Dr Jeff Connor on Optimisation as tool to explore climate change adaptation possibilities at the Landscape Science Cluster Seminar, May 2009

1. Optimisation as tool to explore climate change adaptation possibilities Dr. Jeffery Connor, Stream Leader Water Policy Options Assessment

3. Climate challenges Climate impacts on regional water supply and adaptation challenges

4. Re-live from 1938 2014

5. Long Run Climate Change Adaptation Evaluatoin -63 -38 -13 Runoff Change (%) -25 -15 -5 Rainfall Change (%) 4 2 1 Temperature Change (°C) Severe Moderate Mild

6. Climate impacts on regional water supply and adaptation challenges Inflows have dropped 68% but use has only dropped 12 Back to empty

7. Growing “unlicensed” water taking 0GL 1,200GL 2,400GL 3,600GL

8. Reforestation

11. Irrigation sector adaptation model 1

19. An optimal reconfiguration

25. Model Structure

27. Assets public and private benefits Private benefit to irrigators and supply firms from less cost to supply, when land use change allows system rationalisation Water conveyance infrastructure Public benefit from enhanced environmental condition, recreation opportunities if land is retired from irrigation converted to reserves Private benefit if residential development is allowed on contiguous land Private demand for carbon credits if land is revegetated High environmental and amenity value land along water courses, wetlands Public salinity benefit to down stream irrigators, municipal industrial water users as land becomes less utilised for irrigation Private demand for land for dryland farming Currently irrigated areas creating large River Murray salt loads Private benefit to irrigator as better land becomes more fully utilised for irrigation Soils Highly suited to irrigation Public or private benefits from change it asset use Asset

29. An optimal reconfiguration 0 11.1 120 $-5.5 $0 $1.7 $0 $4.7 $-11.9 Non-targeted Tender $6.5 $5.2 $4.1 $2.8 $3.9 Value of Dryland Ag $2.5 $2.5 $2.5 $2.5 $0 Sale of Carbon Credits 8.8 8.8 8.8 8.8 0 Carbon Sequestered (million tones CO2 -e ) 10.4 9.5 10.4 9.5 24.5 ECs Avoided 120 60 120 60 120 Water for Environment (GL) $71.0 $79.4 $1.5 $17.8 $-3.6 Total Benefits $3.8 $3.8 $3.8 $3.8 $0 Water Delivery Cost Savings $1.6 $1.4 $1.6 $1.4 $3.7 Downstream Salinity Cost Avoided $56.6 $66.5 $-10.5 $7.3 $-11.2 Value of Irrigated Ag. 100% for the Environment (40% less water) 50/50 New Irrigation/ Environment 100% for the Environment 50/50 New Irrigation/ Environment Targeted Tender (Upper Bound) Targeted Tender (Lower Bound) Salinity-targeted

31. Floodplain – lack of inundation is greatest risk to floodplain health

32. The Murray Darling Basin 1/7 of area of Australia ½ of value of crop production 80% of irrigation Highly allocated – 27% of natural flow Diversions capped in 1994 Water trade allowed since 1987 Increasing liberalised and Active temporary & Permanent markets

38. The genesis of today’s crisis: growing diversions, and extreme variability Extreme variability (repeated drought) Growing diversion, even with cap

39. Floodplain health impacts of climate change Area at risk from lack of inundation 1964 Area at risk from lack of inundation 2007

40. Floodplain health – current drainage management policy is reducing floodplain watertable risk, climate change will reduce this risk further 2050 Lindsay Point Floodplain high watertable floodplain risk Historic drainage rates Current drainage rates Moderate Climate change

42. Transdisciplinary and Collaborative Structure: River Corridor

59. An optimal reconfiguration

61. An optimal reconfiguration 0 11.1 120 $-5.5 $0 $1.7 $0 $4.7 $-11.9 Non-targeted Tender $6.5 $5.2 $4.1 $2.8 $3.9 Value of Dryland Ag $2.5 $2.5 $2.5 $2.5 $0 Sale of Carbon Credits 8.8 8.8 8.8 8.8 0 Carbon Sequestered (million tones CO2 -e ) 10.4 9.5 10.4 9.5 24.5 ECs Avoided 120 60 120 60 120 Water for Environment (GL) $71.0 $79.4 $1.5 $17.8 $-3.6 Total Benefits $3.8 $3.8 $3.8 $3.8 $0 Water Delivery Cost Savings $1.6 $1.4 $1.6 $1.4 $3.7 Downstream Salinity Cost Avoided $56.6 $66.5 $-10.5 $7.3 $-11.2 Value of Irrigated Ag. 100% for the Environment (40% less water) 50/50 New Irrigation/ Environment 100% for the Environment 50/50 New Irrigation/ Environment Targeted Tender (Upper Bound) Targeted Tender (Lower Bound) Salinity-targeted

63. Assets public and private benefits Private benefit to irrigators and supply firms from less cost to supply, when land use change allows system rationalisation Water conveyance infrastructure Public benefit from enhanced environmental condition, recreation opportunities if land is retired from irrigation converted to reserves Private benefit if residential development is allowed on contiguous land Private demand for carbon credits if land is revegetated High environmental and amenity value land along water courses, wetlands Public salinity benefit to down stream irrigators, municipal industrial water users as land becomes less utilised for irrigation Private demand for land for dryland farming Currently irrigated areas creating large River Murray salt loads Private benefit to irrigator as better land becomes more fully utilised for irrigation Soils Highly suited to irrigation Public or private benefits from change it asset use Asset

64. Water trade in diversion not evapotranspiration 100 ML Unconfined Aquifer 50 ML Water that returns to the aquifer 45 ML Actual amount used 5 ML Evapo- transpiration Drainage

65. Implications of diversion property rights

66. The inefficiency of irrigation efficiency investment as environmental flow sourcing policy

68. Salinity externality

69. The Lower Murray Salinity Issue Lag time ~ 100 years Growing, time delayed, saline groundwater flow into river

70. Salinity loading and concentration effects of climate change

71. Fixing the salinity problem engineering - “salt interception” What is salt interception?

73. Salt interception Economics Solution for lower bound 2050 salinity growth prediction (67EC) =$129 x 10 6 ($175 x 10 6 ) Solution for upper bound 2050 salinity growth prediction (157EC) =$381 x 10 6 ($527 x 10 6 )

74. Salt interception economics Conclusions – steeply increasing cost of marginal salinity offset Lower bound 2050 salinity estimate Upper bound 2050 salinity estimate Conclusions – cost could exceed benefits of additional investment for plausible salinity growth

75. “ The country that takes top prize in water management is Australia” The next prize depends upon industry & community willingness to support pursuit of robust permanent solutions

77. Thank you Better Basin Futures, Water Policy Options Analysis Stream Dr Jeffery Connor Environmental Economist and Stream Leader Phone: +61 8 8303 8784 Email: jeff.connor@csiro.au Web: www.csiro.com.au/science/WaterPolicyOptions.html Contact Us Phone: 1300 363 400 or +61 3 9545 2176 Email: Enquiries@csiro.au Web: www.csiro.au