Review of the Operation of the Cap: Ecological Sustainability of Rivers of the Murray-Darling Basin

"February 2000".

Project Number: MDBC Project R10004 Ecological Sustainability of Rivers - Cap Review M/FOLDER/203.

MDFRC item.

The Ministerial Council introduced the Cap on diversions from the Murray Darling Basin river system in June 1995, which in 1997 was confirmed as a permanent Cap. Two primary objectives for implementing the Cap were: -the need to maintain and, where appropriate, improve existing flow regimes in the waterways of the Murray-Darling Basin to protect and enhance the riverine environment; and, -to achieve sustainable consumptive use by developing and managing Basin water resources to meet ecological, commercial and social needs. With the introduction of the Cap, the Ministerial Council undertook to review its operation in the year 2000. The Ecological Sustainability of the Rivers component of the Review was undertaken by the Cooperative Research Centre for Freshwater Ecology, with input from submissions received from partner governments, the Community Advisory Committee and directly from stakeholders. The main conclusions of the Review are as follows: -Sustainability in the Murray-Darling Basin should be defined as the indefinite preservation of: - a functional and diverse ecosystem which, as well as meeting aesthetic and ethical requirements, provides a natural resource suitable for (all) human uses and production; and - a socio-economic system capable of using the natural resource productively to the maximum good of the current and future communities. -The development of the Basin's water resources, and in particular the reduced flows associated with these developments, has had a major impact on the riverine ecosystem. Impacts related to reduced flows include; - reduced areas of wetlands; - degradation of floodplain forests; - less diverse and reduced populations of native plants and animals; - exacerbation of problems of salinity, pest species, eutrophication and blue-green algal blooms; and - alteration of the shape of the Basin's rivers. -Because of water resource development, the Basin ecosystem is moving to a new and different state. This transition will require many decades to complete – with the full impacts of the current level of abstraction yet to be realised. -The Cap is set at a level of diversions that contributed to the current degradation of the riverine environment, and while the Cap is an essential step in slowing on-going decline, there should be no expectation that the Cap, at its current level, will improve the riverine environment. -However, without the Cap it is most probable that the health of the Basin's river system would be significantly poorer, as extractions approached the Full Development Scenario level. -Determining an appropriate level for the Cap requires science to identify ecological impacts of the current level of diversions and describe the long-term consequences of these impacts on sustainability. It is the role of the community, using this understanding, to strike the balance between the economic benefits and ecological costs of diversions. The level of the Cap needs to reflect this balance. However, the ecosystem itself will decide if the level of diversions is sustainable. -For the main part, the environmental benefits of the Cap, and hence its contribution to sustainability of the system, will depend on the skill with which the environment's allocation is managed. Provision of effective environmental flows are constrained by a lack of ecological knowledge, limitations of infrastructure, state boundaries, the wish to protect floodplain developments and timing and volume constraints imposed by the need to deliver water for consumptive use. -Indications of continued decline in river health suggest that current land and water management practise will require that the Cap allow significantly less extraction if the Cap alone is expected to achieve environmental sustainability. -Increasing the level of diversions in upstream rivers will further exacerbate environmental degradation downstream. These effects must be recognised when determining the level of the Cap in upstream jurisdictions. -The Cap has contributed (or will when fully implemented) to the sustainability of the river system by: - Restricting further diversions in all rivers, regardless of their current level of water resource development, thus protecting all riverine environments to the benefit of the whole Basin; - Protecting important high flow events – through limitations on access to off allocation that have been introduced to ensure Cap compliance; - Providing an incentive for more accountable water resource management, including conversion to volumetric allocations; and - In conjunction with other water reforms, provided a framework for water trading to develop. -The Cap's contribution to ecological sustainability would be enhanced by: - Reducing transmission losses across the Basin; - Returning all government funded water savings to the environment; - More efficient management of the environments allocation; - Basin-wide adoption of diversions models for evaluating compliance; - Rapid development of Computer Simulation Models to replace Demand Models for determining the Cap; - Defining the Cap so as to protect the proportion allocated to the environment from the effects of reduced catchment water yield; - Adopting the principle that all water in excess of the Cap is considered the environment's entitlement; and, - Integrating management of groundwater and surface water. -There is a need for an annual Ecological Audit of the Basin's river system. An Ecological Audit would assess the Basin-wide coordination, effectiveness and ecological outcomes of environmental flow management undertaken by the State's and the ACT. The Ecological Audit would also comment on the health of the Basin's river system by reporting the condition of a number of performance sites across the Basin. In terms of the specific questions raised in the project brief, the responses are: 1. Collate and assess relevant scientific and policy reports and submissions of the partner Governments and the CAC addressing the ecological sustainability of the river system of the Basin. A considerable body of scientific and management literature indicates that the health of the Murray-Darling Basin's river system has declined as a result of water abstraction, and that this decline is likely to continue as the full effects of past management practise occur. Scientific evidence indicates that further extractions from the river system are not ecologically sustainable, and that the existing level of extraction may not be sustainable. Much of this information is synthesised in the book, "Rivers as Ecological Systems – the Murray-Darling Basin". Relevant reports include the Stressed Rivers Assessments, Water Allocation Management Planning Reports, Scientific Panel Reports for the Murray, Barwon-Darling and the River Murray Barrages, and the NSW Wales Rivers Survey. Submissions to the Review were received from the partner governments to the Murray-Darling Basin Initiative, The Community Advisory Committee of the Murray-Darling Basin Ministerial Council (CAC), industry groups and directly from other stakeholders throughout the Basin. A number of issues relating to the ecological sustainability of the Basin's rivers emerged from the submissions including: - no consistent definition of ecological sustainability; - widespread support for a Cap to protect the ecological health of the river system; - disagreement over existing levels of environmental degradation and its causes; - difficulties in striking the balance between environmental impact and economic benefit; - insufficient scientific input into setting and evaluating the Cap; - no agreement on a sustainable level for the Cap; - greater accountability for management of environmental allocations; - the Cap alone will not ensure sustainability – other water management policies will be required; - the Cap needs to be supported by an integrated approach to catchment management; - confusion between impacts of the Cap and other water reforms; and - confusion about what the Cap is intended to achieve. 2. Address the impact of the operation of the Cap in achieving its objectives to ensure ecological sustainability of the Murray-Darling Basin river system by examining the following questions: 2.1. How Should Sustainability be defined for the purposes of the Cap? The Cap aims to make increases in production sustainable by fostering development, through more efficient use of diversions, without allowing growth in diversions. Production will only be sustained if both the ecosystem and the socio-economic system are sustained in the long-term. Recognising that sustaining the ecosystem that maintains the resource is the key component to the future of the Murray-Darling Basin, sustainability should be defined as the indefinite preservation of: - a functional and diverse ecosystem which, as well as meeting aesthetic and ethical requirements, provides a natural resource suitable for (all) human uses and production; and - a socio-economic system capable of using the natural resource productively to the maximum good of the current and future communities. In terms of its operation, the Cap must seek to apportion water between the riverine ecosystem and consumptive human uses such as to: - reserve sufficient water to maintain the ecosystem in line with ESD principles; and - preserve a supply of water suitable for human use. Leaving aside the socio-economic component, sustainability should address three fundamental ecological values: biodiversity, ecosystem function and ecosystem integrity. The appropriate spatial scale for assessing the Cap's contribution to sutainability is basin-wide and over a temporal scale of decades. The long-term decline in the Basin's natural capital (soil and water resources) indicates that we are failing the test of intergenerational equity, a fundamental tene