Confusion over water trading

Tucked away at the bottom of this article about Australia taking up nuclear power is this bizarre statement about water trading which kind of demonstrates why people should think carefully before commenting outside their area of expertise.

Water and irrigation experts remain unsure about whether any of the measures decided on at Tuesday’s meeting of state and Commonwealth leaders would free extra water.

Peter Schwerdtfeger, emeritus professor of meteorology at Flinders University’s Airborne Research Centre, said he agreed that overallocation of water needed to be stopped, but with “precious little else” that the meeting decided on.

“Water trading as it stands now is an evil nonsense. It has allowed the fallacious belief to develop that water can be sold either upstream or downstream without any consequences.

“Water that is sold to NSW will not flow downstream and the bed of the Murray may dry out. It is not environmentally or economically viable.

“Water trading only works if you have a surplus of water … why don’t we encourage people to use water more efficiently?”

It could be that Prof. Schwerdtfeger has been taken out of context or misquoted, but it seems more likely that he doesn’t understand the basic point that trade, by putting a market price on water it implicitly results in it being put to the most more efficient uses.

I don’t think that anyone is under the illusion that water is a commodity that can be traded “without any consequences”. Environmental flows must be maintained, losses when trades occur over long distances and such are all issues, but hardly irreconcilable ones. Most importantly is trading is more important when there is scarcity, its barely necessary if you have surplus. Prof. Schwerdtfeger may be an expert in climatology, but when he’s talking about trading, I don’t think he has a clue.

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4 Responses to Confusion over water trading

  1. Steve says:

    A friend has pointed out that the comment about “surplus” may refer to the fact that evaporative losses are proportionally much greater at low levels of flow. Thus to effectively transfer the water down stream you need a surplus of water in the river system. This is no doubt true, but I’m not convinced in what is said in this statement.

    As I have said his comments are perhaps out of context, and it would be good to know the reasons why he thinks water trading is an “evil nonsense”. MNost trading from what I have read occurs within districts, with only limited amounts over long distances.

  2. Crowlie says:

    Gidday Steve,

    Have you read “Growth fetish” by Clive Hamilton? Great book.

    Cheers, Lis

  3. Peter Schwerdtfeger says:

    It’s all very well for “Steve” to publish his comments about my expressed opinions on this site, BUT he would be rather more convincing if he were to fully identify himself in his own rather derogatory statement about me. At least I have the decency and integrity to identify myself fully when I make public statements on matters in which I have been actively and responsibly interested, in this case for almost 40 years.

  4. Steve says:

    Hi Peter,

    Its taken a long time for you to get here. Who I am is really irrelevant, proof by authority is rather medieval.

    Now as I said you may have been quoted out of context, but if you have a surplus of resources why would you need trading? It really does make you sound like you don’t have a clue what this is about to make a statement like that.

    The point of trading is to allocate scarce resources more efficiently. Trading won’t avert the drying of the Murray, restricting usage to sustainable amount given the local conditions will.

    The point of trading is to make this more efficient by eliminating low value/innefficient usage first. People will use water more efficiently if it costs them more. Trading lets those who can’t be more efficient trade their rights away to those who can. Why this is an “evil nonsense”?

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