Irrigation, water markets and sustainability in Australia's Murray-Darling Basin

With a climate similar to southern Italy and Greece the Murray-Darling River Basin extends over more than a million square kilometers in the south-east corner of Australia. It contains most of the country's irrigation and has been at the center of the national debate about water management reform for more than three decades. One of the most controversial issues has been the introduction of a catchment-wide water market. Critics argue that markets are strengthening pressures for short-term economic development and making it increasingly difficult to achieve more sustainable river management and adjust to climate change. But during the recent very severe millennium drought the water market allowed water to be moved fairly easily from low value agricultural uses to high value uses resulting in almost no overall economic loss. Water reform in the MDB has long been subject to intense conflict between the national government and the four state governments in the catchment (and between the state governments against each other). The Australian national government is attempting to reshape the water governance framework through the introduction of a comprehensive Basin Plan backed by a large funding package that includes the equivalent of approximately $3 billion US to purchase water entitlements to achieve environmental improvements. The Basin Plan is designed to reverse over a century of development-induced decline and protect the MDB from the predicted impacts of climate change. While the Basin Plan falls short of its objectives in a number of significant ways it is still a serious effort to implement sustainable river management at a catchment wide scale. As such it provides a case study of international significance for the long running debate about how irrigation can be made sustainable and compatible with the increasing pressure to improve riverine environments.