Australia's Water Resources: From Use to Management

Chapter 1

Water resources in time and space

Introduction

Water is a basic component of human existence and the support systems on which people depend. Along with air, water is one of the most fundamental requirements for the survival of living things. No other single substance has a greater impact on the environment and the uses to which it is put. Water not only moulds the landscape, but also influences the pattern of activities that humans can undertake.

Water occurs in different forms across the Earth. The greatest proportion of the world’s water, approximately 97.5 per cent, is held in the oceans and inland lakes and waterways. Only a very small part of the total is fresh water and much of this is locked up in ice caps, glaciers, the atmosphere, the soil or deep beneath the ground (Figure 1.1).

Figure 1.1 Global water system. These circles show just how little of the world’s total water supply (A) is fresh water (B) and little of that amount is actually usable fresh water (C). Source: Environment Canada n.d.

Thus, despite an apparent abundance of water, the greater part ‘is available at the wrong place, at the wrong time or with the wrong quality’ (Falkenmark and Lindh 1974, p. 114). Writing more recently, Falkenmark (2000) pointed out that whether water is scarce or abundant depends on the characteristics of the freshwater resources under consideration. She points out that past water management has focused on liquid ‘blue water’ flows, ignoring the vapour flow of so-called ‘green water’ that helps to sustain plant production and ecosystems. Falkenmark maintains that global green-water flow is almost twice as large as the gross blue-water flow. Sharing the green-water resource, rather than simply manipulating accessible blue-water flows, should be a long-term priority in managing water in river basins. This perspective adds a new dimension to the hydrologic cycle (see Figure 1.2 below) in which a larger proportion of green-water flow might be appropriated for human use instead of diverting blue water, which can cause downstream river depletion and resource degradation.

Human use of water resources

Despite these revealing insights into the occurrence of water, people still seem most concerned about the quantity and quality of accessible, uncontaminated, liquid fresh water available for use at the Earth’s surface. The picture is complicated by contrasting demands placed on the available fresh water. These demands depend upon population characteristics and economic and socio-cultural levels of development. In effect, the same amount of available water can represent different levels of resource potential to different groups (see below). Particular difficulties can arise when people choose to live in an area with an inadequate water supply, or where water-intensive agriculture or industry imposes heavy demands on a limited water supply.

A distinction can be made between extractive uses for domestic, agricultural or industrial purposes that remove water from its source; on-site uses of water consumed by wetlands, riparian vegetation and evaporation; and in-stream or flow uses, including water for navigation, waste dilution, hydro-electric power and recreation (United States National Water Commission 1973).

Another useful distinction commonly made is between so-called ‘consumptive’ uses of water and ‘non-consumptive’ uses. In the first category, the ‘consumed’ water is not necessarily used up, although its capacity to function as a resource can be impaired. The water may be wholly or partially processed, contaminated or otherwise transformed. Some of the water withdrawn in this way could be returned to the atmosphere by evapotranspiration, incorporated into finished products or returned to circulation as drainage water or groundwater. In non-consumptive usage, water quantity and quality remain largely unaffected and the water is used essentially in its original setting.

These broad categories conceal great variations in patterns of water use, regionally and during different phases of economic growth and change. Countries at an early stage of development use water principally for domestic supply, primary production, fishing, water transport and, perhaps, for simple energy generation. However, as noted earlier, developed economies impose heavier demands on water and have more complex patterns of usage. For example, the comparatively minute water needs of a primitive village are multiplied many times in contemporary households in the industrialising world, with sewerage systems, washing machines, dish-washers and sink disposal units, not to mention swimming pools, spas and expanses of landscaped lawns and gardens.

However, even residential water demands become insignificant when compared with the massive amounts of water consumed in agriculture. On a global scale, agricultural use accounts for up to 80 per cent of total water withdrawals, with the greatest demands being made by irrigation for intensive production of food and fibre. Even assuming significant advances in the efficiency of water use (see Chapter 7), agriculture will continue to use large amounts of water for the foreseeable future (Lvovitch 1977).

Until recently, the focus of most conflicts over water was on consumptive uses, such as those in agriculture or industry. These claims are now being challenged by demands on water for non-consumptive uses, such as in nature conservation, habitat protection or outdoor recreation (see Chapter 9). The greatest pressure on water for these purposes comes from the highly industrialised nations of the Western World, including Australia. Indeed, this increasing concern over environmental quality has been portrayed by some as a privileged class movement capable of being articulated only by fortunate leisured groups in developed economies (Harry, Gale, and Hendee 1969). Certainly, the strongest challenges being mounted against further appropriations of water for consumptive use are in places like Australia and North America. To concerned groups in these countries, water is an integral part of the natural environment and is valued for its ecological and scenic functions. For these groups, water offers opportunities for aesthetic appreciation and outdoor recreation in a wilderness, or at least relatively undisturbed, setting. Conflict is inevitable between proponents of this viewpoint and those who value water for more materialistic uses.

Water as a resource

The function and value of water as a resource depend upon its form, characteristics and location in relation to human needs. The mere physical presence of a body of water does not constitute a resource. Any number of attributes or constraints, such as size, depth, quality or accessibility, may prevent the water from being used as a resource. Creative use of a potential resource requires the satisfaction of certain conditions. In particular, the existence of an appropriate socio-economic and cultural frame of reference is necessary, in which water, in common with other elements of the environment, can acquire a function as a means of production, or for the attainment of other socially valued goals.

Consideration of resource phenomena in functional terms helps explain the changing roles and fluctuating values associated with water over time and space. To a marked degree, resource functions are dynamic, reacting to changes in economic, social and technological conditions and contrasting perceptions among potential user groups. Materials, once seen as valuable resources, can lose their value and be discarded as substitutes are found. Charcoal and flint are examples of materials that once functioned as important resources, but are now no longer needed. Similarly, water resources that are currently viewed as valuable can lose their function when circumstances change, as demonstrated by the de-commissioning of dams and reservoirs. On the other hand, previously neglected potential resources may be harnessed to meet emerging demands (Pigram 1986).

The dynamic character of water as a resource can readily be demonstrated by reference to the range of functions identified with particular streams or water-bodies over time. A river, perhaps initially valued as a convenient water supply, may subsequently acquire a function as a means of transport, a source of power, or even as a waste disposal site. The emerging roles of water for outdoor recreation and as a focus of environmental interest are further evidence of the way in which changing perceptions of the resource are reflected in pressures to adjust its function.

Equally fascinating is the existence of contrasting interpretations placed on an essentially homogeneous resource base. Water resources, again, are a good illustration. For example, the same physical attributes of a river valley may be viewed differently by those inhabitants prepared to take advantage of the opportunities offered. Different groups of people occupying the same environment may perceive totally different resource potential. For some, a valley and its waters represent a tranquil and productive setting in which to carry on traditional farming pursuits. For others, the waters of the valley are there to be harnessed for intensive irrigated agriculture (see Chapter 7). Contrasting perceptions of what are seen as appropriate resource functions for water help explain conflicts that arise over its allocation and use. This theme will recur frequently in the issues examined in later chapters.

Given these contrasting attitudes to water and the diversity of functions perceived for this versatile resource, it is not surprising that disputes arise over its allocation and distribution. The availability of water and its occurrence in nature cannot always provide for all the demands made upon it. For this reason, people seek to interfere in the operation of the hydrologic cycle to store, regulate, divert and drain water in an attempt to bring some degree of control over particular elements of the system to meet human needs. Not all of these efforts are carefully planned, coordinated or implemented. Human intervention in the hydrologic cycle helps explain many of the water-related problems discussed in this book.

The hydrologic cycle

Powered by the sun, the hydrologic cycle, (Figure 1.2) is the endless circulation of water and water vapour from the atmosphere to the Earth, and back again, through the processes of condensation, precipitation, evaporation and transpiration. The sun’s radiation provides the energy for evaporation of moisture from the hydrosphere (principally the oceans) and for the redistribution and circulation of water vapour across the globe. Much of the water returns to the surface of the Earth via condensation and precipitation. Most of the precipitation falls in the seas, but that portion falling on the land surface and vegetation represents the ongoing replenishment of the freshwater resources on which life depends.

The hydrologic cycle is a dynamic system involving the transfer and exchange of moisture from one state and one phase of the cycle to another. Although the rate of water turnover in any particular phase is highly variable, the total amount of water in circulation does not alter in any meaningful sense. The hydrologic cycle is the key to the Earth’s climates and is the prime mover of solar energy around the globe. Without it, and the accompanying greenhouse effect, large parts of the world would be uninhabitable.

Figure 1.2 The hydrologic cycle

Yet, the operation of the cycle, and, hence, the availability of water, are by no means uniform. If the hydrologic cycle were regular and predictable, human settlement and resource use, both in the short and longer term, could adjust to the global distribution of fresh water. Fluctuations, however, do occur and should be expected. Human activities, such as modification of vegetation and soil cover, can have an indirect effect on the natural processes involved in the water cycle. This may change the pattern of circulation or the quality of water. Moreover, settlement patterns and cultural practices may contribute to atmospheric changes, at least at the microlevel, and ultimately to the rate and characteristics of water passing through the system.

Even if left undisturbed by human actions, spatial and temporal aberrations in the natural workings of the cycle can still lead to widespread flooding or prolonged drought. The abrupt reversal of seasonal conditions from time to time in inland Australia – from disastrous drought to equally catastrophic floods – is a good illustration of the fickle nature of the hydrologic cycle (see Chapter 2). It is precisely such departures from the ‘norm’, especially in situations of expanding demand for water, that provide the rationale for attempts at human intervention in the cycle’s operation. For example, the risk of recurring water surplus is used to justify calls for flood mitigation measures and drainage schemes. On the other hand, the probability of frequent periods of drought may prompt the construction of water storages and regulatory works, development of irrigation schemes and widespread utilisation of groundwater.

Quite apart from mitigation measures initiated in reaction to extremes of weather and climate, some ambitious water-management projects have also been undertaken as part of a comprehensive approach to drainage-basin planning. Such schemes are typically large in scale and can involve massive diversion works and widespread alteration to natural drainage patterns. Examples include the Central Valley Project in California and the Snowy Mountains Scheme in Australia (see Chapter 6).

Some of the most significant and effective efforts to manipulate the hydrologic cycle occur in the run-off phase, that is, after the water has reached the Earth’s surface and before it has been transferred to the oceans or to groundwater storage, or returned to the atmosphere. Examination of the various segments of the cycle shows that this phase offers the most obvious potential for reorganisation of water resources in closer alignment with human needs. In simple terms, intervention commonly takes the form of delaying run-off by means of storages of some kind to allow diversion of stream flow to specific areas for specific purposes. Dams are constructed, regulatory and diversion works are built, and pumps and reticulation systems are installed for the transfer and release of water to rural and urban end-users (Figure 1.3).

Intervention has been attempted in other phases of the cycle and can take various forms. Desalination, particularly of sea water, is probably the most effective measure, although the costs, in terms of economics and energy requirements, and environmental implications, make the realisation of net benefits a debateable proposition (see Chapter 5). Rainmaking – the artificial inducement of condensation and precipitation – has seen considerable experimentation, especially in Australia, with mixed success. Artificially recharging groundwater aquifers is another, and perhaps more promising, means of regulating the natural processes of the hydro-logic cycle where conditions are suitable (see Chapter 2).

More than 30 years ago, Powell (1975) estimated that some 10 per cent of the national wealth of the United States was tied up in capital developments designed to alter the workings of the hydrologic cycle: to collect, direct and store water and to distribute it, cleanse it and return it to the natural system. The structures involved range from simple impediments to large storage facilities, aqueducts, canals, sewerage treatment works, reclamation projects, cooling devices and hydro-electric power plants. The pervasive human influence on the hydrologic cycle means that it is now much more than a natural system. Increasingly, it has also become a multi-faceted technological, social, economic and political system. Decisions at many levels involve water allocation, distribution and application and encompass individuals, groups, corporations and public agencies on a local, regional, national and even international scale.

Figure 1.3 Interruption of the hydrologic cycle. Source: Valentine, 1955, p. 30

Falkenmark (1977) points out that the manipulation of the hydrologic cycle is often a consequence of water-related disturbances attributable to secondary, and largely unforeseen, effects of prior human intervention. In other words, it is becoming apparent that efforts to organise and control the world’s stock of fresh water, and to correct imbalances between supply and demand, are contributing to environmental disturbance and degradation. This does not mean that people should give up the struggle to achieve some measure of control over the dynamic processes of the water cycle and merely try to adapt to the constraints imposed by nature. However, consideration of the known and possible consequences should be a pre-condition of all attempts at large-scale manipulation of these processes (see Chapter 8).

An appreciation of the spatial dimensions of water availability and water use helps demonstrate the global imbalance that exists in the distribution of fresh water resources. It also contributes to an understanding of the efforts that are made to redress the balance by large-scale transfers of water and to manipulate the operations of the hydrologic cycle to human advantage.

In this context, it pays to realise that the repercussions of human interference in the hydro-logic cycle are no longer local. Water is a global concern and hydrological systems recognise no national boundaries. Different groups of people, and perhaps different nations sharing the same drainage basin, are linked by inter-dependence on common water resources. Changing the availability of water by one party can have far-reaching consequences – physically, economically, socially and politically – as seen in many parts of the world today.

World water resources

As noted earlier, at first glance the world would seem to have ample fresh water overall. However, a closer look at water supply set against water demand reveals marked global imbalance. Despite the Earth giving the impression from space of a ‘blue planet’ with abundant fresh water, the greater part of the world’s water is held as salt water in the oceans and seas. From the perspective of water availability, much of the Earth’s fresh water occurs in areas that are sparsely inhabited, such as Siberia and Northern Canada. Moreover, closer examination reveals a worsening situation in many parts of the globe and marked disparities in the availability of usable supplies of fresh water.

The scarcity of water on a global scale is well documented. United Nations forecasts predict that world population could reach 12 thousand million people by 2050. Given that 1700 m³/ capita/year of fresh water is considered adequate to meet the needs of the human population and the environment, and water scarcity is defined as less than 1000 m³/capita/year, almost half the world population could be living in water-deficient countries in 50 years. Moreover, lack of adequate sanitation, and deterioration in water quality, worsen the outlook (Pigram 2000b).

At the same time, new trends are appearing and intensifying to place further pressure on water supplies. Economic and institutional ‘globalisation’ is already affecting water use and management practices in both developed and developing countries. Increased trade in agricultural and industrial products, globalisation of investments and financial markets, privatisation of water systems, and advances in communication, information, and biotechnology are all beginning to alter the patterns of supply and demand for water. New management systems to cope with this rapidly transforming and complex new world are required, but are only poorly explored at present.

Yet, in some regions the demand for water is not rising as rapidly as predicted and, in others, the demand has actually fallen. There are at least two reasons for this. First, the population in most Western, industrialised countries is declining, although this is often offset by the emergence of more diverse demands and sophisticated uses for water, contributing to inflated levels of scarcity well beyond basic human demands and ecosystem requirements. Secondly, programs to encourage water conservation, recycling and reuse appear to be having an effect.

In the United States, for example, the amount of water consumed per person has decreased by more than 20 per cent, from a peak in 1980, thanks to successful efforts at conservation. In 1965, Japan used approximately 13 million gallons of water to produce $1 million worth of commercial output. By 1989, the water needed for the same level of output had dropped to just 3.5 million gallons – an almost four-fold increase in productivity (Gleick, 2001). The World Business Council for Sustainable Development reported in June 2005 that people in Western Germany have cut household water consumption by 20 per cent since unification in 1990, while in the former East Germany water use has fallen by 50 per cent. Environmentally-friendly Germans are apparently so good at not wasting water that health authorities have issued a nationwide plea for them to start wasting water – to keep water supply systems from becoming stagnant! (http://www.wbcsd.ch/Plugins/Docsearch/details.asp?strDocTypeIdList).

However, these examples are seriously misleading because, unfortunately, the distribution of available fresh water across the globe is starkly non-uniform. The true picture is that at least one-third of the world’s land area is deficient in surface water and groundwater and there are numerous places where precipitation and run-off are not dependable enough to service human needs. When this distorted pattern of water distribution is set against demographic and socioeconomic circumstances, even greater discrepancies are revealed. For example, some of the world’s largest rivers flow through sparsely inhabited areas with minimal water demands, such as the Amazon Basin and northern Canada. The situation is made worse when people, by choice or by force, live in areas with an inadequate water supply, or where water quality is generally unfit for human consumption. Reference also needs to be made to population characteristics and the level of economic and socio-cultural development for a full explanation of the value of water resources and the extent of water scarcity in a functional sense.

The key challenges to be faced in achieving water security were summarised in the Second World Water Forum at The Hague in March 2000. Whereas the forum attracted criticism as being long on rhetoric and short on tangible action, it did present the essential pathways towards a more water-secure world (Global Water Partnership, 2000):

meeting basic human needs of water and sanitation through a participatory process of water management

achieving food security through more efficient and equitable allocation and use of water for food production

protecting the integrity and sustainability of ecosystems

sharing water resources between uses and users and within and between states through sustainable river-basin management

managing risks from water-related hazards of drought, flood and pollution

valuing water to reflect its economic, social, environmental and cultural values and moving towards pricing water services to reflect the cost of provision

ensuring good governance of water in the interests of all stakeholders.

These challenges echo the theme of the 10th World Water Congress in Melbourne (Pigram 2000b). The theme, ‘Sharing and Caring for Water’, serves as a powerful reminder of the urgency of measures to augment the availability and accessibility of good quality fresh water, and balance competing claims to the resource in an increasingly thirsty world.

Several recent studies have been carried out to alert world governments and international organisations to an impending crisis confronting the Earth’s capacity to support an increasing population. Among these is a report by the International Food Policy Research Institute and the International Water Management Institute (Rosengrant et al. 2002). The study, entitled ‘Global Water Outlook to 2025’, questions whether there will be enough food for the 8 billion people predicted to populate the earth by 2025. Given that water is one of the main factors limiting future food production, a commitment to sustainable management of water, through appropriate policy instruments and institutional arrangements, is necessary to avert the crisis.

The study presents three alternative futures for global water and food, along with an assessment of the different outcomes and specific policy options linked to each. Under a ‘Business as Usual Scenario’, trends in water and food policy, management and investment, remain as they are. Institutional and management reforms are limited and governments are complacent about agriculture and irrigation. The result is a world poorly prepared for major challenges to the water and food sectors.

In a ‘Water Crisis Scenario’, increasing water scarcity combined with poor water policies, and reduced investment in water infrastructure, management and research, lead to growing food insecurity, especially in developing countries. In a ‘Sustainable Water Scenario’, improved policies for management of both surface water and groundwater resources, pricing reforms and scientific and technological advances, mean that growth in food production is maintained, universal access to piped water is achieved and environmental flows are increased markedly.

The authors of the study emphasise that, although a large part of the world is facing severe water scarcity, the impending water crisis can be averted if the ‘Sustainable Water Scenario’ is adopted. They warn, however, that improved institutional arrangements, management reforms and investments in upgraded infrastructure and technology, must be tailored to specific countries and drainage basins, and will vary according to relative conditions of water scarcity and the prevailing level of economic development and agricultural intensification.

In other words, the pathway to global water and food security will not be easy and caution is called for in endorsing the direct transfer of technology and experience in water management from one situation or region to another in the expectation that the outcome will be more-sustainable resource use. Questions arise, in particular, in regard to the potential for transfer of standards and practices from the developed world to the developing world, given contrasting political structures and priorities, and different living standards, cultural traits, systems of land tenure, technological and literacy levels, and financial and infrastructure constraints (Pigram 2001b).

Pursuing over-optimistic expectations that ‘North–South’ replication and exchange of experience and technology offer a ready solution to the water problems of developing countries is likely to lead to frustration in seeking unrealistic and unachievable outcomes. The preferred approach is to develop mutual understanding between water managers and water-using sectors in emerging nations of the developing world, and to encourage a benchmarking process involving the ‘South–South’ transfer of successful experience and better practice in water management.

However, given the grim scenarios facing the water-deficient regions of the globe, the means must be found whereby industrialised and developing nations, the water-rich and water-poor, and the public and private sector can be brought together to share knowledge and experience and to ensure that managerial expertise is coordinated and directed towards overcoming water scarcity. This is the mission of the global water community. Major international water organisations, including the World Water Council, the Global Water Partnership and the International Water Resources Association, are spearheading initiatives to facilitate such a transfer process and establish a knowledge bank and mutually beneficial arrangements to share accumulated water wisdom. These initiatives culminated in the Fourth World Water Forum held in Mexico City in 2006. The theme of the Forum, ‘Local Actions for a Global Challenge’, encapsulates the issues and the problems overshadowing the sustainable management of the world’s water resources into the 21st century.

Australia’s water resources – a changing perspective

The water situation in Australia provides a useful framework within which to examine some of the most pressing water issues currently facing industrialised and industrialising nations around the world.

In 2002, Australia’s senior scientific research organisation, CSIRO, issued a report that attracted considerable media attention (CSIRO 2002). The report was entitled ‘Future Dilemmas: Options to 2050 for Australia’s Population, Technology, Resources, and Environment’. Chapter 6 of the report focused on water resources and concluded that, under the best-case scenario, total managed water use in Australia could increase from the present level of about 24 000 gigalitres per year to more than 40 000 gigalitres per year by 2050. This would supply an estimated population of 32 million, assuming that 80 per cent of water – about 32 000 gigalitres per year – would be used for agriculture.

The report goes on to comment on the merits of making better use of ‘white water’ (from evapotranspiration and comparable with Falkenmark’s concept of ‘green water’) rather than stressing the ‘blue water’ cycle in rivers and lakes. Another useful concept raised is that of ‘embodied water’ – more generally termed ‘virtual water’ – which may be used in the manufacture of goods. This could result in the export of products requiring large amounts of water. Embodied water describes the amount of water needed to provide consumers with one dollar’s worth of goods or services. Agricultural products have the highest levels of embodied water (for example, rice has 7459 L/$ and cotton 1600 L/$), whereas service industries have the lowest (for example, banking and insurance has 7 L/$). (http://www.urbanecology.org.au/articles/water). At these rates, it takes approximately 1000 tonnes of water to produce one tonne of cereal. On balance, therefore, Australia exports a net 4000 megalitres of embodied water each year. The report questions the wisdom of exporting such a large proportion of water use on terms that may not be as favourable as they could be.

The report is important and timely in that it draws attention to the changing perceptions and use of water in Australia by a more socially and environmentally aware, water-sensitive population, and by an increasing number of decision-makers in administrative and political circles. There can be few situations and few resources that have undergone such a rapid transformation from development and use to management over such a short period. In this environment of change, further development of Australia’s water resources is seen as being the exception rather than the rule, and managing the existing available supplies to satisfy a range of functions is now recognised as the most rational response to widespread water scarcity. The report also reinforces the need for a forward-looking approach to the development of a coherent national water policy, an initiative that is taken up in the final chapter of this book.

As the CSIRO report suggests, water remains a fundamental resource for Australia. Whereas some economists reject the view that water is a prime constraint on Australia’s economic growth and population (Thomas 1999), water remains essential for human activities and underpins the nation’s economic sustainability. At the same time, it is important to remember that water is not a limitless resource. Australia is a relatively dry island continent, which is subject to frequent widespread drought and less frequent, but equally disastrous, flooding (see Chapter 2). In absolute terms, Australia is recognised as the driest inhabited continent (after Antarctica) and has less than 1 per cent of the world’s available freshwater resources. Yet, relative to population, Australia does have large areas of well-water land. Of all the Australian states, only South Australia could be regarded as having poor reserves of water per capita.

Population, of course, is only one measure of how closely water availability matches water need. Across the Australian continent the resource value of water varies according to the size, spacing and function of settlements, the social structure of the population and the nature of particular land practices. Isolation from markets, sources of supply of inputs and other factors of production, hampers the functional use of much well-watered land in Australia, especially in the north.

However, despite regional, local and temporal deficiencies, it does appear that, overall, Australia has sufficient fresh water to meet its present requirements. Yet, the view that water is scarce has persisted in this country since the earliest days of European settlement. It takes only disasters of the dimensions of the 1979–1983 drought, and the more recent periods of severe and prolonged drought, to reinforce widely held beliefs regarding the fragility of Australia’s water situation, and to focus the minds of governments on efforts to address the perceived crisis. It is not surprising, therefore, that, in these circumstances, dam construction and other water conservation measures become an easy solution to justify to a water-sensitive electorate.

In this context, it is easy to appreciate the increasing concern being expressed in Australia about whether adequate water supplies of suitable quality will be available in future to satisfy the predicted consumptive use by a growing urban population, and to sustain agricultural production and major energy-related projects. To add to the complexity, a series of environmental issues have emerged in recent years which have claimed a large share of water resources for non-consumptive uses.

These concerns were addressed in some detail by a wide-ranging study carried out at the close of the 20th century. The study was undertaken for the Australian Academy of Technological Sciences and Engineering and the Institution of Engineers, Australia. The ensuing report, ‘Water and the Australian Economy’, highlighted economic, technological, institutional and policy issues that will need to be resolved in water allocation and management to achieve economic and environmental sustainability (Thomas 1999).

The report acknowledges that demand for water is rising from increasing irrigation activity and in areas of rapid population growth, as well as from the obligation to provide environmental flows for healthier rivers. ‘The challenge for industries, governments and water resource managers is to strike a balance between these competing demands’ (Bennett 1999 p. 4). The report then projects future prospects for water demand and supply for Australian industries under defined scenarios of economic, technological and social change, in a comparable approach to that applied subsequently on a global basis by Rosengrant et al. (2002). The results suggest that if current trends were to continue, the water needs of industries would outstrip water availability by 2020–2021. However, an alternative, sustainable scenario, termed ‘Adaptive Management’, emerges from the study, based