There are three reasons to believe that the central role played by the Murray-Darling Basin (MDB) in Australian agricultural production is unlikely to continue much into the 21st century.

The first is climate change. The second is an increased understanding of the relationships among surface water, groundwater and ecology and the third is an increased awareness of ecosystem services among the public, policy makers and politicians.

This increased awareness of ecosystem services reduces the historically high value placed on near-market products (such as timber, wool, fruit) and elevates the historically ignored long-term values of services that are distal from the market (such as pollination services, soil stabilisation, dewatering of landscapes). Let me unpack this a little.

First, the impact of climate change. Australia was subject to oscillations in climate long before humans arrived. The cycle of El Niño and La Niña has dominated the coming and going of flood and drought.  This cycle has typically had an approximately 4 to 7 year periodicity. However, superimposed on this over the past 200 years has been the phenomenon of climate change. Increased levels of atmospheric CO2 concentration have resulted in increased sea and land surface temperatures with resultant changes in the distribution (both spatial and temporal) of rainfall, the frequency and intensity of storms and a change in the fire regime (itself determined by humidity, plant growth, management actions and temperature). Clearly, for an agricultural basin so strongly dependent on irrigation, any reductions in water availability arising from a change in the amount or timing of rainfall, will have dire impacts. It is likely that we have entered a long-term phase involving a reduction in the amount of rain falling on the MDB and this on its own must pose a significant threat to the viability of current practices in the MDB.

The second threat to the MDB is the increasingly widespread understanding that if we allocate the same bucket of water twice to two competing interests, it is highly likely that neither interest will be happy with the outcome and the environment will also suffer. Overallocation (a polite way of saying “giving the same water to multiple users”) has been widespread across Australia for a long time and resistance to change on this issue poses the main threat to the MDB. 

There is also increased awareness that terrestrial ecosystems, as well as in-stream ecosystems, are frequently reliant on groundwater for their long-term viability - trees need to drink too. They may need groundwater every month of every year to survive or they may need groundwater for a few months every couple of years to survive, but the removal of groundwater from such ecosystems can be devastating. As there are many groundwater-dependent ecosystems within the MDB, removal of the groundwater will obviously devastate large sections of the basin, including forests, woodlands, wetlands and rivers. The paradoxical result from an increased knowledge and understanding of sustainable water allocations and groundwater dependent ecosystems is that management options will be more limited in the future than they are now. By allocating water to the environmental health of all GDEs we must by definition reduce the allocation to irrigation and other activities.

Thirdly, the viability of the MDB as it currently operates is threatened by the increasing value being placed on ecosystem services that don’t have an immediate market value associated with them but which nevertheless have long-term value. Examples of such services include the pollination value of insects in woodlands and forests, the dewatering function of forests to stop dryland salinity and river salinisation, and the carbon sequestration capacity of plantation forests. If a more realistic, longer-term perspective is given to the cost-benefit analyses of competing claims made on water and land-use practices – for example using a 30 to 100 year return time rather than a 2 – 20 year return time – it is likely that many current practices which yield positive cash benefits in the short term will be found to be unviable in the longer term.

To respond to these threats, the first requirement is to remove all double-counting of water volumes and reduce the total volumes allocated accordingly. As a direct consequence of this, a management regime that treats ground and surface waters as a connected flow-through system is essential.  Use of groundwater will also need to be policed.

The second requirement is to ensure that an adequately long-term, robust, and transparent cost-benefit analysis is applied to all land-use and water management options. For example, what is the optimal strategy when considering the establishment of a new plantation? Should the plantation be established, thereby gaining the value of the timber, increased soil stability and a dewatered landscape, or should we not establish the plantation because of its negative impact on groundwater recharge and river flows down slope? Similarly, within a single catchment, what are the long-term cost-benefit outcomes when comparing irrigation of pasture, rice and cotton on the one hand, with the maintenance and enhancement of ecosystem services provided by groundwater dependent ecosystems, rivers, riparian forests and wetlands, on the other? It is vital that such cost-benefit analyses factor in the likely climate over the next century rather than the climate observed for the past century.

The third requirement is to move to a share entitlement system, as discussed recently by Professor Mike Young and Dr Jim McColl, which explicitly incorporates environmental purposes into the system.  Just as the share value of company can rise and fall on a daily basis, so the share value (the volume of water associated with each share) can vary seasonally according to the current availability of water. Whether the environment should receive allocation of water ahead of all other uses is open to deliberation.
 
Finally, a sufficiently transparent and fair compensation package must be in place to effect large-scale, timely change in a manner that will ensure the long-term viability of all stakeholders in the MDB. The timing, magnitude, and equitability of payments needs to be considered without delay.

In conclusion, the MDB is an important social, ecological and economic region of Australia. Its management during the 20th century has lagged behind the changes in science, public values and climate that occurred during that period. The probability that we can get it right now is about the same as the probability that we can get it very wrong - but getting it wrong now may preclude us ever getting it right in the future.

Professor Derek Eamus is a Senior Land and Water Research Fellow at the University of Technology Sydney. He is principal author of a book entitled "Ecohydrology: vegetation function, water a resource management", which details the interaction of water, climate and vegetation of the Australian continent, published by CSIRO (2006).