements (MDBA, 2010). In choosing an approach to identify the water requirements to sustain environmental values, it was recognised that there was a significant degree of uncertainty in identifying environmental water requirements. Some of the factors that influenced the approach were as follows (Swirepik et al., 2016): • For many species and ecological communities, the relationship between the provision of water and environmental outcomes is poorly understood (Poff & Zimmerman, 2010). • Vegetation communities are located across the floodplain and naturally experience significant variability in their inundation frequency. • Environmental water requirements vary spatially in response to differences in climate, soil type, access to other water sources and genetic diversity. Valuing water: The Australian perspective 46 Environmental values of water in the Murray-Darling Basin An umbrella environmental asset (UEA) approach was adopted that factored in the imperfect knowledge, yet acknowledged the ‘need to start somewhere’ to identify water requirements at a valley and Basin scale. Similar to other holistic flow determination methods, the approach uses environmental water requirements developed for information-rich areas to represent the water requirements of a river reach or valley (Figure 11). In this method, detailed ecohydrological assessments of environmental water requirements that focused on the overbank, bankfull and fresh components of the flow regime were undertaken at 24 UEA sites across the Basin (Swirepik et al., 2016). Flow magnitude, duration, frequency and timing were established for each site to meet the needs of the key ecosystem components, such as vegetation, birds and fish (Swirepik et al., 2016). Figure 11. Overview of the range of environmental flow assessment methods, indicating where the UEA approach sits within the range (Source: Adapted from Speed et al., 2020, based on Poff et al., 2017) The UEA method has subsequently been used to review and revise environmental water requirements in the northern Basin. The revision incorporated a stronger evidence base, and incorporated two ecosystem functions (longitudinal and lateral connectivity) to link ecological targets and values to site-specific flow indicators (Boulton & Thompson, 2016; MDBA, 2016a, 2016b). Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 47 Box 11: Challenge - Climate change and changing water availability Although the Water Act and Basin Plan aim to ‘protect and restore’ the Basin’s ecosystems, much of the work done towards this objective has rested on assumptions of hydrological stationarity and reference to natural flow regimes. Climate change presents substantial challenges to this approach by increasing uncertainties surrounding water availability and demand, as well as driving changes in ecological features. Environmental water management approaches developed with primary reference to historical patterns in flow and ecology may become unfeasible. Climate change is recognised as a significant risk in the Basin Plan, but it was not taken into account in setting the SDLs. In the Basin, water availability is expected to decrease as a result of climate change, which will stretch the flexible allocation mechanisms and lead to reduced water for the environment and for other water users. It will also likely lead to increased occurrence of poor water quality events such as blue–green algae and blackwater events. Therefore, over time, tensions over water access can be expected to rise, with low-reliability water allocations being affected first (the majority of environmental water holdings). New approaches or modification of the SDLs may be required to allow management for resilience and continued delivery of environmental flows. The impact of climate change on the SDLs will be considered and a subject of the scheduled review of the Basin Plan in 2026. The MDBA applied a hydrologically modelled approach to determine the ESLT. It was intended that the method to determine the ESLT would meet the following objectives (MDBA, 2011): • The approach should provide an estimate of the long‐term average reduction in diversions required to achieve specified environmental objectives and targets related to an ESLT. • The approach should be scientifically robust, transparent and able to be understood by a wide audience. • The approach should take into account the spatial and temporal variability in flows and environmental water needs across the Basin. • The approach should be compatible with contemporary water management in the Basin. • The approach should give greatest attention to those issues with the greatest sensitivity to the ESLT to reduce uncertainty. The method used to determine the ESLT is shown in Figure 12. It is openly acknowledged that the ESLT and SDLs were not determined as a precise science. Rather, it was intended that the ESLT be implemented within an adaptive management process, where new information can be taken into account at a number of key steps. It is also important to note that, in determining an ESLT, the Basin Plan is not required to return the river system to a ‘pre-development’ or pristine state; rather, the Basin is described as a ‘working river’. The approach to determining the impact of different water recovery options on key environmental assets, ecosystem functions and achievement of broader environmental outcomes was undertaken within that context. Valuing water: The Australian perspective 48 Environmental values of water in the Murray-Darling Basin Figure 12. Overview of the method used to determine the environmentally sustainable level of take in the Murray-Darling Basin (Source: MDBA, 2011) The framework for setting an ESLT and SDLs for the Basin Plan was heavily reliant on an accurate assessment using hydrological models. Although the modelling method allowed testing of a variety of environmental water requirements and ESLT volumes, it was entirely dependent on two key scenario inputs: the SDLs and the flow indicators. The environmental water requirements (determined through the UEA approach discussed above) were modelled for the indicator sites to inform model runs that tested the achievement of outcomes and impacts of different water recovery scenarios. Three options were modelled to determine the range of outcomes (and impacts) and to see what could be acceptable to Basin communities. The options modelled are shown in Table 2. Table 2. Sustainable diversion limit (SDL) options modelled SDL option Scale of water recovery considered No SDL No reduction in consumptive use of Basin water resources 10,423 GL/y Proposed water recovery of 3,200 GL/y 10,873 GL/y Proposed water recovery of 2,750 GL/y (or 2,800 GL/y for the purposes of economic and hydrological modelling) 11,223 GL/y Proposed water recovery of 2,400 GL/y Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 49 Extensive analysis was undertaken before the MDBA proposed an ESLT of 10,873 GL/y, which qualitatively aimed to ‘optimise environmental, economic and social outcomes to achieve a healthy working basin’(MDBA, 2011, 2012b). This represented the recovery of 2,750 GL/y of surface water for environmental purposes, and a water recovery target of 40.4 GL to meet SDLs in two Queensland groundwater SDL resource units (MDBA, 2012b) compared with the 2009 baseline. In determining the surface water SDL, the MDBA took into account concerns raised through the consultation process. After reviewing the submissions, the MDBA considered that the science base underpinning the surface water SDL was robust (MDBA, 2012b). Several independent reviews of development of the ESLT and SDLs have been undertaken because of their importance in ensuring that sufficient water is available for the environment. A 2011 review by CSIRO (Young et al., 2011) provides two important insights. The first is that the setting of SDLs involves consideration of social and economic objectives, as well as environmental objectives. Therefore, assessing the adequacy of the SDLs is not just a question of scientific robustness but also of policy judgments made in the context of the requirements of the Water Act, and reflecting multiple trade-off decisions between the environment, economics and social outcomes. The second insight is that, despite some gaps in understanding, there was sufficient scientific knowledge to make an informed decision on an ESLT, particularly in the context of the adaptive management framework being adopted for implementation of the Basin Plan. Box 12: Tensions - A negotiated outcome The development of SDLs has been a negotiation. This has meant that trade-offs and political interventions have been a necessary part of developing SDLs. They are a compromise, aiming to be acceptable to most people, rather than being optimal for any one water user. To avoid winners and losers, the approach aims to offset the impacts for those negatively impacted, but this has not always been successful. The negotiated outcome means that there are likely to be ongoing tensions between those who believe they have lost out compared with others. In the Basin, groundwater plays an important role in sustaining environmental values. Therefore, SDLs have also been set for 80 groundwater units in the Basin (which are then compiled into 19 groundwater resource plan areas). The approach for setting groundwater SDLs, while following the same principles, had to take a slightly different approach for several reasons: • Identification of groundwater areas. Because groundwater units are less easily defined than surface water catchments, identification of what areas would be worked with took some time. The number of groundwater SDL units changed across the various iterations of the Basin Plan, until the final number of 80 was established. • Establishing a baseline. A baseline for surface water extraction had been set by the 1995 cap on surface water extractions, but there was no equivalent baseline for groundwater. The MDBA therefore developed a set of rules to establish the baseline groundwater extraction, which took into account existing management plans, licences and cross-border agreements. • Groundwater modelling. Groundwater SDLS were informed by groundwater modelling. Unlike surface water models, which covered most of the Basin, groundwater models were not as widely available and therefore only covered 13 of the 80 groundwater units. For the remaining units, a recharge risk assessment method was used instead. Modelling of groundwater in the Basin continues to be a challenge. Valuing water: The Australian perspective 50 Environmental values of water in the Murray-Darling Basin Box 13: Challenge - Connectivity between surface water and groundwater resources As is the case in many parts of the world, the connectivity between surface water and groundwater resources in the Basin is not fully understood. Early criticism of the Basin Plan suggested that it did not adequately take into account the interactions between surface water and groundwater, or groundwater-dependent ecosystems (e.g. wetlands, low-flow streams). For example, an independent group of scientists suggested that the failure to include the impact of rising groundwater extractions in surface water modelling had impacted the validity of the surface water SDLs. Given these challenges, the MDBA committed to undertaking further research and investigations. The groundwater SDLs have since been reviewed. In Basin Plan amendments made in July 2018, the groundwater SDLs were changed to accommodate boundary changes, and improved modelling and understanding of groundwater systems and their connections to surface water. However, there are still gaps in our knowledge, and further updates may be required as we better understand the environmentally important interaction between surface water and groundwater in the Basin. From the ESLT and SDLs adopted, it is expected that whole-of-Basin environmental outcomes could be achieved. Although flow indicators and environmental water requirements were used to inform the ESLT, the method does not specify a detailed environmental flow regime that must be delivered. Rather, it estimates the minimum amount of water that will enable the achievement of an ESLT and Basin-wide environmental objectives. As described in the ESLT method: Ultimately, the environmental outcomes achieved through the Basin Plan will also be dependent on the environmental flow decisions made at a regional and local scale, in response to future climatic conditions and ecological responses.( MDBA 2011. The Proposed ‘Environmentally Sustainable Level of Take’ for Surface Water of the Murray–Darling Basin:Method and Outcomes. Canberra, Australia: Murray-Darling Basin Authority, 2011) The annual diversion limit will vary depending on inflows each year; management priorities of water for the environment will also change based on availability. Water delivery to achieve the environmental outcomes will need to ensure that water is in the right place, at the right time, at the right quality. This is done through the allocation, planning, prioritisation and use of water for the environment. Box 14: Challenge - Realistic and achievable environmental outcomes? In setting the ESLT and SDLs, a number of Basin-wide environmental outcomes were proposed. These outcomes are now within the Basin Plan as targets or environmental outcome measures. They are often expressed as overarching ‘motherhood’ style statements, not SMART (specific, measurable, achievable, relevant, time-bound) measures. This ambiguity, recognised as an issue in recent reviews (MDBA, 2020c), poses a challenge in evaluating progress towards the targets and raises the question ‘Are the outcomes really achievable in the first place?’. The response to this question, managed by the MDBA, has been to add an additional layer of environmental outcomes within the BWEWS, in which SMART principles have been used to add further specification, quantification, time dependence and achievability to several key environmental features listed in the Basin Plan objectives. The BWEWS is an evolving document, and these SMART objectives are being actively refined over time. Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 51 4.4 Mechanisms that realise the value of environmental water 4.4.1 Enact limits on the ecologically sustainable level of take Box 15: Key points • Setting limits on extraction is a long-established mechanism used in the Basin to protect environmental values. • Limits have been established based on the ‘long-term average annual yield’ for all surface water and groundwater catchments. • The SDLs were established and came into effect in July 2019 when they were immediately adjusted; they are now required to be implemented in full by 2024. The Water Act 2007 required that SDLs for Basin water resources reflect an ESLT. An ESLT is the level at which water can be taken from a water resource without compromising key environmental assets; key ecosystem functions; and the productive base of, or key environmental outcomes for, the water resource. Methods to determine the ESLT and SDLs are discussed in Section 4.3. Allocation of water for environmental benefit is achieved first through the establishment of SDLs on consumptive take from both groundwater and surface water. SDLs came into effect in 2019 for each of the 29 surface water areas and 80 groundwater areas of the Basin. The SDLs define how much water can be taken from rivers and groundwater for urban water supply, irrigation and other economic activities, and household use (consumptive uses). The remainder is dedicated to the environment to achieve the environmental outcomes outlined in the Basin Plan. The amount of water available for allocation changes from year to year, and depends on storage levels and weather conditions. SDLs and water recovery targets were adjusted before 1 July 2019. The initial SDLs in the Basin Plan required recovery of 2,750 GL/y from consumptive use by 30 June 2019. To achieve this target, the Australian Government committed AU$8 billion to purchasing water entitlements directly and to investing in irrigation infrastructure (PC, 2018). During the development of the Basin Plan, Basin water ministers requested the inclusion of an adjustment mechanism in the plan to ‘allow for better social, economic and environmental outcomes than would otherwise be achieved by the Basin Plan’ (DAWE, 2020b). To provide flexibility, the Basin Plan included a mechanism to adjust the SDLs to achieve equivalent social, economic and environmental outcomes with less water recovery. The mechanism enables adjustment of the Basin-wide SDL (up or down) by no more than 5 percent (approximately 543 GL/y). Environmental, social and economic outcomes are not to be compromised by this adjustment. All SDL adjustment mechanisms are required to be ready for operation by 30 June 2024. In the southern Basin, the SDL adjustment mechanism involves three elements that work together to reduce the volume of water needed to be recovered and to achieve ‘equivalent’ water for the environment through savings (PC, 2018): • Supply measures—allow for achievement of equivalent environmental outcomes with a lesser volume of water. Examples are using pumping stations, regulators and levees to deliver water to lakes and floodplains without the need for large volumes of water needed to create overbank flooding. Valuing water: The Australian perspective 52 Environmental values of water in the Murray-Darling Basin • Constraints easing—overcome some of the impediments to delivery of environmental water down the system. They can include changes to physical features such as road crossings and bridges, as well as negotiating easements where private land is flooded. • Efficiency measures—achieve enhanced environmental outcomes above those achievable with legislated water recovery target by recovering additional water for the environment with neutral or improved socioeconomic outcomes. Efficiency projects are activities that change water-use practices (e.g. reducing evaporative losses in the transfer and use of consumptive water), creating water savings that can be transferred to, and used by, the environment. In the northern Basin, the water recovery target was reduced from 390 GL to 320 GL on the proviso that the Australian, Queensland and New South Wales governments implement a series of ‘toolkit measures’. These measures aim to target water recovery, protect environmental flows, improve the coordination and delivery of environmental water, ease constraints on environmental water delivery in the Gwydir River and construct works to improve fish passage (PC, 2018). Following the amendments to the Basin Plan, the Basin-wide surface water recovery target is 2,075 GL/y and 62 GL/y of efficiency measures (Figure 13). Figure 13. Summary of water recovery under the Basin Plan (Source: Water for the Environment Special Account Review Panel, 2020) Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 53 Meeting of the SDL adjustment mechanism requirements and 2024 delivery timeframe is at risk. Recent reviews have highlighted that the progress to fully implement the SDL adjustment mechanisms is significantly behind schedule (MDBA, 2020c; Water for the Environment Special Account Review Panel, 2020). Without urgent commitment to deliver the SDL adjustment mechanism projects, the northern Basin toolkit measures and the remaining water resource plans, which are yet to be accredited, the full benefits for Basin communities and environmental values cannot be delivered (MDBA, 2020c). As noted, the initiatives are complex and require much more than an engineering solution: The challenges of recovering the additional 450 GL for the environment and easing or removing constraints on delivering environmental water are intertwined with the broader challenges in the Basin, which are reflected in the suite of measures, initiatives and numerous reviews associated with the Basin. (Water for the Environment Special Account Review Panel, 2020) In response to this finding, the Australian Government announced the closure of the on-farm water efficiency program for any further applications on 3 March 2021. Work continues in partnership with local communities to design and implement an efficiency and constraints program to meet the targets. 4.4.2 Recover water for the environment Box 16: Key points • The majority of water for the environment has been recovered through direct purchase of water entitlements. • Water buyback was halted in 2013, and water recovery is now being implemented through investments in water infrastructure modernisation. • There are several challenges to the attainment of water supply savings through supply and efficiency measures. • Implementing the SDLs in full by 2024 is at risk. Approximately 20 percent of all water entitlements in the Basin available for consumptive uses such as irrigated agriculture a decade ago are now managed for the environment. As at 30 June 2021, the water recovered for the environment under the Basin Plan is 2,106.9 GL/y (MDBA, 2021). Although the total amount of water recovered across the Basin is higher than the overall target of 2,075 GL/y, local and shared water recovery targets have not yet been met in some water resource areas. The 2020 Basin Plan evaluation (MDBA, 2020c) estimated that the contracted groundwater recovery in the Basin, at 30 September 2020, was 35.2 GL/y, with only a further 3.2 GL/y required to meet the target. A number of tools for recovering water for the environment were applied in the Basin: buyback, infrastructure modernisation (off-farm) and on-farm efficiency savings. An overview of the water recovery tools is provided in Table 3. Valuing water: The Australian perspective 54 Environmental values of water in the Murray-Darling Basin Table 3. Tools used to recover water for the environment in the Murray-Darling Basin Water recovery tool Water recovery achievements Economic effect of tool Bridging the gap Government buyback Open tender Simplest and least expensive method of of entitlements recovering water for the environment 149.8 GL in the northern Basin through open tender Reduces the supply of water available for and/or strategic 822.4 GL in the southern Basin irrigation, which can increase allocation purchase Limited tender prices, unless proportional reduction in 59.8 GL in the northern Basin the demand for irrigation water 140.2 GL in the southern Basin Price increase more likely where irrigators participating in the buybacks do not decommission irrigation infrastructure Savings obtained 75.1 GL in the northern Basin Rationalisation of irrigation areas has through modernised advantages but can be difficult to implement 614.5 GL in the southern Basin infrastructure Off-farm water recovery has less effect on (on-farm and allocation prices but may be becoming off-farm) harder to find Efficiency measures Efficiency savings 1.9 GL in the southern Basin Participants receive funds for making (on-farm) changes to their farms that improve water-use efficiency in exchange for a portion of their water entitlements Potential to generate significant private benefits for recipient farms through higher productivity and profitability On-farm recovery has the largest effect on allocation prices Sources: DAWE (2021) (water recovery achievements, as at 30 September 2021); Whittle et al. (2020) (economic effects) The strategy for the remaining water recovery prioritises investments in water infrastructure, rather than water purchase. Initial water recovery was primarily achieved through direct purchase from willing sellers undertaken through open tenders (buyback), direct negotiation (i.e. strategic purchase) or arrangements with states. In 2013, the Australian Government announced that it would not be undertaking any further water purchases and imposed a legislative cap of 1,500 GL on surface water purchases in 2014. Recovering water through infrastructure modernisation is intended to mitigate the impact of water recovery by helping maintain irrigated agricultural production and injecting capital into the regions. While water availability is similarly reduced, this approach effectively attempts to mitigate structural change and minimise adjustment pressure on communities (PC, 2018), and provide environmental benefit. Since 2013–14, recovery of water through infrastructure projects has influenced the slow progress to recovery targets (Figure 14). Recent estimates suggest that the water allocation price effect of water recovered through on-farm irrigation infrastructure projects is likely to be around double that of buybacks, per unit of water recovered (Whittle et al., 2020). Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 55 Figure 14. Shift in recovering water through infrastructure projects, as opposed to buybacks (Source: Whittle et al., 2020) Accounting for water recovery is a complex process. Water recovered for the environment is typically converted into the environmental entitlement, held by the CEWH. The CEWH then uses recovered water to protect and restore the Basin’s environmental values. The recovery amount is an estimate of the long-term average annual use by the portfolio of water entitlements that have been recovered (MDBA, 2021) (see note below on definition). This estimate is calculated by applying a set of long-term diversion limit equivalence factors15 to the water entitlement volumes. Factors vary from state to state and consider such things as storage sizes, historical climate patterns, water resource plan rules, assumptions about irrigator crop selection and expected usage pattern (MDBA, 2021). The factors will be used to determine if the water recovery required in each valley has been achieved, as required under the Basin Plan to meet the SDLs. A note on the difference between GL LTAAY and GL of entitlement (Water for the Environment Special Account Review Panel, 2020) Long-term annual average yield (LTAAY) is a method used to standardise the calculation of expected water recoveries from the 150 different water access entitlement categories and across catchments in the Basin. For example: • 100 GL of NSW Murrumbidgee high-security entitlement represents 97.7 GL LTAAY. • 100 GL of Victorian Goulburn low-reliability entitlement represents 58.3 GL LTAAY. LTAAY is relevant for measuring progress of water recovery towards meeting the SDLs set out in the Basin Plan. Unless specified, GL LTAAY is used within this case study. Long-term diversion limit equivalence factors are used to convert the nominal volumes of various different classes and reliability of 15  entitlements acquired through water recovery to a common currency of the long-term average volume of water estimated to be available from each entitlement class. Planning assumptions were key inputs to the development of these factors. Valuing water: The Australian perspective 56 Environmental values of water in the Murray-Darling Basin 4.4.3 Allocate water for environmental use Box 17: Key points • Environmental water entitlements have the same rights and must follow the same rules as consumptive entitlements. • Environmental water entitlements in the Basin are held by the CEWH, by individual Basin state governments and through joint governmental agreements. • Characteristics of a balanced environmental water portfolio are different between the highly regulated southern connected Basin and the northern Basin. The Australian Government and state governments own the environmental entitlements to water in the Murray-Darling Basin. Water entitlements are transferred from consumptive use to the ‘held’ water portfolio of environmental water holders to be actively managed to achieve the environmental objectives of the Basin Plan. Recovered water for the environment must be managed in accordance with Basin Plan requirements, and seek to maintain and improve environmental outcomes in the Basin. The majority of the water held for the environment in the Basin is managed by the CEWH. The CEWH is an independent statutory position established under the Water Act 2007 to manage environmental water holdings of the Australian Government, for the purpose of protecting or restoring environmental assets, including within the Basin (CEWO, 2013). The CEWH leads, and is supported by, the Commonwealth Environmental Water Office (CEWO), a division of an Australian Government department. Commonwealth environmental water holdings are tradeable water rights acquired through the Australian Government’s Water for the Future initiative. These rights are granted by the respective state governments. Commonwealth environmental water is managed under the same trading and carryover rules, and charged the same fees, as equivalent consumptive entitlements (CEWO, 2013) (Figure 15). Figure 15. Commonwealth environmental water holdings as at 12 August 2021, comprising a total 2,876 GL of registered entitlements with a long-term average annual yield of 1,989 GL (Source: Data from CEWO at 31 August 2021, CEWO, n.d. Figure by A. Wealands) Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 57 Commonwealth environmental water is only one of a number of sources of environmental water across the Basin. There are other environmental water entitlements, such as those held by state governments and managed by the MDBA under the Living Murray initiative. At 30 June 2019, the total volume of water for the environment held in the Basin was 3,032 GL/year (SCBEWC, 2020). Some of this water was recovered before the Basin Plan, and the vast majority (82 percent) of these entitlements (2,481 GL/year) are held in the southern connected Basin. Not all water for the environment is in ‘held’ environmental entitlements. Environmental entitlements make up a relatively small volume of the total water available or reserved for environmental use in the Basin. There are also significant volumes of environmental water managed by state governments through the rules in water resource plans (referred to as ‘planned’ environmental water in Section 4.4.4). Each state uses different mechanisms to set aside, use and protect this water. For example, Victoria has adopted an ‘environmental water reserve’ that includes three components: environmental entitlements, passing flow obligations on bulk entitlements, and ‘above cap’ water (DELWP, 2019): • Passing flows are the minimum flows an entitlement holder must pass at a weir or reservoir before taking water for other purposes. Passing flow requirements are specified as obligations in entitlements, and entitlement holders must report on their compliance with these requirements. • Above cap water is water that remains in a river after limits on diversions have been reached, as well as spills from storage and unregulated flows that cannot be kept in storage. It makes up 95 percent of all water for the environment in Victoria and is the most vulnerable to drying conditions. Planned environmental water was largely in place under water-sharing arrangements before the Basin Plan. It has formed part of the baseline conditions used to determine the SDLs and water recovery targets, which is why the water resource plans must ensure no reduction in planned environmental water. 4.4.4 Embed environmental values into water resource planning Box 18: Key points • Providing environmental water in the Basin has required amendments to water resource plans. • Common Basin-wide environmental objectives are given effect in both long-term environmental watering plans and annual priorities and plans. Planning for water use focuses on multiple objectives, targets and desired outcomes. A hierarchy of objectives, targets and outcomes from environmental watering is provided in the Basin Plan (see Figure 16). The Basin Plan contains broad, high-level environmental objectives—for example, ‘to protect and restore water-dependent ecosystems of the Murray-Darling Basin’—which become more specific and measurable down the hierarchy. At a Basin scale, several key environmental outcomes are specified to facilitate improved management and evaluation of success. The lowest level of the hierarchy contains objectives and targets for specific catchments and environmental assets, developed by states in long-term watering plans. These may include details about operational matters, such as environmental flow delivery (Gawne et al., 2021). Planning instruments, including regional water resource plans, long-term environmental watering plans, and annual plans and priorities, all need to give effect to these objectives, targets and outcomes. Valuing water: The Australian perspective 58 Environmental values of water in the Murray-Darling Basin Figure 16. Hierarchy of environmental objectives established for the Murray-Darling Basin (Source: Gawne et al., 2021) Regional water resource plans (WRPs) are a key instrument in implementing the SDL in catchments and in ensuring that Basin states consistently address key elements of the Basin Plan, such as critical human water needs; environmental water planning, delivery and management; and salinity and water quality. WRPs are developed at a catchment (water resource region) scale and enable new water-sharing arrangements to come into effect. Importantly, WRPs must be prepared having regard for the management and use of any water resources that have a significant hydrological connection to the water resources of the plan area. Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 59 Although the WRP covers all water use, it is an important mechanism to protect and enable achievement of environmental water requirements from planned environmental water. Section 10.28 of the Basin Plan states that ‘a water resource plan must ensure that there is no net reduction in the protection of planned environmental water from the protection provided for under state water management law immediately before the commencement of the Basin Plan’. Defining planned environmental water (from MDBA position statement 3A, issued 14 August 2015) Planned environmental water (PEW) is water which meets the following criteria: • the water is committed by a plan made under a State water management law or any other instrument made under a law of a State, or is preserved by a law of a State or an instrument made under a law of a State; and • the water is committed or preserved for the purposes of achieving environmental outcomes or, in the case of committed water, other environmental purposes specified in the plan or instrument; and • the water cannot, to the extent to which it is committed or preserved for such purposes, be taken or used for any other purpose. Note - No PEW is committed by the Basin Plan. Each state is responsible for developing and implementing WRPs in consultation with their communities and stakeholders. The MDBA is responsible for accrediting the plans. Despite significant efforts to meet the 2019 deadline, a number of WRPs from New South Wales are still in development. WRPs must provide for the coordination of environmental watering events between connected WRP areas in the southern Basin. This requirement enables environmental water to be protected (or ‘shepherded’) while it is en route to target environmental watering sites. The plans give effect to coordination requirements through implementation of ‘prerequisite policy measures’ (PPMs, also referred to as ‘unimplemented policy measures’ in the Basin Plan), which provide (PC, 2018): • credit for return flows from environmental watering events for environmental use downstream (rather than being used to supply the demands of other users) • the ability for environmental water holders to order water from a specific storage to top up or ‘piggyback’ on naturally occurring high-flow events. PPMs were assumed in the original modelling to establish the SDLs, as well as in the model used to determine the environmental equivalence of supply measures. If PPMs are not implemented, overall water recovery would need to rise considerably when reconciliation of the total water recovery target is completed in 2024 (PC, 2018). WRPs must provide for environmental watering consistent with the multiscale environmental water management framework (EWMF) applied across the Basin. The EWMF is designed to align with broader water resource plans for each region to ensure that environmental water use is in line with other user needs and requirements. The EWMF provides common principles and methods, while also allowing for regional variation and different coordination in each jurisdiction or region. The EWMF combines both bottom-up and top-down approaches over three timescales: long-term (5–10 years) environmental water plans, annual (and multiyear) environmental water priorities and plans, and real-time delivery and management of environmental water. The long-term planning architecture and instruments are summarised in Figure 17. Annual plans and priorities are discussed further in Section 4.4.5, and real-time delivery in Section 4.4.6. Valuing water: The Australian perspective 60 Environmental values of water in the Murray-Darling Basin Note: The blue box is not a formal requirement of the Basin Plan. However, it is an essential set of planning tools to inform planning at a Basin-wide scale. Figure 17. Long-term environmental watering planning architecture (Source: PC, 2018) The long-term strategy for achieving environmental water outcomes described in the BWEWS is assisting state and local water managers to achieve broader outcomes. The BWEWS is prepared by the MDBA in consultation with Basin states and the community. The BWEWS specifies the expected outcomes for river flows and connectivity, native vegetation, waterbirds, and native fish over the next decade, and sets out several management strategies to maximise the likelihood of achieving them, given the SDLs and operating rules and procedures in place (MDBA, 2019). The expected environmental outcomes were developed using the SMART approach—that is, they are specific, measurable, achievable, relevant and time-bound (Gawne et al., 2021). Recent reviews on progress in implementing the Basin Plan, and a review of the environmental watering plan of the Basin Plan (Chapter 8) noted the usefulness of the BWEWS: The Commission considers the BWEWS to be a useful part of the Basin Plan’s environmental planning framework. It provides strategic direction on the expected outcomes of environmental watering and the policies and principles for making environmental watering decisions across the Basin. The formal articulation of specific Plan environmental objective and expected outcomes through the BWEWS will become an increasingly useful yardstick against which the effectiveness of environmental water management can be measured. (PC, 2018) Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 61 The BWEWS is part of the Basin Plan adaptive management framework and is updated every 5 years. Now in its second edition, the BWEWS includes new information and considers updates to broader water management arrangements that influence environmental outcomes. Without this tool, outcomes would be open to interpretation by individual environmental managers, and Basin-scale coordination of watering priorities would prove challenging. Finer-scale plans for each WRP region and individual environmental assets are developed locally and are regionally relevant. Regional translation of Basin-wide environmental outcomes and watering strategies is done through the development of regional and asset-scale plans. The plans are developed by local and state environmental water managers in consultation with local communities and stakeholders. Box 19: Success - Embedding environmental values into water resource planning Embedding environmental values and requirements into broader water resource planning provides the framework for long-term commitment to delivery. In the Basin, environmental values and water requirements were first established through state-based sub-basin plans, then later enhanced by the Basin Plan. This allowed community engagement and consideration of the preferred balance across social, economic and environmental objectives, as well as ensuring statutory protection of environmental water. 4.4.5 Prioritise use of environmental water Box 20: Key points • Prioritisation of environmental water use is based on principles that are common across the Basin. • Annual Basin-scale priorities are published, and environmental water use must have regard to these priorities. • A seasonally adaptive approach is used to prioritise environmental water use. Environmental watering is managed in accordance with a common series of principles. The 11 principles, outlined in the Basin Plan, aim to ensure consistency in watering priorities and approaches at different scales and by different water holders across the Basin (see Attachment 3 for a full list). For example, the principles call for application of a precautionary approach and collaboration with local communities. The first principle calls for prioritisation of environmental water use to be guided by Basin-scale annual environmental watering priorities. Similar to the environmental water planning described above, this creates a nested structure in which Basin-scale priorities inform prioritisation for held and planned environmental water at the WRP scale, which then informs priorities at the asset scale (Figure 17). The MDBA prepares the Basin-scale annual environmental watering priorities. Water holders and Basin governments then undertake catchment (regional)-scale prioritisation informed by the regional long-term watering plans and the Basin-scale annual environmental watering priorities (Figure 18). These priorities are published annually, at both regional and Basin-wide scales. It is expected that priorities align from local to regional to Basin scales. Valuing water: The Australian perspective 62 Environmental values of water in the Murray-Darling Basin NRM = natural resource management Figure 18. Interaction between strategies and annual watering priorities at the Basin and watering plan unit scales (Source: Alluvium Consulting, adapted from PC 2018, Murray-Darling Basin Plan: Five- year assessment) Following establishment of environmental watering priorities, annual planning is required at the Basin, regional/catchment and asset scales: 1. Basin scale – Basin annual outlook – portfolio management planning strategy 2. WRP region / catchment scale – annual water use plans – annual portfolio management plans – river annual operating plans 3. asset/site scale – site watering proposals. At each scale, annual planning and prioritisation consider seasonal conditions and variability, as well as the longer-term strategy and inputs from First Nations people. Priorities change depending on the water availability outlook and condition of environmental values. A seasonally adaptive approach has been adopted across the Basin for planning. Initially established by the Victorian Environmental Water Holder in response to extreme dry conditions, the approach considered four key planning scenarios ranging from drought to very wet (Figure 19). Annual priorities and objectives depend on which scenarios are likely to occur. Protecting assets is the key objective in drought, but this is expanded to enhancing environmental condition when a wet to very wet year is forecast. This approach, adopted in annual planning and prioritisation at different geographic scales, allows for a seasonally adaptive planning approach that responds to climate variability. Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 63 Figure 19. Examples of environmental watering objectives under different planning scenarios, illustrating the seasonally adaptive approach to planning used in the Murray-Darling Basin (Source: VEWH, 2015) Although much planning occurs, many decisions regarding environmental water delivery events are made in real time. Annual planning undertaken by environmental water holders establishes the priorities for water use in that year under a range of water availability scenarios (see Section 4.4.5), but the actual deployment of environmental water during the year depends on the weather and consequent streamflow conditions (PC, 2018). This highlights the importance of open coordination arrangements between river operators, environmental managers and local asset managers to ensure that decisions made achieve the best outcome for the watering event. Engagement with local communities on the planning and use of environmental water is coordinated at a local scale. Each region coordinates the input of community groups and stakeholders to watering plans and priorities (Figure 19). Groups engaged through this process include Traditional Owners, Aboriginal groups, tourism operators, local business councils, angling groups, environmental advocates, irrigators and other farming groups. Through this engagement, environmental watering plans identify potential alignment of watering with realising other cultural, social and economic benefits. 4.4.6 Use of environmental water Box 21: Key points • Environmental water can only be delivered if there is water available—the same as other water entitlement holders. • Easing constraints on the delivery of water is required to achieve many of the water requirements for environmental values. • Coordination of environmental watering is an ongoing focus of efforts to realise broader benefits of environmental watering. • Providing environmental water in the Basin has required amendments to water resource plans. • Common Basin-wide environmental objectives are given effect in both long-term environmental watering plans and annual priorities and plans. Valuing water: The Australian perspective 64 Environmental values of water in the Murray-Darling Basin Environmental water entitlements can be used in three ways: deliver, carryover and trade (MDBA, 2020): 1. Delivery—deliver water to a river or wetland to meet an identified demand (physically get water to the users who have ordered it). This includes providing water to state storages (in some cases), individual irrigators and environmental water holders. It involves managing the flows and connections of water in the river system. This is done jointly by the MDBA, the states and state partners, by operating infrastructure in the river system. 2. Carryover—leave water on the accounts and carry it over for use in the next water year (an unused water allocation, or part of an allocation, that the water entitlement holder saves for the next water year). Carryover gives a water entitlement holder a right to a share of space in storage dams and the right to retain any unused water for use in a later year. 3. Trade—trade water by selling water and using the proceeds to either buy water in another catchment or in a future year, or to invest in complementary environmental activities (buying and selling water entitlements and allocations). Anyone holding water rights can trade entitlements and allocations freely, except where there are physical constraints (such as geography or lack of connections to the system that are managed by trading rules) or water supply considerations. Delivering water to environmental assets in the past decade has been a high priority (where water has been available) to realise environmental benefits. Most of the volume of held environmental water entitlement allocations is delivered in a given year. Annual allocations for the CEWH entitlements have typically been within 1,400–1,800 GL (with an average carryover of around 35–40 percent of allocation). Of this, they have typically delivered 800–1,450 GL annually (Figure 20). Note: Carryover against the Commonwealth’s regulated southern connected Basin entitlement into 2020–21 was 267 GL. This equates to 18 percent of the aggregate southern connected Basin entitlement of 1,525 GL where carryover rules apply. The maximum allowable carryover within state carryover rules against these entitlements is 1,064 GL, or approximately 70 percent. In the northern Basin, carryover against the Commonwealth’s regulated surface water entitlement into 2020–21 was 54 GL. In the northern Basin, most catchments have continuous accounting rules, and there are no carryover limits applied at the end of a water year. These rules are designed to provide capacity for substantial carryover for all entitlement holders because inflows and allocations are more variable than in the south of the Basin. Figure 20. Commonwealth environmental water availability and use (Source: CEWO, n.d) Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 65 Environmental water can only be delivered if there is water available, the same as other water entitlement holders. River operating rules, flow constraints and climatic conditions influence the decisions on how to use available environmental water entitlements each year. Trade of environmental water entitlements can be used within a robust policy framework that achieves the greatest environmental benefits for the water involved. Trade can only be applied on the open water market when the volume held in an account is excess to environmental requirements and there is no risk of harm to ecosystems if environmental water is not provided in the near term (CEWO, 2020). In recent years, trade of environmental entitlements has only occurred in small volumes—since 2009, the CEWH has sold 60.7 GL of allocation water; since 2011, the Victorian Environmental Water Holder has bought or sold a small amount of water allocation each year (Doolan et al., 2017). This is less than 1 percent of the total volume of Commonwealth environmental water delivered to the environment over the same period (Johnson et al., 2020). Although not currently widely deployed, trade can permit entitlements to be used for greatest ecological outcome. Currently in the Basin, environmental water holders use trade to move environmental water across river systems and/or between environmental water holders for environmental purposes. They can also sell environmental water allocations to consumptive users or buy water on the temporary water market where it is in line with their statutory objectives (Doolan et al., 2017). The total volume of environmental water entitlements that can be actively managed in the Basin is relatively small compared with that needed to fully meet environmental requirements. The volume of environmental water that a manager has available to actively manage is typically a relatively small percentage of the total volume of water in the system. Stewardson & Guarino (2018) observed that, in 2014–15, the volume of held environmental water delivered in the Basin was equal to only 8 percent of the total inflows to the river network. Many delivery strategies are used for environmental watering, targeting components of the flow regime to achieve greatest benefit. To maximise the benefit and efficiency of environmental water use, managers need to coordinate its delivery with other sources of water, where possible (Johnson et al., 2020). Five delivery strategies used by water holders in the Basin to enhance benefits achieved with available environmental water are outlined in Table 4. Table 4. Delivery strategies used for environmental watering in the Murray-Darling Basin Delivery How water holders in the Basin apply the delivery strategy Target component strategy of the flow regime Augmentation Environmental water is used to augment water released from Baseflows and storages for downstream non-environmental uses. freshes Possible where non-environmental water delivery occurs at an environmentally beneficial time. Note: At times, environmental water may not be required, and an environmental flow component may be fully achieved by modifying the delivery of water for downstream consumptive use. Coordination Environmental water holder coordinates water delivery with All other environmental water holders to achieve synergies with combined water delivery. Must consider organisations of different legal forms, accountabilities and capabilities, including some nongovernment organisations. Valuing water: The Australian perspective 66 Environmental values of water in the Murray-Darling Basin Delivery How water holders in the Basin apply the delivery strategy Target component strategy of the flow regime Piggybacking Used to piggyback environmental releases on unregulated flow Freshes pulses to achieve the greatest magnitude or duration of flow pulse with the minimum of environmental water. Possible when releases can be timed to align with the unregulated flow pulse, and the flood risks associated with any higher-than-expected unregulated flows are acceptable. Long travel times between dams and major tributary inputs make it difficult to use this strategy for short flow freshes. Shepherding Use of the same ‘parcel of water’ for multiple environmental All purposes as it flows downstream (Docker & Johnson, 2017). Legal provisions required to allow environmental water to be protected downstream to the Basin outlet. Assisted Use water supply infrastructure to assist with delivery of Out-of-channel delivery environmental water—for example, adjusting river stage using flows weirs, redirecting water down channels using regulators, pumping water into wetlands, and using levees to increase volume of ponded water held in floodplain wetlands. Useful when physical and policy constraints prevent the delivery of bankfull flow magnitudes using environmental flow releases. Requires significantly less water than a bankfull event may involve. Sources: Adapted from Docker & Johnson (2017); Stewardson & Guarino (2018) Removing or relaxing constraints is an important tool to allow better outcomes to be achieved when using water for the environment. A constraint is anything that reduces the ability to deliver water for the environment—including both physical restrictions such as low-lying bridges, crossings or private land, and operational aspects such as river rules or operating practices.  Even when sufficient water is made available for the environment, physical and operational constraints to water delivery can restrict the achievement of environmental benefits. These include constraints to longitudinal, lateral or vertical connectivity. For example, floodplains may not be able to be inundated because of built embankments (i.e. lateral connectivity is restricted). Although complementary civil works may be able to address this challenge, in many cases it may mean that some environmental objectives cannot be met. A Constraints Management Strategy was developed in 2013 (MDBA, 2013) to set out a process to manage and ease constraints, and a constraints measures program was established through the SDL adjustment mechanisms. Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 67 Box 22: Challenge - Addressing constraints to providing water for the environment takes time Removing or relaxing constraints is essential to the delivery of overbank and near-floodplain flows, which are important for achieving environmental outcomes in the Basin. The use of water allocations alone will not achieve the desired outcomes without addressing system constraints. The current constraints program has been slow to progress (MDBA, 2020c; PC, 2018) and is unlikely to meet the 2024 deadline. Modelling project impacts, engagement with landholders and reaching individual agreements with landholders have been reasons for much of this delay (Water for the Environment Special Account Review Panel, 2020). Early environmental outcomes of watering are evident. Ecological monitoring of watering undertaken has detected some short-term environmental outcomes. Examples of outcomes reported in 2018 (Webb et al., 2018) include the following: 1. Lower Murray—environmental water has reduced salinity in the Coorong and increased salt export through the Murray mouth. 2. Edward–Wakool—environmental water has provided refuges for aquatic fauna during low-oxygen blackwater events caused by floods in 2010 and 2016, reducing impacts on fish populations. 3. Murrumbidgee—environmental water has been crucial in helping endangered populations of the vulnerable southern bell frog to recover. 4. Gwydir—environmental water allowed the production of 1,000 tonnes of zooplankton over 90 days, providing food for fish and higher predators. 5. Warrego–Darling—environmental water has maintained flows in a system that would have otherwise dried to a series of isolated pools, maintaining food webs and stimulating fish breeding. Section 4.5 provides further information on monitoring programs in the Basin. Working together over time has improved coordination between water managers. Environmental water holders have worked cooperatively with the MDBA and Basin states towards achieving the environmental objectives of the Basin Plan. The relationship has developed and trust has grown over time through delivery of more than 750 watering events (PC, 2018). Coordination between environmental water holders has improved over time, resulting in greater environmental benefits. Coordination arrangements are being further developed through the implementation of plans and projects, including SDL adjustment mechanisms. For example, ‘enhanced environmental water delivery’ is a supply measure that aims to achieve equivalent environmental outcomes with less environmental water recovery. Efficiencies are expected to be achieved by targeting unregulated events, making timely decisions, coordinating releases, and meeting event requirements. The water saved through this project is expected to contribute to the supply measure recovery target. Valuing water: The Australian perspective 68 Environmental values of water in the Murray-Darling Basin Box 23: Challenge - Coordinating effective and efficient use of environmental water Although the Basin’s environmental water framework has allowed a significant volume of water to be returned to the environment, achieving and demonstrating effectiveness and efficiency of its delivery is a continuing challenge. For example, delivery and management of environmental water need to be coordinated across tributaries, jurisdictions, timeframes and water holders/sources. Releases need to be managed to ensure that they are not significantly reduced by conveyance losses, illegal withdrawals or reduction in flows compared with historical records on which the SDL is based. Complementary environmental works are coordinated with state natural resource management agencies. The most robust arrangements occur when legislation provides a clear direction to align water and natural resource management planning, and this is implemented through institutions and policy frameworks that draw on the expertise of local managers. The recent evaluation of the Basin Plan highlighted the importance of complementary works in finding that: the Basin Plan is not sufficient on its own in achieving healthy and resilient ecosystems in the Murray-Darling Basin. Other practical actions are needed to work alongside the Basin Plan and effective water management. Coordinated natural resources management policies, pest and weed management, regional development and structural adjustment, agricultural industry innovation and diversification, and land use planning and innovation are all essential to deliver prosperous and healthy communities, industries and environments in the Basin. (MDBA, 2020c) Box 24: Challenge - Integration with broader catchment issues and outcomes While the approach to allocating water for the environment in the Basin focused on recovery, a major challenge is how to ensure that delivery of the recovered water provides integrated outcomes. A more integrated water and catchment focus would enable consideration of mechanisms to avoid flows that should not be provided, manage riparian zones, remove fish barriers, manage pest species, manage land use that impacts on supply and quality of water, and provide improved linkages to the coastal zone. In the current Basin Plan and linked environmental water frameworks, there is no recognition of these important integrated catchment management considerations. The recent draft report on national water reform (PC, 2021b) acknowledged this gap and advised that the ‘management of environmental water should be integrated with complementary waterway management at the local level by ensuring that consistent management objectives govern both the use of environmental water and complementary waterway management activities’ (PC, 2021a). Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 69 Long-term partnerships have been established to manage conservation of environmental assets for the benefit of people and nature. A notable example of integrated approaches to managing sites in the Basin is the Nimmie-Caira project, a $180 million water-saving project in the Murrumbidgee region of southern New South Wales. The site was purchased from private landholders with water rights in 2013 under an agreement between the Australian and New South Wales governments. In 2017, a consortium led by the Nature Conservancy and including Traditional Owners (the Nari Nari Tribal Council) was successful in tendering for the future management of the 85,000 hectare site, including the internationally significant Murrumbidgee floodplain. The project comprises five components (NSW DPIE, n.d.): 1. Land and water purchase. The project purchased 19 properties on the Nimmie-Caira floodplain, together with their share of the Lowbidgee Supplementary Water Entitlement (381,000 shares). 2. Water savings to ‘bridge the gap’. Water entitlements purchased from landholders were transferred to the Commonwealth to help bridge the gap to meeting SDLs. 3. Environmental watering plan. This documents the demand for environmental water within and beyond the project area. 4. Long-term land management and water management plan. This outlines how the area will be managed in the future, with some land managed for Aboriginal cultural heritage and environmental values, and some managed for commercial use. 5. Reconfiguring the water delivery infrastructure. This enhances the delivery of environmental water across the site to benefit lands (assets) identified as having high ecological value. The integration and coordination of multiple management components through projects such as the Nimmie-Caira project are expected to realise benefits to environmental values at an asset scale. 4.4.7 Monitor and account for the use of environmental water Box 25: Key points • Monitoring water use across a large river basin such as the Murray-Darling Basin requires a range of different approaches—from site monitoring to remote surveillance. • Monitoring of, and accounting for, environmental water use present substantial challenges. Approaches to quantifying water delivered and returned to the river system from environmental assets are complex and highly contested. Ensuring compliance with the SDLs and the plans that give effect to the SDLs within the Basin is critical to ensuring that environmental water can be delivered. A range of tools are used to monitor hydrological compliance throughout the Basin. Three key tools are water meters, hydrometric network and satellite imagery. Valuing water: The Australian perspective 70 Environmental values of water in the Murray-Darling Basin Water meters are used to ensure that individual water users are complying with their annual licensed allocations. Although each state has its own metering rules and regulations, water licence holders are generally responsible for installing and maintaining an approved water meter. Where noncompliance is detected through overuse, state compliance officers will generally work with users to help meet licence conditions or to penalise the user. Complementing the individual user meters, a comprehensive hydrometric network is supported by the Australian Government. The network aims to measure water diversions and in-stream flows. This increases the transparency, consistency and accessibility of water information in the Basin, as well as informing compliance observations. With such a large area to be covered, remote monitoring technologies such as satellite imagery are increasingly being used to monitor water flow, environmental flow delivery outcomes and compliance with extraction limits. Satellite imagery provides insights into how river flows behave, and how the land and vegetation change over time. This can help inform how well an environmental water release has achieved its intended outcomes. It can also inform compliance assessments when combined with hydrological analysis and an understanding of the expected condition of the landscape or rivers, such as floodplain vegetation responses to watering events. Box 26: Tensions - Compliance and enforcement The effectiveness of Australia’s environmental water framework depends on compliance with, and enforcement of, the Basin Plan and water-sharing plans. If consumptive water users are extracting more than they have been allocated, less water is available for the environment. This is an ongoing tension in the Basin. For example, in early 2017, several media stories provided a reminder of this tension by publicising alleged large-scale water theft. New South Wales has now required larger water users to install approved meters (or confirm that existing meters meet the standard) by the end of 2019. Smaller users must install approved meters or confirm that existing meters meet the standard by 2023. Measuring environmental water delivery, especially for floodplain overbank flows, has proven challenging. Operational monitoring is undertaken for all Commonwealth environmental watering actions. This involves collecting on-ground data on environmental water delivery, such as volumes delivered, impact on the river systems, area of inundation and river levels. Operational monitoring is undertaken to: 1. ensure that water is delivered as planned (e.g. flows, area of inundation) 2. provide observations of the initial ecological response (photos and local descriptions) 3. help manage unintended consequences (unintended inundation). Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 71 Box 27: Challenge - Understanding the impact of changing return flows Accounting for environmental water delivery, use and return flows is also proving complex. A ‘return flow’ is when a portion of water used for some purpose (e.g. irrigation, watering of a wetland) returns to the river system. There are two types of return flows: runoff (surface water return flow) or seepage into groundwater (groundwater return flow). Concerns were raised that decreases in return flows due to increased groundwater extractions and irrigation efficiency projects may lead to significant reductions in river flow, offsetting the benefits of surface water recovery through the SDLs. A 2018 independent review (Wang et al., 2018) found that the environmental outcomes of the Basin Plan were not being affected by changing return flows, but that more research was needed to improve the science informing this judgment. Return flows from consumptive use are lost to that user and available to be re-regulated and reallocated by the river operator. However, it has been proposed that return flows from environmental watering (e.g. watering of an adjoining floodplain) be retained by the holder (or holders) of that water for subsequent downstream environmental uses. Such environmental water returned to the river system would not be available for reallocation by the river operator. This difference in the treatment of return flows from environmental water use and consumptive water use has the potential to create tensions among water users and stakeholders. 4.5 Learning and adaptation Box 28: Key points • Successful monitoring programs in the Basin are being deployed over a long period, linked to addressing management questions and challenges, and have resulted in strong partnerships between government agencies and scientific research. These programs require adequate funding for ongoing success. • Environmental watering plans, priorities and delivery have been adapted based on the findings of long-term monitoring in the Basin. • Monitoring and evaluation is embedded in the Basin Plan, informing a number of scheduled review points. • Multiple inquiries in recent years have examined specific areas of concern. These inquiries have fostered some uncertainty in the community about management arrangements. There is a long history of hydrological and ecological monitoring in the Basin. Many previous programs have been administered at a state, catchment and site scale. These typically had a single focus, without strong integration with broader water resource management programs, and with limited focus on identifying responses to watering regimes. They were typified by a mix of surveillance and investigative monitoring activities at differing scales and locations. Valuing water: The Australian perspective 72 Environmental values of water in the Murray-Darling Basin Environmental outcomes from watering take time to be detected and realised. It has long been accepted that the response time for environmental values is not immediate (Figure 21). Recent monitoring programs in the Basin have been designed in recognition of this concern, with a mix of immediate operational-style monitoring to detect the hydrological impact of watering (volume, extent, duration of inundation, water quality) and medium- to longer-term monitoring to detect changes in environmental condition. ConsolidaƟon phase: progressive response Response phase: strong response Lag phase: muted response Year: 2015 2020 2025 2030 2035 Note: Periods of drought may delay recovery, while wet periods may accelerate recovery. Figure 21. Illustrative environmental response to Basin Plan implementation, based on a sequence of average years (Source: MDBA, 2019) Attribution of environmental outcomes to delivery of specific watering events is an ongoing challenge to detecting and reporting changes as a result of environmental watering programs. It is particularly challenging in the context of shared delivery and allocations, and the incremental impacts of piggybacking on floodplain responses. Attribution of results continues to be a focus of the monitoring programs deployed by environmental water holders. The Basin Plan (Chapter 13) established new requirements to monitor, evaluate and report on progress to environmental objectives. Although there can be much interpretation around the implementation of these requirements (see PC, 2018), the requirement to report is driving a continued focus on monitoring outcomes of environmental watering. The Basin Plan places a number of obligations on the MDBA, Basin states and the CEWH with respect to monitoring, evaluation and reporting. For example, the CEWH is required to: • report annually to the MDBA on the identification of environmental water and the monitoring of its use (Basin Plan, schedule 12, item 9) • report every 5 years to the MDBA on the achievement of environmental outcomes at a Basin scale, by reference to the targets to measure progress towards the environmental objectives in Schedule 7 (Basin Plan, schedule 12, item 7). Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 73 The CEWO manages a long-term monitoring program to meet its needs and Basin Plan requirements. Guided by an overarching monitoring, evaluation, reporting and improvement framework for the management of Commonwealth environmental water, the CEWO established the Flow-MER Program.16 ‘The Flow-MER Program is designed to provide the critical evidence we need to understand how water for the environment is helping maintain, protect, and restore the ecosystems and native species across the Murray-Darling Basin … [and] informs management of Commonwealth water for the environment and helps meet our legislative reporting requirements through to June 2022’ (CEWO, 2020) The Flow-MER Program consists of evaluation, research and engagement at a Basin scale, and on-ground monitoring, evaluation, research and engagement across seven areas (junction of the Warrego and Darling rivers, Gwydir River system, Lachlan River system, Murrumbidgee River system, Edward–Wakool river system, Goulburn River, Lower Murray River). Outcomes from monitoring, evaluation and research have played a key role in informing adaptive management of water for the environment. Increasingly, environmental water managers are explicitly including key learnings from their monitoring programs in their annual watering plans (e.g. see CEWO, 2020). It is expected that these learnings will continue to be incorporated into the way water for the environment is managed to support adaptive management and help build knowledge. Johnson et al. (2020) noted the following examples of successful adaptive management of environmental flows in the Basin: • reducing the duration of inundation and rates of recession of flows in the Goulburn River to minimise potential degradation of the riverbanks (Vietz et al., 2018) • adapting the timing and flow rates of environmental water releases in response to field observations of large-scale native fish spawning in the Darling River (Sharpe & Stuart, 2018) • managing the release of return flows from floodplain wetlands and mitigating potential risks, in conjunction with in-channel environmental flows in the Murrumbidgee River (Wolfenden et al., 2018) • using local and expert knowledge to provide refuge flows for native fish in response to a hypoxic blackwater event in the Edward–Wakool system (Watts et al., 2018). Deeper and well-managed relationships between researchers, scientists and environmental water managers is enabling timely adaptive management. The depth of relationships developed between researchers undertaking monitoring of environmental watering and the environmental water manager was identified as a key enabler of improving environmental water outcomes. Collaborations through long-term monitoring (e.g. LTIM, Flow-MER, VEFMAP, TLM) have been beneficial to researchers, who have better access to ongoing and up-to-date information on forecasted flows from the relevant management authorities, and to practitioners, who receive field observations and verifications of their management intentions, often in real time (Johnson et al., 2020). The long experience in the Basin of developing applied research and monitoring to service the needs of environmental water management—especially the new arrangements under the Basin Plan—has highlighted the need for well-managed, applied, cross-disciplinary scientific and technical support. This carefully managed support is crucial for identifying environmental water allocations, designing monitoring and evaluation programs, conducting evaluations, and supporting methods for adjusting settings around environmental water allocations (such as the SDL adjustment process in the Basin). Previously administered as the Long-Term Intervention Monitoring (LTIM) and Environmental Water Knowledge and Research (EWKR) 16  projects. Flow-MER integrates and continues monitoring and research activities conducted within these programs. Valuing water: The Australian perspective 74 Environmental values of water in the Murray-Darling Basin There is also a need for a high level of technical, scientific and policy literacy in government sectors responsible for planning and managing environmental water allocations. This is also needed in designing, overseeing and conducting dedicated monitoring and evaluation programs to address the adaptive management needs of environmental water and values. Box 29: Success - Establishing robust monitoring programs Because environmental water delivery is still a relatively new practice, the establishment of monitoring programs (both short and long term) has enabled understanding of the impacts of delivery and informed adaptive management. Monitoring has included measures of environmental water delivery, volumes of use and return flows; monitoring of ecological (and other) impacts from the delivery of environmental water; and monitoring of compliance. Monitoring of ecological outcomes aims to demonstrate and attribute changes caused by environmental water recovery and delivery. It is designed to demonstrate Basin-wide results from particular catchment-scale or asset-scale outcomes. Monitoring of extraction and compliance by water users through metering and remote sensing is a critical component of ensuring that environmental flows achieve their desired destination. Regular scheduled reviews of progress with implementing the Basin Plan monitor the arrangements for management of water for the environment. As well as requirements to report on progress, there are scheduled reviews for plans. The environmental watering plan (Chapter 8 of the Basin Plan) must be reviewed every 5 years after the commencement of the Basin Plan, including a review of the targets for measuring progress towards environmental objectives. An independent review of Basin Plan implementation is undertaken every 5 years by the Productivity Commission. This review is conducted independently of government departments responsible for implementation. Findings of the 2018 Productivity Commission review were handed down and responded to by the government agencies involved. Of the 38 recommendations made, 23 were agreed, and Basin governments committed to act to implement these as soon as practical and report on progress (Department of Agriculture, 2019). Findings from the many reviews have highlighted areas to focus on for improvements and what has been effective. Independent inquiries have also been undertaken on specific issues of concern or interest. These have proven useful in identifying areas for improving and adapting management arrangements. For example, when a large fish death event occurred in the lower Darling in December 2018 and January 2019, an independent inquiry was commissioned to examine the underlying cause. The review found: The root cause of the fish kills is that there is not enough water in the Darling system to avoid catastrophic decline of condition through dry periods. Failure to act resolutely and quickly on the fundamental cause—insufficient flows—threatens the viability of the Darling, the fish, and the communities that depend on it for their livelihoods and wellbeing including the traditional owners, who have recognised rights and responsibilities. (Australian Academy of Science, 2019) Although reviews have identified areas for improving management, they can also create a degree of uncertainty about management arrangements in the community. Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 75 5 Lessons based on Australia’s Murray-Darling Basin experience The Australian experience in the Basin offers no simple panaceas or ideal design principles, but does suggest some general lessons for valuing and managing water for the environment. The experience outlined in this case study highlights a set of general lessons for other basins, countries or development programs aiming to recognise and embrace water’s environmental values. This case study draws on the Australian experience, specifically with the Murray-Darling Basin, and the water planning context and drivers will vary between countries. Therefore, the lessons should be taken as framing and guidance that need to be viewed through the lens of the socioeconomic and political context of a specific basin or country. The lessons discussed below are grouped under the following three themes: Recognition and acceptance Identifying environmental Implementing environmental of environmental values water policy options water policy 5.1 Recognition and acceptance of environmental values Human activities have transformed the majority of the world’s freshwater and estuarine systems— global water withdrawals increased at more than twice the rate of population growth from 1800 to 2000 (Smil, 2003; Vörösmarty et al., 2010).17 Other major drivers of water system transformation include land-use and land cover changes, major engineering interventions in water systems, and urbanisation— demonstrating a longstanding and consistent link between the alteration and impairment of inland water ecosystems and economic development (Vörösmarty et al., 2010, 2013). Providing for environmental water (or environmental flows) alongside broader catchment management allows societies to balance water for human use and development with the need to sustain the essential ecosystem services freshwater systems provide. In this context, environmental water provision contributes to building a foundation for meeting the United Nations Sustainable Development Goals (Arthington et al., 2018). Australia’s experience in developing and implementing environmental water policy in the Murray-Darling Basin has been shaped and constrained by the legacy of past decisions—particularly water resources development and the overallocation of water to irrigated agriculture. Major shifts in public sentiment, Australian politics and approaches to policy were required for the environment to become a legitimate subject of discussion and debate in the Basin during the 1960s and 1970s. It took longer for the environment to become a legitimate water user—this did not occur until the 1990s and 2000s. Implementation of environmental water policy, which has reallocated significant quantities of water to the environment, has been marked by increasing levels of tension between water users and between Basin jurisdictions since 2010. Despite these challenges, over the past decade, Australia has transferred around one-fifth of previous consumptive flows to environmental use, established the environment as a legitimate water user, and developed strong institutional arrangements to manage environmental water. Our definition of freshwater and estuarine systems includes rivers, streams, springs, riparian zones, floodplains and other wetlands, lakes, 17  fresh water–dependent coastal water bodies, including lagoons and estuaries, and groundwater systems. Valuing water: The Australian perspective 76 Environmental values of water in the Murray-Darling Basin The Australian experience in the Basin suggests the following general lessons in relation to recognition and acceptance of environmental values: Recognise the importance of water for the environment and, if possible, implement environmental water policies before any further development takes place. Early recognition of the importance of environment values alongside a deep understanding of the environmental impacts of development can help minimise future tensions and maintain long-term sustainability. Build the broad social and political support needed for enduring reform. Environmental water reforms take considerable time to demonstrate benefits, and it is difficult for water management agencies to implement and champion reforms alone. Without broad social, political and interagency support, managing the politics of change and gaining the time required to show benefit are difficult. Communication, engagement and capacity building in relevant stakeholder communities is critical for success. A well-developed understanding of water resource availability, current use, key environmental attributes and environmental impacts is foundational knowledge for stakeholders’ participation in decision making. Recognise that allocating water for the environment has social, cultural and political aspects. Environmental water policy is not only a technical or scientific problem. Conscious acknowledgment of the politics of environmental water reform and institutional transformation helps avoid political deadlock, which can block effective policy implementation. Decisions on environmental water policy may involve trade-offs or balancing with other policy areas (e.g. land-use management, regional development policy, agricultural policy, energy policy). The way environmental attributes are identified and valued is determined by cultural and social contexts, and consideration of these issues is vital in terms of adoption and legitimacy. This requires politically sophisticated and culturally sensitive approaches to mapping, understanding and engaging with all stakeholders. Identify and communicate the multiple social, cultural, economic and environmental benefits of environmental water. Organisations or individuals who use rivers for irrigation, hydropower, transport or fisheries may not recognise the broader benefits of environmental water management— for example, improved fish stocks for capture fisheries, reduced sedimentation or salinisation, and improved recreational use. Emphasise from the outset that environmental water policy is part of an overall sustainable development framework, with multiple cross-sectoral benefits (and costs). Understand that each river basin situation is different—lessons from other basins cannot be simply transplanted. The history of river basin development, including existing allocations, current politics, cultures, economic and power relations between water users, hydrology, ecology, and past and future pressures on water resources, all matter for the design of environmental water policy and its successful implementation. The experience in the Murray-Darling Basin is influenced by all these factors, and Australia is still learning how to manage them. Be ready to take advantage of ‘windows of opportunity’ to change policy, and never waste a good crisis. Major events such as severe droughts, large algal blooms and shifts in electoral politics have been very important in precipitating changes in water policy in Australia to include consideration of environmental values. Considerable prior design work had been done by experts and water agencies, which could be drawn upon to take advantage of windows of opportunity for change. Where appropriate, identify and adapt existing legal and regulatory instruments for managing and enforcing environmental water allocations and compliance. Some environmental water policy development can be usefully ‘retrofitted’ to existing policy instruments and decisions. This can aid acceptance and implementation. Consequently, consideration should be given to integrating environmental water policies into existing policy, regulatory and management frameworks, where appropriate. Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 77 5.2 Identifying environmental water policy options Australia has more than 50 years of experience in identifying and responding to the environmental challenges presented by the overdevelopment of the Basin. This has resulted in an approach to environmental water management that has reduced consumptive take of water from the Basin system and returned significant volumes of water to the environment. By the 1970s, the hydrology and ecology of the Basin’s river systems and catchments had been substantially changed as a result of nearly 150 years of primarily European settler modifications to the Basin’s landscapes and waters. Ecological restoration of such a highly modified system is a difficult, long-term task (Gann et al., 2019; SER, 2019). Change in water policy in the Basin to include environmental considerations has not been a simple linear process and is unlikely to ever be complete. It is a relatively new endeavour, and remains a dynamic and high-profile area of public policy—each success has introduced new challenges and unintended consequences, which require changes in policy and management instruments (Briscoe et al., 2011; Matthews, 2018). Identifying and implementing environmental water policy options requires both evidence gained from extensive technical and scientific studies and effective methods for the resolution of difficult values-based and political controversies that surround provision of water to the environment. National and state government institutions in the Basin continue to develop approaches to integrate scientific and technical analyses with navigation of disagreements between political actors, jurisdictions and stakeholder groups. The Australian experience in the Basin suggests the following lessons in relation to identifying environmental water policy options: Recognise that identifying environmental water policy options is a sociocultural and political task, requiring negotiation. Scientific and technical disciplines provide essential inputs into processes of identifying environmental water policy options. It is particularly useful if experts provide a range of scenarios that clarify the sets of available choices. However, final decisions are social and political ones, requiring negotiation of values, risk tolerance, trade-offs and desired outcomes. Build trust in institutions and processes when identifying and implementing environmental water policy options. The resolution of contests over the definition of ‘a healthy river’, ‘sustainability’ or the appropriate ‘balance’ between the demands of different water users requires trust in institutions, science and technical knowledge, and decision-making processes. Institutional transparency and accountability are crucial. Accept that decisions will usually need to be made under considerable uncertainty. Hydrological and ecological knowledge is usually incomplete, and key relationships (e.g. links between groundwater and surface water systems, relationships between flow and fish breeding) are often poorly understood. Similarly, considerable uncertainty may surround the costs and benefits of change. Transparency about levels and sources of uncertainty with all stakeholders is essential. Aim to develop sets of robust or ‘best-bet’ options for negotiation, but do not let uncertainty prevent decisions being made. Valuing water: The Australian perspective 78 Environmental values of water in the Murray-Darling Basin Good decision making on environmental water policy requires local knowledge, adaptation, and a commitment to monitoring and evaluation. The social and political context in which environmental water policy is made is always changing. Some uncertainties in the knowledge base for decision making will decrease over time. New information will become available that may affect prior decisions. Local knowledge is essential to inform environmental water decisions and ensure their legitimacy. An adaptive approach is needed for long-term success, particularly in the context of future climate change impacts. If possible, agree on processes for determining how environmental water policy might adapt before adaptation is required. Choose environmental policy options that work well across the range of conditions that occur in highly variable or highly seasonal systems. River basins with highly variable flow patterns, such as in Australia and many countries across the Asia–Pacific region, require environmental water management systems that can deal with the extremes—very low and very high flows. Managing water for all users, particularly during low-flow periods that extend over several years (droughts), remains a challenge in the Basin, despite innovative policy responses designed to deal with the system’s high variability. Australian experience of climate change has also shown that historical data on system hydrology may not be a valid guide to future behaviour, and testing water management proposals against a wide range of plausible future scenarios is important. Understand and acknowledge existing systems for catchment and water management, and build environmental water policy with these in mind. Effective environmental water policy needs to integrate with broader water and catchment management processes. Environmental water policy in the Basin is not always well integrated with catchment management systems; this is an area requiring significant additional policy work. There are significant differences between the Basin states in the level of integration. Successful environmental water management outcomes require integration with waterway and catchment management (Hart et al., 2021; PC, 2021b). 5.3 Implementing environmental water policy Allocation and management of water for the environment is a critical policy response to ameliorating unsustainable human impacts on freshwater systems (Arthington et al., 2018). Surface water and groundwater extraction, river fragmentation and flow regulation in the Basin have combined with the impacts of land-use change to significantly alter ecosystem functions and reduce biodiversity. Providing for environmental water (or environmental flows) alongside broader catchment management allows Australia to balance water for human use and development in the Basin with the need to sustain the essential ecosystem services freshwater systems provide. Environmental water policy in the Basin has been built on more than a century of continually developing arrangements for delivering consumptive water. It is unreasonable to expect environmental water delivery arrangements to be fully formed or at the same level of maturity after little more than a decade of experience. It will take time and a level of tolerance to develop sophistication in environmental water delivery. Valuing environmental water, and planning for its management and delivery must be informed by evidence gained from extensive technical and scientific work. It must also often resolve difficult values-based and political controversies that surround provision of water to the environment in large river basins. This requires integration of technical analyses with navigation of disagreements between political actors, jurisdictions and stakeholder groups. Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 79 The Australian experience in the Basin suggests the following lessons in relation to implementing environmental water policy: Integrate new professional groups, with new expertise and skills, into water management institutions. Design and implementation of environmental water policy requires expertise from many areas of knowledge, including ecologists, lawyers, economists, sociologists, human geographers, politicians and political scientists, policy experts, communications specialists, stakeholder groups and local communities. It requires a multidisciplinary and collaborative approach built around effective working partnerships with a wide range of stakeholders and government jurisdictions. Do not underestimate the challenges of managing water for environmental benefit in systems engineered for irrigation or hydropower purposes. Managing water for environmental benefits is a relatively new challenge. There have been significant advances in scientific understanding and institutional design in the Basin, but there is still much to be done to address the physical, social, cultural and operational issues that constrain how environmental water can be used in a system primarily designed around the needs of irrigated agriculture. Delivery of water for environmental outcomes may operate very differently from delivery for human and agro-industrial uses within the same system. System constraints and rules developed for these original uses may prevent achievement of delivery for specific outcomes, or require changes in approach. Establish specific institutions for environmental water management, with adequate power and resources. Such institutions help ensure that the environment is treated as a legitimate water user. They require influence and resources that are independent of arbitrary change. Recent reviews of some state water management agencies in the Basin have shown a systematic cultural and operational bias towards established consumptive water users, which makes effective implementation of new environmental water policy difficult. Institutions such as the CEWH help ensure parity and legitimacy for environmental water management alongside management for consumptive water users. Build institutions and nested planning processes that allow environmental water issues to be managed at the most appropriate scale. Some environmental water policy issues require basin-scale coordination, particularly in transboundary basins such as the Murray-Darling Basin. However, effective adaptive management, stakeholder engagement and specific environmental watering decisions may also be best made at more local scales. Integrating the work of institutions across these scales to deliver effective results remains an ongoing governance and coordination challenge in the Basin. Nested planning ensures consistency with Basin-scale objectives while allowing area- and site-specific values to also drive decision making. Integrate environmental water management with broader catchment management, regional development, agricultural transitions and climate change adaptation. A key lesson from recent Australian experience in the Basin is that environmental water management would be improved with better integration with other relevant policy areas. It is extremely difficult to manage for water quantity and quality targets for wetlands, riparian areas and floodplains in isolation from resource management across the whole catchment. Integrated catchment management approaches are essential for the realisation of environmental water outcomes. Valuing water: The Australian perspective 80 Environmental values of water in the Murray-Darling Basin Design monitoring, evaluation and reporting systems into policy implementation processes. Well-designed and transparent monitoring, evaluation and reporting systems are crucial to assessing success in achieving objectives, and to maintaining legitimacy, accountability and trust. Effective adaptive management requires feedback from monitoring systems. Assessment of policy effectiveness requires transparent and trusted monitoring and reporting systems to communicate progress with all stakeholders. Monitoring and assessment should be adequately resourced, question driven, adaptive and integrated into ongoing engagement with all stakeholders and communities. As competition for available water increases, monitoring and measurement of take and enforcement of compliance for all users (consumptive and environmental) becomes more important. Ensure ongoing communication and engagement with stakeholders and communities, including Aboriginal communities. Negotiations over values, risk tolerance, trade-offs and desired outcomes will continue during implementation of environmental water policy. Engaging stakeholders and communities meaningfully in the processes of decision making, policy implementation and adaptive management helps build capacity, trust and long-term support for environmental water policy objectives. Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 81 Glossary Term Definition Allocation The amount of water a water entitlement holder receives in a given year. An allocation is different from an entitlement. An allocation is the proportion of the entitlement held that can be made available, reflecting how much water is available in the system. The percentage depends on the amount of rainfall, inflows into storages, and how much water is already stored. Allocations can increase throughout the year in response to changes in the system. Allocations can be traded, meaning an entitlement holder can sell their water in one year, but still have an ongoing share of water for the following year. Basin state A state (or territory) with an area of the Murray-Darling Basin within its borders. Usually, the term is used to mean the governments of those states. The Basin state governments are the Australian Capital Territory, New South Wales, Queensland, South Australia and Victoria. State water The amount of water in the Murray River system that can go to each state based entitlements on the Murray-Darling Basin Agreement. This amount is calculated by the MDBA, as per the rules of the agreement. The states then calculate how much water they can allocate to individual water entitlement holders. Also known as bulk share. Carryover An unused water allocation (or part of an allocation) that the water entitlement holder saves for the next water year. A water entitlement holder has a right to a share of space in storage dams. Where carryover is offered, entitlement holders can use this space to carry over unused allocations from one year to the next. Catchment An area of land, usually surrounded by hills or mountains, where water naturally collects. Gravity causes all rain, melting snow and other water in the catchment to run downhill, where it flows into creeks, rivers, lakes or oceans. The Murray-Darling Basin is divided into more than 20 catchments. Critical human The minimum amount of water required to meet basic human needs. water needs As well as water for drinking and livestock, critical human water needs include water for vital social or economic requirements, such as water for significant local industries or community uses. Delivery of water Physically getting water to the users who have ordered it. This includes providing water to state storages (in some cases), individual irrigators and environmental water holders. It involves managing the flows and connections of water in the river system. This is done jointly by the MDBA, the states and state partners such as irrigation infrastructure operators, by operating infrastructure in the river system. Valuing water: The Australian perspective 82 Environmental values of water in the Murray-Darling Basin Term Definition Inflow Water flowing into a storage (reservoir or lake) or river system. Inflows can be natural, resulting from rain or snow over catchments that runs off into tributary creeks and rivers; or regulated, where releases from storages or other structures (such as pipes or power stations) located upstream or outside of the system or storage have some influence or control over the arriving flow. Inflows are measured by gauges deployed just upstream of their junction point or connection into the system or storage. Return flows Water that returns to the river from floodplain areas and wetlands. Return flows happen in two main ways: • surface water return flows, when water trickles back into the river through channels, drains and creeks • groundwater return flows, when water seeps into the ground, pushing groundwater into the river. Sustainable The limit on how much water can be used by Basin towns, communities, farmers diversion limit and industries over the long term, while leaving enough water in the river system to sustain natural ecosystems. Sustainable diversion limits are set at a catchment level so that there is enough water for all users, including the environment. Water entitlement The ongoing right to a share of the available water in the river system up to a maximum amount. An entitlement is not the same as an allocation. For example, a farmer might own an entitlement that gives them the right to a maximum of 100 megalitres (ML) of water each year. However, they are not guaranteed to receive the entire 100 ML in a particular year. The amount they get depends on overall water availability. For example, in a dry year, the farmer might only receive a 50 percent allocation of their entitlement (50 ML). Entitlements can be bought or sold; once sold, the seller loses the right to a regular share of the water Also known as water right, water licence. Water entitlement Water users who own a water entitlement. These can be individuals, communities, holder farms, businesses or governments (environmental water holders). Also known as licence holder. Water trading Buying and selling water entitlements and allocations. When someone buys or sells an entitlement, this is a permanent purchase or sale of the right to water. When someone buys or sells an allocation, this is the purchase or sale of the right to some or all of the water that has been allocated to a water user. Anyone holding water rights can trade entitlements and allocations freely, except where there are physical constraints (such as geography or lack of connections to the system that are managed by trading rules) or water supply considerations. Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 83 Attachments Attachment 1. Criteria for identifying an environmental asset (Basin Plan 2012, schedule 8) Item Criteria Criterion 1: The water-dependent ecosystem is formally recognised in international agreements or, with environmental watering, is capable of supporting species listed in those agreements 1 Assessment indicator: A water-dependent ecosystem is an environmental asset that requires environmental watering if it is: a) a declared Ramsar wetland; or b) with environmental watering, capable of supporting a species listed in or under the JAMBA, CAMBA, ROKAMBA or the Bonn Convention. Criterion 2: The water-dependent ecosystem is natural or near-natural, rare or unique 2 Assessment indicator: A water-dependent ecosystem is an environmental asset that requires environmental watering if it: a) represents a natural or near-natural example of a particular type of water-dependent ecosystem as evidenced by a relative lack of post-1788 human induced hydrologic disturbance or adverse impacts on ecological character; or b) represents the only example of a particular type of water-dependent ecosystem in the Murray-Darling Basin; or c) represents a rare example of a particular type of water-dependent ecosystem in the Murray-Darling Basin. Criterion 3: The water-dependent ecosystem provides vital habitat 3 Assessment indicator: A water-dependent ecosystem is an environmental asset that requires environmental watering if it: a) provides vital habitat, including: i) a refugium for native water-dependent biota during dry spells and drought; or ii) pathways for the dispersal, migration and movements of native water-dependent biota; or iii) important feeding, breeding and nursery sites for native water-dependent biota; or b) is essential for maintaining, and preventing declines of, native water-dependent biota. Valuing water: The Australian perspective 84 Environmental values of water in the Murray-Darling Basin Item Criteria Criterion 4: Water-dependent ecosystems that support Commonwealth, State or Territory listed threatened species or communities 4 Assessment indicator: A water-dependent ecosystem is an environmental asset that requires environmental watering if it: a) supports a listed threatened ecological community or listed threatened species; or Note: See the definitions of listed threatened ecological community and listed threatened species in section 1.07. b) supports water-dependent ecosystems treated as threatened or endangered (however described) under State or Territory law; or c) supports one or more native water-dependent species treated as threatened or endangered (however described) under State or Territory law. Criterion 5: The water-dependent ecosystem supports, or with environmental watering is capable of supporting, significant biodiversity 5 Assessment indicator: A water-dependent ecosystem is an environmental asset that requires environmental watering if it supports, or with environmental watering is capable of supporting, significant biological diversity. This includes a water-dependent ecosystem that: a) supports, or with environmental watering is capable of supporting, significant numbers of individuals of native water-dependent species; or b) supports, or with environmental watering is capable of supporting, significant levels of native biodiversity at the genus or family taxonomic level, or at the ecological community level. Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 85 Attachment 2. Criteria for identifying an ecosystem function (Basin Plan 2012, schedule 9) Item Criteria Criterion 1: The ecosystem function supports the creation and maintenance of vital habitats and populations 1 Assessment indicator: An ecosystem function requires environmental watering to sustain it if it provides vital habitat, including: a) a refugium for native water-dependent biota during dry periods and drought; or b) pathways for the dispersal, migration and movement of native water-dependent biota; or c) a diversity of important feeding, breeding and nursery sites for native water-dependent biota; or d) a diversity of aquatic environments including pools, riffle and run environments; or e) a vital habitat that is essential for preventing the decline of native water-dependent biota. Criterion 2: The ecosystem function supports the transportation and dilution of nutrients, organic matter and sediment 2 Assessment indicator: An ecosystem function requires environmental watering to sustain it if it provides for the transportation and dilution of nutrients, organic matter and sediment, including: a) pathways for the dispersal and movement of organic and inorganic sediment, delivery to downstream reaches and to the ocean, and to and from the floodplain; or b) the dilution of carbon and nutrients from the floodplain to the river systems. Criterion 3: The ecosystem function provides connections along a watercourse (longitudinal connections) 3 Assessment indicator: An ecosystem function requires environmental watering to sustain it if it provides connections along a watercourse or to the ocean, including longitudinal connections: a) for dispersal and re-colonisation of native water-dependent communities; or b) for migration to fulfil requirements of life-history stages; or c) for in-stream primary production. Criterion 4: The ecosystem function provides connections across floodplains, adjacent wetlands and billabongs (lateral connections) 4 Assessment indicator: An ecosystem function requires environmental watering to sustain it if it provides connections across floodplains, adjacent wetlands and billabongs, including: a) lateral connections for foraging, migration and re-colonisation of native water-dependent species and communities; or b) lateral connections for off-stream primary production. Valuing water: The Australian perspective 86 Environmental values of water in the Murray-Darling Basin Attachment 3: Principles to be applied in environmental watering (Basin Plan 2012, Division 6) Principle 1—Basin annual environmental watering priorities Environmental watering is to be undertaken having regard to the Basin annual environmental watering priorities. Note: There may be reasons why it is not possible in particular circumstances to undertake watering in accordance with these priorities. Under such circumstances, a statement of reasons must be provided to the MDBA why environmental watering has not been undertaken in accordance with the priorities. Principle 2—Consistency with the objectives in Part 2 Environmental watering is to be undertaken consistently with the environmental objectives. Principle 3—Maximising environmental benefits Subject to Principles 1 and 2, environmental watering is to be undertaken in a way that: a) maximises multiple environmental benefits of environmental watering; and b) maximises its benefits and effectiveness by: i) co-ordinating environmental watering between all holders of held environmental water and managers of planned environmental water; and ii) co-ordinating environmental watering with flows regulated for consumptive use; and iii) utilising local knowledge and experience; and iv) having regard to Indigenous values; and v) having regard to social and economic outcomes; and c) enhances existing flow events, where possible, so as to ensure improvement in the delivery of a full range of flow conditions, including high flow events; and d) takes into consideration the relative ecological benefits of applying environmental water to achieve one environmental outcome over another environmental outcome; and e) takes into consideration the variability of the natural flow regime, for example, by mitigating or avoiding seasonal inversion of flows; and f) incorporates strategies to deal with a variable and changing climate; and g) enables information to be shared between the Authority, the Commonwealth, Basin States, holders of held environmental water and managers of planned environmental water to ensure efficient and effective use of environmental water. Principle 4—Risks Environmental watering is to be undertaken having regard to: a) potential risks, including downstream risks, that may result from applying environmental water and measures that may be taken to minimise the risks; and b) risks arising from impediments to the delivery of water to water-dependent ecosystems, including risks of extraction of that water for other uses, and inadequate accounting of water flows. Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 87 Principle 5—Cost of environmental watering Environmental watering is to be undertaken having regard to the quantity of water and other resources required relative to the expected environmental benefits. Principle 6—Apply the precautionary principle A lack of full scientific certainty as to whether there are threats of serious or irreversible environmental damage should not be used as a reason for postponing measures to prevent environmental degradation. Principle 7—Working effectively with local communities Environmental watering should be undertaken having regard to the views of: a) local communities, including bodies established by a Basin State that express community views in relation to environmental watering; and b) persons materially affected by the management of environmental water. Principle 8—Adaptive management Adaptive management should be applied in the planning, prioritisation and use of environmental water. Principle 9—Relevant international agreements Environmental watering should be undertaken in a way that is not inconsistent with relevant international agreements. Principle 10—Other management and operational practices River management and operational practices should be reviewed, and if necessary altered, to ensure that rivers can be managed to achieve multiple objectives, including the environmental objectives. Principle 11—Management of water for consumptive use Management of water for consumptive use should, where possible, be undertaken in a way that is consistent with achieving the environmental objectives. Valuing water: The Australian perspective 88 Environmental values of water in the Murray-Darling Basin References ABS. (2012). 4628.0.55.001: Completing the picture—environmental accounting in practice, May 2012. Australian Bureau of Statistics. https://www.abs.gov.au/ausstats/abs@.nsf/mf/4628.0.55.001 ABS. (2016a). 2016 Census. Australian Bureau of Statistics. https://www.abs.gov.au/websitedbs/censushome. nsf/home/2016 ABS. (2016b). 3218.0: Regional population growth, Australia, 2016. Australian Bureau of Statistics. https://www.abs.gov.au/ausstats/abs@.nsf/lookup/3218.0Media%20Release12016 ABS. (2019). Gross value of irrigated agricultural production, 2017–18 financial year. Australian Bureau of Statistics. https://www.abs.gov.au/statistics/industry/agriculture/gross-value-irrigated-agricultural- production/2017-18 ABS. (2020). Water use on Australian farms, 2018–19 financial year. Australian Bureau of Statistics. https://www.abs.gov.au/statistics/industry/agriculture/water-use-australian-farms/2018-19 Acemoğlu, D., & Robinson, J. A. (2016). Paths to inclusive political institutions. In J. Eloranta, E. Golson, A. Markevich, & N. Wolf (Eds.), Economic history of warfare and state formation, studies in economic history (pp. 3–50). Springer Singapore. https://doi.org/10.1007/978-981-10-1605-9_1 Acreman, M., Arthington, A. H., Colloff, M. J., Couch, C., Crossman, N. D., Dyer, F., Overton, I., Pollino, C. A., Stewardson, M. J., & Young, W. (2014). Environmental flows for natural, hybrid, and novel riverine ecosystems in a changing world. Frontiers in Ecology and the Environment, 12(8), 466–473. https://doi.org/10.1890/130134 Alexandra, J. (2019). Losing the authority: what institutional architecture for cooperative governance in the Murray Darling Basin? Australasian Journal of Water Resources, 23(2), 99–115. https://doi.org/10.1080/13241 583.2019.1586066 ANCOLD. (2010). Register of large dams in Australia. Australian Committee on Large Dams. Anderson, K. (2017). Sectoral trends and shocks in Australia’s economic growth. Australian Enonomic History Review, 57(1), 2–21. https://doi.org/10.1111/aehr.12130 Arthington, A. H., Bhaduri, A., Bunn, S. E., Jackson, S. E., Tharme, R. E., Tickner, D., Young, B., Acreman, M., Baker, N., Capon, S., Horne, A. C., Kendy, E., McClain, M. E., Poff, N. L., Richter, B. D., & Ward, S. (2018). The Brisbane Declaration and Global Action Agenda on Environmental Flows (2018). Frontiers in Environmental Science, 6, 433–15. https://doi.org/10.3389/fenvs.2018.00045 Attorney-General’s Department, & Australian Government Solicitor. (2012). The constitution printed on 1 January 2012 together with Proclamation Declaring the Establishment of the Commonwealth, Letters Patent Relating to the Office of Governor-General, Statute of Westminister Adoption Act 1942, Australia Act 1986. Attorney-General’s Department, & Australian Government Solicitor. Australian Academy of Science. (2019). Investigation of the causes of mass fish kills in the Menindee region NSW over the summer of 2018–2019. Australian Academy of Science. Australian Parliament. (1945). Full employment in Australia. Australian Parliament. Australian Parliamennt. (1973). A national approach to water resources management: A statement of Australian Government policy. Australian Parliament. Australian Parliament. (1993). Murray-Darling Basin Act 1993, No. 38. Australian Parliament. Australian Parliament. (2007). Bills Digest no. 30, 2007–08: Water Bill 2007. Australian Parliament. AWRC. (1975). Review of Australia’s water resources 1975. Australian Water Resources Council. Barbour, L. (2020). David Littleproud returns to agriculture as Nationals change jobs in Scott Morrison’s new-look frontbench. ABC News. https://www.abc.net.au/news/2020-02-06/nationals-into-cabinet-at-scott- morrison-reshuffles-frontbench/11932374 Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 89 Baumgartner, L., Zampatti, B., Jones, M., Stuart, I., & Mallen‐Cooper, M. (2014). Fish passage in the Murray-Darling Basin, Australia: Not just an upstream battle. Ecological Management and Restoration, 15(s1), 28–39. https://doi.org/10.1111/emr.12093 Beck, U. (1992). Risk society: Towards a new modernity. Sage Publications. Berry, H. L., Botterill, L. C., Cockfield, G., & Ding, N. (2016). Identifying and measuring agrarian sentiment in regional Australia. Agriculture and Human Values, 33, 929–941. https://doi.org/10.1007/s10460-016-9684-5 Bird, R., Bird, D. W., Codding, B. F., Parker, C. H., & Jones, J. H. (2008). The ‘fire stick farming’ hypothesis: Australian Aboriginal foraging strategies, biodiversity, and anthropogenic fire mosaics. Proceedings of the National Academy of Sciences USA, 106(39). https://doi.org/10.1073/pnas.0804757105 Bird, P., Mutze, G., Peacock, D., & Jennings, S. (2012). Damage caused by low-density exotic herbivore populations: The impact of introduced European rabbits on marsupial herbivores and Allocasuarina and Bursaria seedling survival in Australian coastal shrubland. Biological Invasions, 14, 743–755. https://doi.org/10.1007/s10530-011-0114-8 Bjornlund, H., & O’Callaghan, B. (2004). Property implications of the separation of land and water rights. Pacific Rim Property Research Journal, 10(1), 54–78. https://doi.org/10.1080/14445921.2004.11104154 Black, A., & Gordon, G. (1882). Supply of water to the northern plains—Irrigation: A report to both houses of parliament by His Excellency’s command. John Ferres, Government Printer. Blackmore, D. (1995). The Murray-Darling Basin Initiative: A case study in integrated catchment management. Sir John Quick Bendigo Lecture, La Trobe University. Blomquist, W. (2012). A political analysis of property rights. In D. H. Cole, & E. Ostrom (Eds.), Property in land and other resources (pp. 1–19). Blomquist, W. (2020). Beneath the surface: Complexities and groundwater policy-making. Oxford Review of Economic Policy, 36(1), 154–170. https://doi.org/10.1093/oxrep/grz033 BoM. (2018). The Australian Landscape Water Balance model (AWRA-L v6). Bureau of Meteorology. BoM. (2019). National Water Account 2018. Bureau of Meteorology. BoM. (2020). National Water Account 2019. Bureau of Meteorology. BoM. (2021). Australian Hydrological Geospatial Fabric 3.2. Bureau of Meteorology. Bond, N. R., Brooks, S., Capon, S., Hale, J., Kennard, M., & McGinness, H. (2020). Water-based assets of the Murray-Darling Basin and their ecological condition. In B. Hart, N. Byron, N. Bond. C. Pollino, & M. Stewardson (Eds.), Murray-Darling Basin, Australia: Its future management (pp. 75–93). Elsevier. Boon, P. I. (2020). The environmental history of Australian rivers: A neglected field of opportunity? Marine and Freshwater Research, 71(1), 1. https://doi.org/10.1071/MF18372 Botterill, L. C. (2016). Agricultural policy in Australia: Deregulation, bipartisanship and agrarian sentiment. Australian Journal of Political Science, 51(4), 667–682. https://doi.org/10.1080/10361146.2016.1239567 Boulton, D. A. J., & Thompson, R. M. (2016). Independent scientific review of the revised Condamine–Balonne and Barwon–Darling environmental water requirements reports. Murray-Darling Basin Authority. Briscoe, J. (2011). Submission to the Standing Committee on Legal and Constitutional Affairs of the Senate. Parliament of the Commonwealth of Australia. Briscoe, J., McKay, G., Biswas, A. K., Likens, G., & Bertilsson, P. (2010). International review of the draft guide to the proposed Basin Plan. In: Developing the guide to the proposed Basin Plan: Peer review reports. Murray-Darling Basin Authority. Briscoe, J., McKay, G., Biswas, A. K., Likens, G., & Bertilsson, P. (2011). Review A1: International review— final report. In: Developing the guide to the proposed Basin Plan: Peer review reports. Murray-Darling Basin Authority. Valuing water: The Australian perspective 90 Environmental values of water in the Murray-Darling Basin Bunn, S. E., Kennard, M. J., Ward, D. P., Tews, K., Sims, N. C., & Peterson, E. E. (2014). Flow regimes and ecological assets: A technical report from the Ecological Responses to Altered Flow Regimes Flagship Research Cluster (SubProject 2). CSIRO. Butlin, N. G. (1959). Colonial socialism in Australia, 1860–1900. In H. Aitken (Ed.), The state and economic growth. Social Science Research Council. Capon, S. J., & Capon, T. R. (2017). An impossible prescription: Why science cannot determine environmental water requirements for a healthy Murray-Darling Basin. Water Economics and Policy, 3(3), 1650037. https://doi.org/10.1142/S2382624X16500375 CEWO. (2013). Framework for determining commonwealth environmental water use: May 2013. Commonwealth Environmental Water Office. CEWO. (2020). Water management plan 2020–21. Commonwealth Environmental Water Office. CEWO. (n.d.). Managing water for the environment. Commonwealth Environmental Water Office. https://www.environment.gov.au/water/cewo/about-commonwealth-environmental-water Chiew, F. H. S., Piechota, T. C., Dracup, J. A., & McMahon, T. A. (1998). El Nino/Southern Oscillation and Australian rainfall, streamflow and drought: Links and potential for forecasting. Journal of Hydrology, 204(1–4), 138–149. https://doi.org/10.1016/S0022-1694(97)00121-2 Chiew, F., Zheng, H., Potter, N. J., Ekstrom, M., Grose, M. R., Kirono, D. G. C., Zhang, L., & Vase, J. (2017). Future runoff projections for Australia and science challenges in producing next generation projections. 22nd International Congress on Modelling and Simulation, Hobart. COAG. (1992). National Strategy for Ecologically Sustainable Development. Council of Australian Governments. COAG. (1994). COAG communique: Water resource policy, 25 February 1994. Council of Australian Governments. COAG. (2004). Intergovernmental Agreement on a National Water Initiative. Council of Australian Governments. Colloff, M. J., Caley, P., Saintilan, N., Pollino, C. A., & Crossman, N. D. (2015). Long-term ecological trends of flow-dependent ecosystems in a major regulated river basin. Marine and Freshwater Research, 66(11), 957–969. https://doi.org/10.1071/MF14067 Connell, D. (2007). Water politics in the Murray-Darling Basin. Federation Press. Connell, D., & Grafton, Q. R. (2011). Water reform in the Murray-Darling Basin. Water Resources Research, 47(12). https://doi.org/10.1029/2010WR009820 Crase, L. (2008). An introduction to Australian water policy. In L. Crase (Ed.), Water policy in Australia: the impact of change and uncertainty. Taylor & Francis Group. Crase, L. (2009). The fluctuating political appeal of water engineering in Australia. Water Alternatives, 2(3), 440–447. https://hdl.handle.net/1959.11/8161 Crase, L. (2011). The fallout to the guide to the proposed Basin Plan. Australian Journal of Public Administration, 70(1), 84–93. https://doi.org/10.1111/j.1467-8500.2011.00714.x CSIRO. (2008). Water availability in the Murray-Darling Basin: A report from CSIRO to the Australian Government. Commonwealth Scientific and Industrial Research Organisation. Darian-Smith, K. (2013). World War 2 and post-war reconstruction, 1939–49. In A. Bashford, & S. Macintyre (Eds.), The Cambridge history of Australia (pp. 88–111). Cambridge University Press. https://doi.org/10.1017/ CHO9781107445758.035 Davidson, B.R. (1969). Australia wet or dry? The physical and economic limits to the expansion of irrigation. Melbourne University Press. Davidson, B.R. (1981). European farming in Australia: An economic history of Australian farming. Elsevier. Davies, A., & Karp, P. (2019). NSW Nationals demand changes to Murray-Darling plan or state will pull out. The Guardian. https://www.theguardian.com/australia-news/2019/dec/03/nsw-nationals-demand-changes-to- murray-darling-plan-or-state-will-pull-out Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 91 Davies, P., & Lawrence, S. (2019). Engineered landscapes of the southern Murray-Darling Basin: Anthropocene archaeology in Australia. Anthropocene Review, 6(3), 179–206. https://doi.org/10.1177/2053019619872826 Davis, P.N. (1968). Australian and American water allocation systems compared. Boston College Law Review, 9(3), 647–710. https://lawdigitalcommons.bc.edu/bclr/vol9/iss3/6 DAWE. (2020a). Interim Biogeographic Regionalisation for Australia v. 7 (IBRA) [Data set]. Australian Government Department of Agriculture, Water and the Environment. https://www.environment.gov.au/fed/ catalog/search/resource/details.page?uuid=%7B1273FBE2-F266-4F3F-895D-C1E45D77CAF5%7D#:~:text= IBRA%20Version%207.0%20is%20the,states%2Fterritories%20along%20state%20borders. DAWE. (2020b). Sustainable diversion limit (SDL) adjustment mechanism and its implementation. Australian Government Department of Agriculture, Water and the Environment. https://www.agriculture.gov. au/water/mdb/policy/sdl-adjustment-mechanism DAWE. (2021). Registered surface water recovery under the Basin Plan as at 30 September 2021. Australian Government Department of Agriculture, Water and the Environment. DELWP. (2019). Long-term water resource assessment for southern Victoria: Overview report. Victorian Department of Environment, Land, Water and Planning. Department of Agriculture. (2019). Improving implementation of the Murray-Darling Basin Plan: Joint Basin government response to the Productivity Commission inquiry report: Murray-Darling Basin Plan: Five-year assessment. Australian Government Department of Agriculture. Docker, B. B., & Johnson, H. L. (2017). Environmental water delivery: maximizing ecological outcomes in a constrained operating environment. In A. C. Horne, J. A. Webb, M. J. Stewardson, B. Richter, & M. Acreman (Eds.), Water for the environment (pp. 563–598). Academic Press. https://doi.org/10.1016/B978-0-12-803907- 6.00024-3. Donnelly, T. H., Grace, M. R., & Hart, B.T. (1997). Algal blooms in the Darling–Barwon River, Australia. Water, Air, and Soil Pollution, 99, 487–496. Doolan, J. (2016). The Australian water reform journey: An overview of three decades of policy, management and institutional transformation. Australian Water Partnership. Doolan, J. M., Ashworth, B., & Swirepik, J. (2017). Planning for the active management of environmental water. In A. C. Horne, J. A. Webb, M. J. Stewardson, B. Richter, & M. Acreman (Eds.), Water for the environment (pp. 539–561). Academic Press. https://doi.org/10.1016/B978-0-12-803907-6.00023-1 Driver, P. D., Harris, J. H., Closs, G. P., & Koen, T. B. (2005). Effects of flow regulation on carp (Cyprinus carpio L.) recruitment in the Murray-Darling Basin, Australia. River Research and Applications, 21(2–3), 327–335. https://doi.org/10.1002/rra.850 Dwyer, G., & Cheesman, J. (2019). Literature review: Supporting the independent assessment of economic and social conditions in the Murray-Darling Basin. Marsden Jacob. Dyson, M. (2021). Current water resources policy and planning in the Murray-Darling Basin. In B.T. Hart, N. R. Bond, N. Byron, C. A. Pollino, & M. J. Stewardson (Eds.), Murray-Darling Basin, Australia: Its future management (pp. 163–184). Elsevier. https://doi.org/10.1016/B978-0-12-818152-2.00008-5 Eastham, J., Mainuddin, M., Elmahdi, A., & Ahmad, M.-D. (2014). Water use and availability in the river basins of the Challenge Program on Water and Food. CSIRO. Falkenmark, M., Wang-Erlandsson, L., & Rockström, J. (2019). Understanding of water resilience in the Anthropocene. Journal of Hydrology X, 2, 100009. https://doi.org/10.1016/j.hydroa.2018.100009 Frederiksen, H.D. (1992). Water resources institutions: Some principles and practices. World Bank. Freund, M., Henley, B. J., Karoly, D. J., Allen, K. J., & Baker, P. J. (2017). Multi-century cool- and warm-season rainfall reconstructions for Australia’s major climatic regions. Climate of the Past, 13(12), 1751–1770. https://doi.org/10.5194/cp-13-1751-2017 Valuing water: The Australian perspective 92 Environmental values of water in the Murray-Darling Basin Gallant, A. J. E., Kiem, A. S., Verdon-Kidd, D. C., Stone, R. C., & Karoly, D. J. (2012). Understanding hydroclimate processes in the Murray-Darling Basin for natural resources management. Hydrology and Earth System Sciences, 16(7), 2049–2068. https://doi.org/10.5194/hess-16-2049-2012 Gammage, B. (2011). The biggest estate on Earth: How Aborigines made Australia. Allen & Unwin. Gann, G. D., McDonald, T., Walder, B., Aronson, J., Nelson, C. R., Jonson, J., Hallett, J. G., Eisenberg, C., Guariguata, M. R., Liu, J., Hua, F., Echeverría, C., Gonzales, E., Shaw, N., Decleer, K., & Dixon, K. W. (2019). International principles and standards for the practice of ecological restoration. Second edition. Restoration Ecology 277(S1), S1–S46. https://doi.org/10.1111/rec.13035 Gardner, A., Bartlett, R., Gray, J., & Nelson, R. (2018). Water resources law. LexisNexis. Garrick, D. E., Hanemann, M., & Hepburn, C. (2020). Rethinking the economics of water: An assessment. Oxford Review of Economic Policy, 36(1), 1–23. https://doi.org/10.1093/oxrep/grz035 Gawne, B., Hale, J., Stewardson, M. J., Webb, J. A., Ryder, D. S., Brooks, S. S., Campbell, C. J., Capon, S. J., Everingham, P., Grace, M. R., Guarino, F., & Stoffels, R. J. (2020). Monitoring of environmental flow outcomes in a large river basin: The Commonwealth Environmental Water Holder’s long‐term intervention in the Murray- Darling Basin, Australia. River Research and Applications, 36(4), 630–644. https://doi.org/10.1002/rra.3504 Gawne, B., Ryan, K. A., Coleman, M., Meehan, A., Davies, P. E., Sluggett, A., Lowes, A., Crossman, N., & Mues, C. (2021). Monitoring, evaluation, and adaptive management in the Murray-Darling Basin. In B. Hart, N. Byron, N. Bond. C. Pollino, & M. Stewardson (Eds.), Murray-Darling Basin, Australia: Its future management (pp. 227–249). Elsevier. Gaynor, A. (2013). Environmental transformations. In A. Bashford, & S. Macintyre (Eds.), The Cambridge history of Australia (pp. 269–293). Cambridge University Press. https://doi.org/10.1017/CHO9781107445758.014 Geoscience Australia. (2004). Dams and water storages 1990 [Data set]. Geoscience Australia. Geoscience Australia. (2012). Shaping a nation: A Geology of Australia. Geoscience Australia. Grafton, R. Q. (2019). Policy review of water reform in the Murray-Darling Basin, Australia: the ‘do’s’ and ‘do’nots.’ Australian Journal of Agricultural and Resource Economics, 63(1), 116–141. https://doi.org/10.1111/1467-8489.12288 Grafton, R. Q., & Williams, J. (2020). Rent-seeking behaviour and regulatory capture in the Murray-Darling Basin, Australia. International Journal of Water Resources Development, 36(2–3), 484–504. https://doi.org/10.1080/07900627.2019.1674132 Grafton, R. Q., Colloff, M. J., Marshall, V., & Williams, J. (2019). Confronting a ‘post-truth water world’ in the Murray-Darling Basin, Australia. Water Alternatives, 13, 1–28. http://hdl.handle.net/1885/206253 Guest, C. (2017). Managing the River Murray: one hundred years of politics. In B. T. Hart, & J. Doolan (Eds.), Decision making in water resources policy and management (pp. 23–39). Elsevier. https://doi.org/10.1016/ B978-0-12-810523-8.00003-3 Haddeland, I., Heinke, J., Biemans, H., Eisner, S., Flörke, M., Hanasaki, N., Konzmann, M., Ludwig, F., Masaki, Y., Schewe, J., Stacke, T., Tessler, Z. D., Wada, Y., & Wisser, D. (2014). Global water resources affected by human interventions and climate change. Proceedings of the National Academy of Sciences USA, 111(9), 3251–3256. https://doi.org/10.1073/pnas.1222475110 Haigh, F. (1964). Irrigation potential and problems. In E. Hills (Ed.), Water resources, use and management: Proceedings of a symposium held at Canberra by the Australian Academy of Science (pp. 429–437). Melbourne University Press. Hanemann, M., & Young, M. (2020). Water rights reform and water marketing: Australia vs the US west. Oxford Review of Economic Policy, 36(1), 108–131. https://doi.org/10.1093/oxrep/grz037 Harris, E. (2008). Colonialism and long-run growth in Australia: An examination of institutional change in Victoria’s water sector during the nineteenth century. Australian Economic History Review, 48(3), 266–279. https://doi.org/10.1111/j.1467-8446.2008.00239.x Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 93 Hart, B., Walker, G., Katupitiya, A., & Doolan, J. (2020). Salinity management in the Murray-Darling Basin, Australia. Water, 12(6), 1829. https://doi.org/10.3390/w12061829 Hart, B., Byron, N., Bond, N., Pollino, C., & Stewardson, M. (2021). Murray-Darling Basin, Australia: Its future management. Elsevier. Haynes, G. D., Gilligan, D. M., Grewe, P., & Nicholas, F. W. (2009). Population genetics and management units of invasive common carp Cyprinus carpio in the Murray-Darling Basin, Australia. Journal of Fish Biology, 75(2), 295–320. https://doi.org/10.1111/j.1095-8649.2009.02276.x Hilmer, F. G. (1993). National competition policy. Australian Government Publishing Service. Holley, C., & Sinclair, D. (Eds.). (2018). Reforming water law and governance. Springer Singapore. https://doi.org/10.1007/978-981-10-8977-0 Horne, A., & O’Donnell, E. (2014). Decision making roles and responsibility for environmental water in the Murray-Darling Basin. Australian Journal of Water Resources, 18(2), 1–16. https://doi.org/10.1080/13241583. 2014.11465445 Howard, J. (2007). A national plan for water security [Address to the National Press Club]. Prime Minister of Australia. Humphries, P. (2007). Historical Indigenous use of aquatic resources in Australia’s Murray-Darling Basin, and its implications for river management. Ecological Management and Restoration, 8(2), 106–113. https://doi.org/10.1111/j.1442-8903.2007.00347.x Humphries, P., & Winemiller, K. O. (2009). Historical impacts on river fauna, shifting baselines, and challenges for restoration. BioScience, 59(8), 673–684. https://doi.org/10.1525/bio.2009.59.8.9 Hunter, B. (2014). The Aboriginal legacy. In S. Ville, & G. Withers (Eds.), The Cambridge economic history of Australia (pp. 73–96). Cambridge University Press. https://doi.org/10.1017/CHO9781107445222.008 Hutton, D., & Connors, L. (1999). History of the Australian environment movement. Cambridge University Press. IIG. (2020). Impact of lower inflows on state shares under the Murray-Darling Basin Agreement. Interim Inspector General of Murray Darling Basin Water Resources. IRC. (1902). Interstate royal commission on the River Murray: Report of the commissioners. Sands and McDougall. Johnson, H., Peat, M., & Swirepik, J. (2020). Active management of environmental water in the Murray-Darling Basin. In B. Hart, N. Byron, N. Bond. C. Pollino, & M. Stewardson (Eds.), Murray-Darling Basin, Australia: Its future management (pp. 203–226). Elsevier. Kingsford, R. T. (2000). Ecological impacts of dams, water diversions and river management on floodplain wetlands in Australia. Austral Ecology, 25(2), 109–127. https://doi.org/10.1046/j.1442-9993.2000.01036.x Lasswell, H. D. (1936). Politics: Who gets what, when, how. Whittlesey House. Lawrence, S., Davies, P., & Turnbull, J. (2017). The archaeology of water on the Victorian goldfields. International Journal of Historical Archaeology, 21, 49–65. https://doi.org/10.1007/s10761-016-0330-0 Leblanc, M., Tweed, S., Dijk, A. V., & Timbal, B. (2010). A review of historic and future hydrological changes in the Murray-Darling Basin. Global and Planetary Change, 80–81, 226–246. https://doi.org/10.1016/j. gloplacha.2011.10.012 Leopold, A. (1990). Standards of conservation. Conservation Biology, 4(3), 227–228. https://doi.org/10.1111/j.1523-1739.1990.tb00281.x Linsley, R. (1964). Some socio-economic aspects of water development. In E. Hills (Ed.), Water resources, use and management: Proceedings of a symposium held at Canberra by the Australian Academy of Science pp. 429–437. Melbourne University Press. Lockie, S. (2019). Failure or reform?: Market-based policy instruments for sustainable agriculture and resource management. Routledge. Valuing water: The Australian perspective 94 Environmental values of water in the Murray-Darling Basin Lunney, D. (2001). Causes of the extinction of native mammals of the Western Division of New South Wales: An ecological interpretation of the nineteenth century historical record. Rangeland Journal, 23(1), 44–70. https://doi.org/10.1071/RJ01014 Lunt, I. D. (2002). Grazed, burnt and cleared: How ecologists have studied century-scale vegetation changes in Australia. Australian Journal of Botany, 50(4), 391–407. https://doi.org/10.1071/BT01044 Lunt, I. D., & Spooner, P. G. (2005). Using historical ecology to understand patterns of biodiversity in fragmented agricultural landscapes. Journal of Biogeography, 32(11), 1859–1873. https://doi.org/10.1111/ j.1365-2699.2005.01296.x Lunt, I. D., Jones, N., Spooner, P. G., & Petrow, M. (2006). Effects of European colonization on indigenous ecosystems: Post-settlement changes in tree stand structures in Eucalyptus–Callitris woodlands in central New South Wales, Australia. Journal of Biogeography, 33(6), 1102–1115. https://doi.org/10.1111/j.1365- 2699.2006.01484.x L’vovich, M. I., & White, G. F. (1990). Use and transformation of terrestrial water systems. In B.L. Turner, W. C. Clark, R. W. Kates, J. F. Richards, J. T. Mathews, & W. B. Meyer (Eds.), The Earth as transformed by human action (pp. 235–252). Cambridge University Press. Maheshwari, B., Walker, K., & McMahon, T. (1995). Effects of regulation on the flow regime of the River Murray, Australia. River Research and Applications, 10(1), 15–38. https://doi.org/10.1002/rrr.3450100103 Mallawaarachchi, T., Auricht, C., Loch, A., Adamson, D., & Quiggin, J. (2020). Water allocation in Australia’s Murray-Darling Basin: Managing change under heightened uncertainty. Economic Analysis and Policy, 66, 345–369. https://doi.org/10.1016/j.eap.2020.01.001 Mallen-Cooper, M., & Zampatti, B. P. (2018). History, hydrology and hydraulics: Rethinking the ecological management of large rivers. Ecohydrology, 11(5), e1965. https://doi.org/10.1002/eco.1965 Matthews, K. (2018). Water management in Australia: Time for a re-think [2018 Peter Cullen Lecture]. Peter Cullen Water and Environment Trust. McMahon, T. A., & Finlayson, B. L. (2003). Droughts and anti-droughts: The low flow hydrology of Australian rivers. Freshwater Biology, 48(7), 1147–1160. https://doi.org/10.1046/j.1365-2427.2003.01098.x McMahon, T. A., & Petheram, C. (2020). Australian dams and reservoirs within a global setting. Australasian Journal of Water Resources, 24(1), 12–35. https://doi.org/10.1080/13241583.2020.1733743 McMahon, T. A., Finlayson, B. L., Haines, A. T., & Srikanthan, R. (1992). Global runoff: Continental comparisons of annual flows and peak discharges. Catena. MDBA. (2010). Guide to the proposed Basin Plan: Technical background. Murray-Darling Basin Authority. MDBA. (2011). The proposed ‘environmentally sustainable level of take’ for surface water of the Murray- Darling Basin: Method and outcomes. Murray-Darling Basin Authority. MDBA. (2012a). Sustainable Rivers Audit 2: Summary. Murray-Darling Basin Authority. MDBA. (2012b). Regulation impact statement: Basin Plan—Water Act 2007 (Cth). Murray-Darling Basin Authority. MDBA. (2013). Constraints Management Strategy 2013–2024. Murray-Darling Basin Authority. MDBA. (2016a). Condamine–Balonne environmental water requirements report. Murray-Darling Basin Authority. MDBA. (2016b). Assessment of environmental water requirements: Barwon–Darling river system. Murray-Darling Basin Authority. MDBA. (2017). Basin Plan evaluation 2017 (Report 52/17). Murray-Darling Basin Authority. MDBA. (2019). Basin-wide environmental watering strategy. Murray-Darling Basin Authority. MDBA. (2020a). State annual diversions (time series data). MDBA. (2020b). Blackwater. Murray-Darling Basin Authority. https://www.mdba.gov.au/issues-murray-darling- basin/blackwater Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 95 MDBA. (2020c). The 2020 Basin Plan evaluation. Murray-Darling Basin Authority. MDBA. (2020d). Northern Basin projects. Murray-Darling Basin Authority. https://www.mdba.gov.au/basin- plan/northern-basin-projects MDBA. (2020e). Common water management terms. Murray-Darling Basin Authority. https://www.mdba.gov. au/water-management/common-terms MDBA. (2021). Progress on water recovery. Murray-Darling Basin Authority. https://www.mdba.gov.au/ progress-water-recovery MDBC. (1995). An audit of water use in the Murray-Darling Basin. Murray-Darling Basin Commission. MDBC. (1999). The salinity audit of the Murray-Darling Basin: A 100-year perspective, 1999. Murray-Darling Basin Commission. MDBC. (2000). Review of the operation of the cap: Overview report of the Murray-Darling Basin Commission. Murray-Darling Basin Commission. MDBMC. (1987). Murray-Darling Basin environmental resources study. Murray-Darling Basin Ministerial Council. MDBMC. (1990). Murray-Darling Basin natural resources management strategy. Murray-Darling Basin Ministerial Council. MDBMC. (2005). Review of cap implementation 2003/04: Report of the Independent Audit Group. Murray-Darling Basin Ministerial Council. Molle, F. (2008). Why enough is never enough: The societal determinants of river basin closure. International Journal of Water Resources Development, 24(2), 217–226. https://doi.org/10.1080/07900620701723646 Molle, F. (2009). Water, politics and river basin governance: Repoliticizing approaches to river basin management. Water International, 34(1), 62–70. https://doi.org/10.1080/02508060802677846 Molle, F., Mollinga, P. P., & Wester, P. (2009). Hydraulic bureaucracies and the hydraulic mission: Flows of water, flows of power. Water Alternatives, 2(3), 328–347. Molle, F., Wester, P., & Hirsch, P. (2010). River basin closure: Processes, implications and responses. Agricultual Water Management, 97(4), 569–577. https://doi.org/10.1016/j.agwat.2009.01.004 Mollinga, P. P. (2008). Water policy—water politics. In W. Scheumann, S. Neubert, & M. Kipping (Eds.), Water politics and development cooperation: Local power plays and global governance (pp. 1–29). Springer Berlin. https://doi.org/10.1007/978-3-540-76707-7 Moore, S. M. (2018). Subnational hydropolitics: Conflict, cooperation, and institution building in shared river basins. Oxford University Press. MRMCL. (1902). Official report of the Corowa water conference. George Hamilton. Murray River Main Canal League. Muir, C. (2014). The broken promise of agricultural progress: An environmental history. Routledge. Murphy, B. F., & Timbal, B. (2008). A review of recent climate variability and climate change in southeastern Australia. International Journal of Climatology, 28(7), 859–879. https://doi.org/10.1002/joc.1627 National Research Council. (1996). Understanding risk: Informing decisions in a democratic society. National Academies Press. https://doi.org/10.17226/5138 NCC. (2004). New South Wales: allocation of water to the environment—National Competition Policy deferred 2003 water reform assessment. National Competition Council. Nilsson, C., Reidy, C. A., Dynesius, M., & Revenga, C. (2005). Fragmentation and flow regulation of the world’s large river systems. Science, 308(5720), 405–408. https://doi.org/10.1126/science.1107887 North, D. C. (1991). Institutions. Journal of Economic Perspectives, 5, 97–112. NSW DPIE. (n.d.). The Nimmie-Caira project. New South Wales Department of Planning, Industry and Environment. https://www.industry.nsw.gov.au/water/plans-programs/state-significant-projects/nimmie-caira Valuing water: The Australian perspective 96 Environmental values of water in the Murray-Darling Basin NWC. (2011). Water markets in Australia: A short history. National Water Commission. O’Donnell, E. (2013). Australia’s environmental water holders: who is managing our environmental water? Australian Environment Review, 28, 508–513. O’Gorman, E. (2012). Flood country: An environmental history of the Murray-Darling Basin. CSIRO Publishing. Oliver, R., Rees, C., Grace, M. R., Hart, B. T., Caltcheon, G., & Olley, J. (1998). Cyanobacterial blooms in the Darling River. Water: Journal of the Australian Water Association, 25, 18–19. Palmer, M., Bernhardt, E., Chornesky, E., Collins, S., Dobson, A., Duke, C., Gold, B., Jacobson, R., Kingsland, S., Kranz, R., & Mappin, M. (2004). Ecology for a crowded planet. Science, 304(5675), 1251–1252. https://doi.org/10.1126/science.1095780 PC. (2018). Murray-Darling Basin Plan: Five-year assessment. Productivity Commission. PC. (2020). National water reform: Issues paper. Productivity Commission. PC. (2021a). Environmental management: Supporting paper C to ‘National water reform 2020, draft report’. Productivity Commission. PC. (2021b). National water reform 2020, draft report. Productivity Commission. Petheram, C., & McMahon, T. A. (2019). Dams, dam costs and damnable cost overruns. Journal of Hydrology X, 3, 100026. https://doi.org/10.1016/j.hydroa.2019.100026 Poff, N. L. (2018). Beyond the natural flow regime? Broadening the hydro‐ecological foundation to meet environmental flows challenges in a non‐stationary world. Freshwater Biology, 63(8), 1011–1021. https://doi.org/10.1111/fwb.13038 Poff, N. L., & Zimmerman, J. K. (2010). Ecological responses to altered flow regimes: A literature review to inform the science and management of environmental flows. Freshwater Biology, 55(1), 194–205. https://doi.org/10.1111/j.1365-2427.2009.02272.x Poff, N. L., Tharme, R. E., & Arthington, A. H. (2017). Evolution of environmental flows assessment science, principles, and methodologies. In Water for the environment (pp. 203–236). Elsevier. Pollino, C. A., Hart, B. T., Nolan, M., Byron, N., & Marsh, R. (2021). Rural and regional communities of the Murray-Darling Basin. In B. Hart, N. Byron, N. Bond. C. Pollino, & M. Stewardson (Eds.), Murray-Darling Basin, Australia: Its future management (pp. 21–46). Elsevier. Powell, J. M. (2000). Snakes and cannons: Water management and the geographical imagination in Australia. In S. Dovers (Ed.), Environmental history and policy: Still settling Australia (pp. 47–71). Oxford University Press. Raggett, H. (1964). The national outlook. In E. Hills (Ed.), Water resources, use and management: Proceedings of a symposium held at Canberra by the Australian Academy of Science (pp. 429–437). Melbourne University Press. RMWP (1975). Report to Steering Committee of Ministers (Parliamentary Paper 327/1976). River Murray Working Party. Robertson, A. I., & Rowling, R. W. (2000). Effects of livestock on riparian zone vegetation in an Australian dryland river. Regulated Rivers: Research and Management, 16(5), 527–541. https://doi.org/10.1002/1099- 1646(200009/10)16:5<527::AID-RRR602>3.0.CO;2-W Robin, L. (2007). How a continent created a nation. UNSW Press. Rutherford, J. (1968). Government irrigation and its physical environment. In G. Dury, & M. Logan (Eds.), Studies in Australian geography (pp. 137–194). Heinman. Rutherfurd, I. D., Kenyon, C., Thoms, M., Grove, J., Turnbull, J., Davies, P., & Lawrence, S. (2020). Human impacts on suspended sediment and turbidity in the River Murray, south eastern Australia: Multiple lines of evidence. River Research and Applications, 36(4), 522–541. https://doi.org/10.1002/rra.3566 Sabatier, P.A. (1988). An advocacy coalition framework of policy change and the role of policy-oriented learning therein. Policy Sciences, 21, 129–168. https://doi.org/10.1007/BF00136406 Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 97 Sarewitz, D. (2004). How science makes environmental controversies worse. Environmental Science and Policy, 7(5), 385–403. https://doi.org/10.1016/j.envsci.2004.06.001 SCBEWC. (2020). Water for the environment: Annual report 2019–20. Southern Connected Basin Environmental Watering Commitee. Sefton, R. (2020). Draft panel report: Independent assessment of social and economic conditions in the Basin. Murray-Darling Basin Authority. SER. (2019). International principles and standards for the practice of ecological restoration. Society for Ecological Restoration. Sharpe, C., & Stuart, I. (2018). Environmental flows in the Darling River to support native fish populations. Commonwealth Environmental Water Office. Sinclair, W. A. (2017). Annual estimates of gross domestic product : Australian colonies/states 1861–1976/77. Monash University. https://doi.org/10.4225/03/5a126aae4cd89 SLWRMC. (1996). National principles for the provision of water for ecosystems. Sustainable Land and Water Resources Management Committee, Agriculture and Resource Management Council of Australia and New Zealand and Australian, & New Zealand Environment and Conservation Council. Smil, V. (2003). The Earth’s biosphere: Evolution, dynamics, and change. MIT Press. Smith, D. I. (1998). Water in Australia: Resources and management. Oxford University Press. Speed, R., Shipp, A., Bond, N., Hardie, R., & Bonzi, C. (2020). Options paper: Framework for establishing environmental flows in the Ayeyarwady Basin. Prepared by Alluvium Consulting, World Wildlife Fund, Badu Advisory, LaTrobe University. Australian Water Partnership. State of the Environment Advisory Council. (1996). Australia, state of the environment 1996. CSIRO Publishing. Stein, J. L., Stein, J. A., & Nix, H. (2002). Spatial analysis of anthropogenic river disturbance at regional and continental scales: Identifying the wild rivers of Australia. Landscape and Urban Planning, 60(1), 1–25. https://doi.org/10.1016/S0169-2046(02)00048-8 Stein, J. A., Hutchinson, M. F., & Stein, J. L. (2012). National Environmental Stream Attributes v1 [Data set]. https://researchdata.edu.au/national-environmental-stream-attributes-v11/1273501 Stein, J. L., Hutchinson, M. F., & Stein, J. A. (2014). A new stream and nested catchment framework for Australia. Hydrology and Earth System Sciences, 18, 1917–1933. https://doi.org/10.5194/hess-18-1917-2014 Steinfeld, C. M. M., & Kingsford, R. T. (2013). Disconnecting the floodplain: Earthworks and their ecological effect on a dryland floodplain in the Murray-Darling Basin, Australia. River Research and Applications, 29(2), 206–218. https://doi.org/10.1002/rra.1583 Stewardson, M. J., & Guarino, F. (2018). Basin-Scale environmental water delivery in the Murray-Darling, Australia: A hydrological perspective. Freshwater Biology, 63(8), 969–985. https://doi.org/10.1111/fwb.13102 Stewardson, M. J., Walker, G., & Coleman, M. (2021). Hydrology of the Murray-Darling Basin. In B. Hart, N. Byron, N. Bond. C. Pollino, & M. Stewardson (Eds.), Murray-Darling Basin, Australia: Its future management (pp. 47–73). Elsevier. Stone, D. A. (2012). Policy paradox: The art of political decision making (3rd ed.). W. W. Norton & Co. Sturgess, G. L., & Wright, M. (1993). Water rights in rural New South Wales: The evolution of a property rights system. Centre for Independent Studies. Sullivan, K. (2019). Murray-Darling Basin cop hits out as ministers seek police protection amid threats. ABC News. https://www.abc.net.au/news/2019-11-29/police-protection-for-ministers-in-murray-darling- basin/11747822 Sumner, M., Cook, D., & Herenu, D. (2021). ozmaps R package. https://CRAN.R-project.org/package=ozmaps Valuing water: The Australian perspective 98 Environmental values of water in the Murray-Darling Basin Swirepik, J. L., Burns, I. C., Dyer, F. J., Neave, I. A., O’Brien, M. G., Pryde, G. M., & Thompson, R. M. (2016). Establishing environmental water requirements for the Murray-Darling Basin, Australia’s largest developed river system. River Research and Applications, 32(6), 1153–1165. https://doi.org/10.1002/rra.2975 The Economist. (2003). Survey: Liquid assets. The Economist, 368, 13. The Economist. (2010). Trade and conserve. The Economist, 395, S16–S17. The Economist. (2019). Surface tension. The Economist, 430, S7–S9. Tompson, W., & Price, R. W. R. (2009). The political economy of reform: Lessons from pensions, product markets and labour markets in ten OECD countries. Organisation for Economic Co-operation and Development. Turral, H., Connell, D., & McKay, J. (2009). Much ado about the Murray: The drama of restraining water use. In F. Molle, & P. Wester (Eds.), River basin trajectories: Societies, environments and development (pp. 263–291). CABI. https://doi.org/10.1079/9781845935382.0263 Van Dijk, A. (2006). Risks to the shared water resources of the Murray-Darling Basin: Report to the Murray-Darling Basin Commission. Murray-Darling Basin Commission. Veldkamp, T. I. E., Wada, Y., Aerts, J. C. J. H., Döll, P., Gosling, S. N., Liu, J., Masaki, Y., Oki, T., Ostberg, S., Pokhrel, Y., Satoh, Y., Kim, H., & Ward, P. J. (2017). Water scarcity hotspots travel downstream due to human interventions in the 20th and 21st century. Nature Communications, 8, 15697. https://doi.org/10.1038/ ncomms15697 VEWH. (2015). Seasonal watering plan 2015–16. Victorian Enviromental Water Holder. Vietz, G. J., Lintern, A., Webb, J. A., & Straccione, D. (2018). River bank erosion and the influence of environmental flow management. Environmental Management, 61(3), 454–468. https://doi.org/10.1007/ s00267-017-0857-9 Vivès, B., & Jones, R. N. (2005). Detection of abrupt changes in Australian decadal rainfall (1890–1989). CSIRO Atmospheric Research. Vörösmarty, C. J., & Sahagian, D. (2000). Anthropogenic disturbance of the terrestrial water cycle. BioScience, 50(9), 753–765. https://doi.org/10.1641/0006-3568(2000)050[0753:ADOTTW]2.0.CO;2 Vörösmarty, C. J., McIntyre, P. B., Gessner, M. O., Dudgeon, D., Prusevich, A., Green, P., Glidden, S., Bunn, S. E., Sullivan, C. A., Liermann, C. R., & Davies, P. M. (2010). Global threats to human water security and river biodiversity. Nature, 467, 555–561. https://doi.org/10.1038/nature09440 Vörösmarty, C. J., Pahl-Wostl, C., Bunn, S. E., & Lawford, R. (2013). Global water, the Anthropocene and the transformation of a science. Current Opinion in Environmental Sustainability, 5(6), 539–550. https://doi.org/10.1016/j.cosust.2013.10.005 Walker, K. F. (1985). A review of the ecological effects of river regulation in Australia. Hydrobiologica, 125, 111–129. Walker, B. (2019). Murray-Darling Basin Royal Commission report. Murray-Darling Basin Royal Commission. Walker, G., & Prosser, I. (2021). Water quality: Land use impacts on salinity, sediments, and nutrients. In B. Hart, N. Byron, N. Bond. C. Pollino, & M. Stewardson (Eds.), Murray-Darling Basin, Australia: Its future management (pp. 109–136). Elsevier. Walker, J., Bullen, F., & Williams, B. G. (1993). Ecohydrological changes in the Murray-Darling Basin. I. The number of trees cleared over two centuries Journal of Applied Ecology, 30, 265–273. Wang, Q. J., Walker, G., & Horne, A. (2018). Potential impacts of groundwater sustainable diversion limits and irrigation efficiency projects on river flow volume under the Murray-Darling Basin Plan: An independent review. Murray-Darling Basin Authority. Water for the Environment Special Account Review Panel. (2020). First review of the Water for the Environment Special Account: Report to Commonwealth Minister for Water Resources as required under Section 86AJ of the Water Act 2007. Water for the Environment Special Account Review Panel Valuing water: The Australian perspective Environmental values of water in the Murray-Darling Basin 99 Watts, R. J., Kopf, R. K., McCasker, N., Howitt, J. A., Conallin, J., Wooden, I., & Baumgartner, L. (2018). Adaptive management of environmental flows: Using irrigation infrastructure to deliver environmental benefits during a large hypoxic blackwater event in the Southern Murray-Darling Basin, Australia. Environmental Management, 61(3), 469–480. https://doi.org/10.1007/s00267-017-0941-1 WBG. (2018). Environmental flows for hydropower projects: Guidance for the private sector in emerging markets. World Bank Group. WCIC. (1971). Water resources of New South Wales. Water Conservation and Irrigation Comission. Webb, J. A., Ryder, D. S., Dyer, F., Stewardson, M. J., Grace, M. R., Bond, N. R., Frazier, P., Ye, Q., Stoffels, R. J., Watts, R. J., Capon, S., & Wassens, S. (2018). It will take decades, but the Murray Darling Basin Plan is delivering environmental improvements. The Conversation, 1 May 2018. Weir, J. K. (2011). Water planning and dispossession. In D. Connell, & Q. Grafton (Eds.), Basin futures: Water reform in the Murray-Darling Basin. ANU Press. https://doi.org/10.22459/BF.05.2011.10 Whalley, R. D. B., Price, J. N., Macdonald, M. J., & Berney, P. J. (2011). Drivers of change in the social-ecological systems of the Gwydir Wetlands and Macquarie Marshes in northern New South Wales, Australia. Rangeland Journal, 33(2), 109–119. https://doi.org/10.1071/RJ11002 Whittle, L., Galeano, D., Hughes, N., Gupta, M., Legg, P., Westwood, T., Jackson, T., & Hatfield-Dodds, S. (2020). Analysis of economic effects of water recovery in the Murray-Darling Basin. Australian Bureau of Agricultural and Resource Economics and Sciences. Whitworth, K. L., Baldwin, D. S., & Kerr, J. L. (2012). Drought, floods and water quality: Drivers of a severe hypoxic blackwater event in a major river system (the southern Murray-Darling Basin, Australia). Journal of Hydrology, 450, 190–198. WEF. (2019). The global risks report 2019 (14th ed.). World Economic Forum. Wolfenden, B. J., Wassens, S. M., Jenkins, K. M., Baldwin, D. S., Kobayashi, T., & Maguire, J. (2018). Adaptive management of return flows: Lessons from a case study in environmental water delivery to a floodplain river. Environmental Management, 61(3), 481–496. https://doi.org/10.1007/s00267-017-0861-0 Young, W., Bond, N. R., Brookes, J., Gawne, B., & Jones, G. J. (2011). Science review of the estimation of an environmentally sustainable level of take for the Murray-Darling Basin: Final report to the Murray-Darling Basin Authority. CSIRO Water for a Healthy Country Flagship. Valuing water: The Australian perspective 100 Environmental values of water in the Murray-Darling Basin The Australian Water Partnership is an Australian Government international cooperation initiative helping developing countries in the Indo-Pacific region, and beyond, work towards the sustainable management of their water resources. Australian Water Partnership UC Innovation Centre (Bldg 22), University Drive South, Canberra ACT 2617, Australia T +61 2 6206 8320 E contact@waterpartnership.org.au waterpartnership.org.au