Water Trading and The Murray and Darling Rivers

Growing Blue

Australian Water Markets Improving Distribution

The Murray and Darling Rivers are the Australia’s two largest and the surrounding region, the Murray-Darling Basin, is a dry 400,000 square-foot area of Southeast Australia that receives six percent of the country’s run off.

Both the Murray and Darling Rivers are dammed to enhance power and irrigation. While this it has proven to be a critical measure for the three million people and the 40 percent of Australia’s farms who depend on the rivers’ waters, this actually reduces water flow to the sea by 75 percent. This reduced flow has caused salt to rise to the surface, and today the lower reaches of the Murray River are drying out. The impacted flow has also destroyed prime agricultural land, reduced wetlands acreage, and endangered, or in some cases eliminated, a number of native species.

In 1994, water shortages across the continent resulted in the creation of a new and evolving water market. In this market, water licenses are bought, sold and traded. Altogether, the market has a total value in the billions of dollars.

In the basin, the water trading initiative is a component of a large-scale interregional governmental entity which regulates water delivery and allows for interregional water trading, giving irrigators more flexibility. The ability to trade water has helped this dry area during droughts by allowing water to move downstream. It has also given farmers additional flexibility when it comes to making decisions about water – how to use it, how much and how often, benefiting local communities and keeping local ecosystems healthy.

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