The future of water

The future of water

Water is pivotal to New Zealand.

Water is the basis of our export earnings. Without it we can’t grow Granny Smiths, pinot grapes or dairy cows.

It’s at the heart of our recreation and leisure – kayaking, rafting, fishing, swimming, skiing and more.

Water is an essential part of our New Zealand brand. Think of the Remarkables reflected in Lake Wakatipu, or the braided rivers of Canterbury, or any other 100% Pure New Zealand scene.

Water is critical to our future and must be used wisely.

That’s why water reform is such a big issue, and why recommendations on water management by BusinessNZ and the Land & Water Forum are gaining attention.

New Zealand is in the enviable position of being a water-rich country, but we are feeling the effects of over-allocation and intensive water use in some catchments.

Now is the time to get a better understanding of what is needed to guide water use in the future.

The recent report of the Land & Water Forum was a good start in setting out the broad span of what is needed, including more accurate measurement of the resource, improved allocation methods and quantity and quality targets.

However, much more detail and more work is required to achieve these broad goals.

Public education and debate are also essential so all New Zealanders can understand the issues and play a part in caring for this wonderful resource.

Water issues are surprisingly complex and can be prone to misunderstanding.

Water falls freely from the sky, but its provision to every house and business is not free, as there is a significant infrastructure cost involved in managing water permits and catching, treating, storing and delivering the water.

This work is undertaken by regional councils and paid for by rates.

This arrangement is not very transparent – by and large it is not possible to determine from rates demands exactly how much water is used, how it is managed, and at what cost.

Nor is there information readily available to ratepayers on opportunity costs arising from regional council decisions, or information on other options than those currently employed.

We are now at the point where better measurement systems are needed so that water management can become more transparent and efficient.

The system for allocating water permits also needs to be put on a sounder footing.

Currently, water permits are allocated on a first-come first-served basis. This worked well when our population was smaller and the demands on our water resources were less, but some catchments are now under stress.

The Sustainable Business Forum – a forum of member companies of BusinessNZ with a strong interest in environmental and business issues – has been working with BusinessNZ on a range of water issues.

The Forum’s recommendations are a good basis for building on the initial findings of the Land & Water Forum.

They cover areas such as accurate measurement, fair allocation, incentives for sustainable use, property rights, trade in water consents and quality.

Future articles will look at some of these aspects of water management.

Perhaps the most important issue to get right first is a framework for management.

A good way forward would be to adopt what already works well in other areas of resource management.

One option is to adopt the principles of the individual transferable quota (ITQ) approach such as used in New Zealand fisheries – a widely regarded system that many other countries have now followed.

It allows for good conservation management while achieving flexibility for users of the resource, and allows for the resource to flow to its highest value use.

It would place a cap on the overall amount of water that could be taken from reserves, preventing depletion.

Quota-holders – i.e. the holders of water permits – would have constraints placed on the amounts of water that could be drawn.

They would be required to keep full records of their drawings and would bear significant penalties for any false reporting.

And they could buy, sell or lease their quotas, bringing considerably more flexibility than is currently the case.

The power of the ITQ method is that it is a market-based tool that does the job of water allocation in a sustainable, transparent and fair way, without having the drawbacks of an overly regulated approach.

This is one potential framework among several possibilities.

In future articles I will look at some other possibilities for managing our water resource and I would appreciate your feedback and suggestions on this important topic.




16 Dec, 2010

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