Water allocation systems: exploring opportunities for reform
Waterlines report No 65 - November 2011
Water allocation systems are the policies and rules used to determine and distribute water available for use amongst water entitlement holders. Allocation systems with carryover allow part of an unused allocation to be ‘carried over’ so that it is available for use in the following water year. This is often seen to be a useful tool to enable water users to manage their water more flexibly and enable more efficient water use and production decisions.
This project was developed in response to findings in the 2009 Biennial Assessment, and reports prepared by the Productivity Commission and Australian Competition and Consumer Commission recommending the use of water allocation systems with carryover arrangements to increase water holders’ access to water across seasons.
Demand for more flexible access to water allocations is growing due to increased variability of water supply. Carryover and similar allocation tools are currently available in only some catchments, and only to some types of water entitlements. Reform to allocation systems to make carryover or similar arrangements more widely available, has the potential to increase the resilience of water-dependent industries in the face of increased climate variability.
The implementation of provisions for carryover varies within and between jurisdictions, and it is unclear whether current approaches are sufficient to manage increasing demand.
This report reviews water allocation systems across Australia and analyses the extent to which, through carryover and similar tools, different water allocation systems currently contribute, or could contribute, to optimising water use. The report also provides an analysis of the practical constraints and opportunities for improving existing arrangements, for water allocation including the presentation of an assessment framework to guide water allocation system reforms.