Help us publish More Than Luck: Ideas Australia needs now

In the lead up to the 2010 election, CPD gathered together 25 Australian thinkers to come up with policy ideas to fill the void left by populist electioneering. We decided to fight the politics of fear with positive visions of the future, instead of more doom and gloom.

First came this website – a place where we could set our own agenda rather than respond to the point scoring that was all too common in this year’s media coverage. It became a place where the CPD community could dream big, think long term and imagine the kind of Australia that we’d like to live in. And now we are publishing the results in CPD’s first-ever hard copy book.

But we cannot make this happen without resources. We’re turning to you to make this possible. DONATE NOW!

If you’re anything like us, you’re frustrated by what passes for policy debate in Australia. In a country accustomed to getting by on luck, and in spite of its leadership, the ideas in More Than Luck are urgently needed.

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AUTHORS(S): admin3

Lee Godden & Ray Ison

Water is a perennial public policy issue in the sunburnt country. Australia has at last retreated from ‘making the desert bloom’ as a basic policy position. ¹

Remnants of that dream remain, however, in a ‘supply-side’ approach that favours technological and engineering fixes to water supply and irrigation, and in water policy debates that focus more on the country than the city.²

So far, political choices about water have been largely framed as the need to resolve water supply crises, to confront the over allocation of water, and to ensure sufficient water for food production and regional enterprises.³ Only recently has the political pendulum begun to swing in favour of environmental flows and the sustainability of aquatic ecosystems, rather than prioritising the consumption of water by people and industry.⁴ Much money and a great deal of effort has been spent to achieve water policy objectives in the face of pressing concerns such as climate change, but effective on-the-ground implementation still seems a long way off.⁵

Australians are rightly concerned about past and current water policies. These concerns are pressing and highlight the need for a new approach to water. Australia’s population is overwhelmingly urban, but dependent on rural food and water production. Issues such as water sensitive cities, water re-use, groundwater depletion, water use in the resources sector, water quality and water/energy interactions are starting to receive more attention. Unfortunately it seems that these emerging water issues are mistakenly regarded as problems that can be solved simply through the application of scientific and technical expertise.

Although past use of science and technology has served the Australian state well and has been an impetus for past growth and development, more of the same is no longer good enough.⁶ Despite recent calls for adaptive and systemic models of water governance,⁷ policies and practices based on dynamic ecosystem models that integrate the social and physical features as well as institutional arrangements and community values have been given less weight in policy implementation.⁸ This omission is critical. Water reform will never be effective without the capability to act on the comprehension that rivers are systemic in nature, and that urban water is subject to cyclic and systemic processes. This is more than just a policy or implementation gap. It reveals a deeper problem of ‘knowing’ about water and its social purpose within the Australian national psyche.

Mythbuster: Australia knows how to do water management and has the right policy mix.

The systemic failure of water governance of the Murray Darling Basin and the rapid turn to technological fixes, such as desalination plants, in Australia’s main cities (Barnett and O’Neill describe this as ‘maladaptive practices’),⁹ is evidence that we still have much to learn about developing policies and practices for managing water sustainably.

Water managing, as opposed to the more deterministic water management, provides an alternative platform for considering long term ecologically sustainable water governance.

The story so far – water law and policy reform

The National Water Initiative, building upon earlier Council of Australian Governments initiatives, aims to reorient water policy and to drive water efficiency reforms by developing guidelines and principles for national water management. Under the National Water Initiative, governments have made commitments to:¹⁰

• Prepare water plans with provision for the environment
• Deal with over-allocated or stressed water systems
• Introduce registers of water rights and standards for water accounting
• Expand the trade in water
• Improve pricing for water storage and delivery
• Meet and manage urban water demands

The National Water Commission (NWC) is charged with leading reform. In a 2009 report, the NWC found that despite 26 years of attention to water policy and law reform, results to date have been less than encouraging.¹¹ Substantial amounts of funding are involved.¹² The Commonwealth government has driven water law reform through financial incentives and more recently intervened to prevent ‘market failures’ involved in systemic ecosystem collapse in the Murray-Darling Basin.¹³

Given the expenditure of public funds we need to evaluate water policy implementation with one eye on the prevailing economic efficiency discourse.¹⁴ But a more fine-grained policy response is also needed to understand the nature of water managing. ¹⁵ Further, while financial implications are important, social values must be considered,¹⁶ as must the hitherto poor relationship between policy formulation and policy implementation. It is useful to think in terms of policy praxis i.e. practical action that is informed by theory and that has a focus on effective water, river or catchment managing¹⁷ rather than the linear concept that policies are simply formulated then implemented.

The water policy ‘problem’ is usually ascribed to the physical lack of water supply rather than the institutional, organisational and community practices that manage water.¹⁸ Water policy is a classic example of a wicked problem (see the definition of wicked problems in the ‘Governance that works’ chapter) or a complex adaptive system.¹⁹ Because water policy is rarely framed in this way, the approaches that work when dealing with wicked problems are rarely used. There is a continual need to deepen and assess the work begun by the national reform process to engage water-related systemic practices and values. All too often in the past citizens have only become aware of the systemic nature of water in the face of breakdown or crisis, as is the case with water restrictions.

Water governance

The extent of the complex institutional framework around water is rarely appreciated. There are a wide range of institutions, rules, plans, agreements and laws with overlapping roles governing allocations, entitlements, environmental flows and rights. Add to this the hierarchical structure of local, state and federal responsibilities and laws, and it is no wonder that the complexity of water governance can become overwhelming and engagement with it is confined to relatively few ‘experts’.

On the other hand, substantial public investments occur not only in the direct provision of water supply and services, infrastructure and instrumentalities, but in the institutional and governance arrangements that manage water in the Australian community and environment.²⁰ Effective water governance is now acknowledged as essential to achieving national water policy objectives.²¹ The difficulties in achieving agreement on water governance are long-standing. More problematically, just what constitutes effective water governance remains an open question.

Australia needs to adopt a dynamic and systemic water managing approach that can co-evolve alongside the formalised reform agenda embodied in new laws such as the Commonwealth Water Act 2007. Such arrangements can best accommodate the systemic characteristics of water,²² and its contributions to countless processes, from functioning ecosystems to its aesthetic values as a reminder of water as a medium for childhood play.²³

The following key challenges are based on ten principles for sustainable water managing and include suggestions for policy implementation to support the ongoing national water reform process.

Challenge #1: Privilege strong ecological sustainability for water

Current water management across Australia is unsustainable. Sustainability though is a slippery term that can justify a wide spectrum of policy responses.²⁴ Hussey and Dovers describe the National Water Initiative as an ambitious attempt to operationalise the modern idea of sustainability in the context of water management. However they see many implementation difficulties. Assumptions about implementation are only now being unsettled by the recognition of significant deficits of capacity and knowledge.²⁵ A particularly vivid example is the continuing failure of the Murray-Darling to run to the sea despite recent high rainfall events at the top of the catchment. This failure means that the salt-flushing function of the river system as a whole is not working. This will exacerbate problems of salinity throughout the river system.

The use of ecologically sustainable development (ESD) in current policy and legal frameworks will accord higher priority to ecological integrity in water.²⁶ But even the ESD formula remains problematic as it invokes concepts of ‘balance’ rather than absolute protection. Inevitably ‘balance’ in political decision-making becomes code for giving priority to short-term considerations. Australia’s ESD commitments are built on a triple bottom line conception of trade-offs between economic, social and environmental considerations. This framing is inadequate for managing the complex dynamic between people and the water environment. The standard must be raised in order to prioritise long-term ecological viability.

Implementation Challenge #1

To move from ecological sustainable development as the policy goal for managing water to achieving ecological integrity for fresh-water ecosystems across Australia.

Challenge #2: Develop capability for adaptive water managing and social learning

If strong sustainability practices are to drive water reform then there is a need for an adaptive and systemic approach to be embedded across the spectrum of decision making for water. This suggestion is not new, but like sustainability the principle requires reinvigoration and more pervasive implementation. Much has been said about adaptive managing but rarely has it been effectively implemented.²⁷ Where it has been successful (e.g. in the managing of Kruger National Park) then adaptive managing is a necessary but not sufficient ingredient as it needs to be situated within adaptive planning and designing. In turn these need to be situated within adaptive governance, (or ‘governing’). One way is to complement the main policy tools of regulation, education, information provision and markets, with ‘social learning’ as a systemic and adaptive governance mechanism.²⁸ Ison draws on long experience of systems research in catchment management situations in Europe.²⁹ He suggests that systems-based social learning research provides a framework capable of dealing with a challenge of such magnitude as achieving sustainable water governance.

Social learning can be understood through the metaphor of an orchestra. An orchestra is something to invest in or to pay for but it is also a social dynamic, a set of people with different backgrounds and instruments coming together to create a performance that is satisfying to someone. Social learning when applied to water governing can be understood as:³⁰

• The convergence of goals (i.e. agreement about purpose), criteria and knowledge leading to the awareness of mutual expectations and the building of relational capital amongst stakeholders (a dynamic form of capital that integrates the other forms, i.e. artificial, natural, social and human);
• The process of co-creation of knowledge, which provides insight into the means required to transform a situation; and
• The change of behaviours and actions resulting from understanding something through action (‘knowing’).

Thus, social learning is a critical part of the process of transforming a situation.

Social learning can be invested in as a means to achieve more adaptive planning and managing.

Implementation Challenge #2

To institute adaptive and systemic water managing as the key framing for institutional organisation. In concert, to create institutional arrangements that enable the co-evolution of water practices across government, industry and the community.

Challenge #3: Shift water planning to a dynamic and systemic not stationary process

The NWI has sought to refashion water management by introducing strategic water planning, particularly in the Murray-Darling Basin. Environmental water allocations, an emphasis on basin-wide water planning, and statutory responsibilities for environmental water management have been key initiatives.³¹ These reforms rely on effective institutional deployment and the adoption of different points of decision making. For example, moves to adjust water allocation entitlements must operate across time and institutional scales to allow sufficient flexibility.³²

Much water planning and assessment remains based on the view that ‘natural systems fluctuate within an unchanging envelope of variability.’³³ By contrast, authors in the leading Science journal have argued that while both scientists and decision-makers have accepted the impacts of human disturbances and climate variations on the water cycle,³⁴ Historically these effects have been assumed to ‘be sufficiently small to allow stationarity-based design.’³⁵ In other words, it is assumed that the predictions underpinning design are relatively static and that structures and processes can be engineered to these specifications. Such assumptions require reconsideration.

Stationarity is no longer adequate for ongoing water resource assessments (e.g. water flows designated for given ‘environmental assets’) and the setting of levels of resource use through ‘caps’ and similar instruments. Water planning and its underpinning assumptions must embrace dynamic and systemic approaches to incorporate non-linear change and high levels of uncertainty. In a climate change world, a water plan such as that being developed by the MDBA, if it is to be effective, has to be capable of change and refinement in the face or surprise, breakdown, and real-time learning.³⁶ A plan as blueprint is no longer adequate. Water managing has to become capable of improvisation. At the moment Australia does not have the institutional arrangements to act deliberatively in real time to manage water holistically over the long term.

Implementation Challenge #3

To adopt adaptive and systemic constructs for water planning and to institute a precautionary model of decision making to accommodate high degrees of uncertainty in future climates.

Challenge #4: It is not always possible to ‘get more from less’

We need to resist a technological fix that promises ‘more from less’ in the face of highly variable and uncertain climatic conditions. In cities, decentralised initiatives around water-sensitive urban design³⁷ include innovative uses of storm water and recycled water. However, to date these changes have been a low priority in the national reform agenda, something in need of rapid change. Such adaptive, localised responses compete against major water infrastructure projects such as desalination plants which were adopted as a reaction to ‘step change’ predictions of decreased water availability. Further, the water industry still wields enormous economic power, especially when aligned with infrastructure development, and consequently it is a major player in setting the technological parameters for water management. Rather than ‘crisis’ reactions which reveal the entrenched path dependency of water management, there is a need to employ a full range of governance tools for meeting the challenges of water supply variability, including demand-side options.

Implementation Challenge #4

To give renewed attention to demand-side water managing to break with path dependency that emphasises technologically-dominated supply-side solutions.

Challenge #5: Integrated decision-making for water

If water managing is to adopt a broader range of regulatory tools, it is vital that decision-making does not become disjointed. One result of the adoption of market-based regimes has been a dilution of institutional responsibilities and a growing role for the non-government sector in water. In a supposedly de-regulated water space there has been a growing spread of organisational responsibilities for the regulation of water including, for instance, water price-setting by Commissions set up to combat anti-competitive practices. Given these changing power dynamics and the flatter organisational structures, it is critical to ensure ‘joined up’ decision-making about water. This should include consideration of the financial implications of water project development. This situation was highlighted by the Victorian Auditor-General when assessing water projects in that state.³⁸ More generally, integrated decision-making and water managing must reflect the inter-connectivity of the water cycle,³⁹ so that groundwater and overland flow are not seen as the solution to surface water shortages. Initial evaluations of the national water reform agenda have been broadly supportive of its coverage, intent and attempt to integrate ecological, economic and social imperatives, yet cautious about the institutional capacity to implement the reforms.⁴⁰

Implementation Challenge #5

To institute an integrated approach to decision-making in water that reflects the holistic and systemic properties of water as well as the interlinking social, economic and cultural systems that interact with water.

Challenge #6: Resolve the fiefdom approach to water governance

Despite many years of promoting integrated water management, there remain disparate regimes for governing water.⁴¹ These are separated across jurisdictions, geo-spatial and biodiverse regions, and across time periods. Water ‘institutions’ range from local government authorities to specialised agencies, such as catchment management authorities (CMAs), and complex intergovernmental arrangements.⁴² The difficulties that such administrative and institutional ‘fiefdoms’ create are well known, and helped create the impetus for reforms at a federal level giving rise to the Murray-Darling Basin Authority.

Matching organisational arrangements to ‘natural systems’, such as catchments, can provide some rationalisation to the artificial institutional and jurisdictional structures for water management. It is doubtful that a full-scale bioregional approach would be adopted. At a more modest scale, the advent of CMAs as the basis for natural resource policy implementation is a welcome development.⁴³ But current trends see decentralised CMAs losing funding in favour of traditional hierarchical governmental funding structures with a resulting increase in the centralisation of decision-making.

Emerging conflicts surrounding water ‘ownership’ and control in urban storm water contexts is another example where institutional and government boundaries create conflict and uncertainty. The demarcation of effective administrative responsibilities across local and state government boundaries, and their intersection with water authority and private interests represents another wicked policy problem requiring effective governance.⁴⁴ This type of institutional complexity can constrain social transformation by splintering the development of meaningful stake-holding. The complexity can produce unintended consequences including policy conflict, the inability to translate policies into local action, and the breakdown or loss of social and relational capital.⁴⁵

Implementation Challenge #6

To resolve longstanding tensions and overlaps in organisations which have responsibilities for water through systemic institutional innovation so as to allow for more effective coordination and engagement in water managing.

Challenge #7: Enacting water governance in the public interest

In 2009, the High Court of Australia confirmed that water is a common resource to be managed in the public interest Water policy and law reform over the past decades has sought to redefine what constitutes that public interest.⁴⁶ A majority of the High Court found that the move to share-based entitlements for the groundwater licences was justifiable as part of the state’s responsibility to institute sustainable water use in the public interest.⁴⁷

This decision is significant as an endorsement of the public interest objectives of the national water reform process which includes the adoption of water planning and the goals of sustainable water allocation and use.⁴⁸

Implementation Challenge #7

To continue to develop and implement adaptive water planning rules and objectives governing water as a shared common resource, reflecting changing understandings of the public interest in water managing.

Challenge #8:  Water in the market: what it can and cannot achieve

Continued redefinition of the public interest in water is part of a larger ongoing transformation emerging from over two decades of policy changes. These changes incorporate not only ‘water trading and water markets’ but also standard-setting and pricing around market measures. Under this de-regulation model, the government steers and coordinates water governance at a variety of levels using a combination of rules and incentives. The new regulatory system is based on a move to ‘purposive self regulation’ designed to change behavioural and institutional patterns associated with water use by ‘moving it to highest and best value use’. However, this reorganisation has not displaced many entrenched institutional and private sector practices that distort market attempts to optimise value.⁴⁹

Where change has been most successful, the emphasis has been to ensure that market competitiveness, water consumer interests, and economic and financial accountability are given traction within water law and policy reform.⁵⁰ Market–based mechanisms have contributed to reshaping water governance, in terms of structural adjustments, and in meeting the variability of water supply in defined contexts. Nonetheless, it is important to recognise that market instruments, such as cap and trade policies, have limitations when dealing with ‘public goods’ in the nature of common pool resources like water.⁵¹ Thus, there remains a strong role for governments to set meaningful parameters within which market measures will operate, such as defining realistic and meaningful sustainable diversion limits for water trading. More generally, governments and tax payers will retain responsibility – and pick up the tab – for externalities such as environmental degradation and market failures like the imminent ecological collapse at the mouth of the Murray River.

Implementation Challenge #8

To develop a fine-grained regulatory framework for water managing that acknowledges the contribution of water-related market measures but which recognises the limitations of reliance upon any one regulatory tool.

Challenge #9: Build civic engagement in water governance

Social practices around water pervade everyday life as well as the formalised relationships between governments,  water ‘consumers’, water authorities, water markets, water regulators and the other myriad of institutions and organisations that manage water. There are many congruent and overlapping responsibilities. The focus on top-down institutional arrangements must be complemented by a focus on the collaborative community-oriented management of water, which shapes how water is understood and valued within Australia. While recent water reform has emphasised community involvement⁵² there has not been a corresponding commitment to detailed planning of the philosophy, role, responsibilities and the process to support effective involvement over time.

Generally, community interests in this model of natural resource management are treated as the subjects of consultation, while the core decision-making remains within the traditional water authority structures.⁵³ Overarching decision-making power remains within the political hierarchy of water ministries. Stakeholders in water catchments face unprecedented institutional change at the same time as being confronted with rapid and potentially catastrophic natural events. There is an urgent need to broaden the constituency of civic engagement with water in a more meaningful manner.

Implementation Challenge #9

To build citizens’ trust in water institutions and to explore governance arrangements that will achieve outcomes in an equitable, effective way, balancing bottom-up and top-down processes.

Challenge #10: Effective integration of social learning about water values

To understand water in its ecological context will require breaking with the view of water as a ‘quantity’ of a resource, towards an appreciation of water as an integral process within landscapes and lives. Reassertion of the technological fix approach under climate change conditions simply re-contextualises an older discourse without adding significantly to an expanded cultural ‘knowing’ about water. For example, the functioning of rivers and their long term sustainability and existence as socio-cultural features in the landscape has a cultural existence in the Australian nation. How people imagine river futures contributes greatly to our humanity, as well as having a physical and utilitarian function. Water reform must be framed around cultural values as part of building social consensus in order to generate social learning for concerted action to make water usage sustainable.

Implementation Challenge #10

To encourage social learning as an approach to water policy reform in order to generate new practices as a result of understanding water as a cultural phenomenon.

Endnotes

AUTHORS(S): admin3