Western Australia to begin water licence trading scheme

The scheme has been devised by the Water and Rivers Commission of Western Australia in anticipation of a doubling in demand for water over the next 20 years to ensure that important natural water dependent systems are protected in the long term. The programme will mean that in areas where water is scarce, water is allocated to environmental needs first, and then both domestic and commercial customers will be able to use, sell or lease their water licence entitlement. However, the commission will not be setting a price for the water licences, instead allowing it to be dictated by market forces.

For example, if a farmer has a water entitlement to irrigate pasture, and he decides to invest in a more efficient irrigation system, the water that he saves becomes an asset that he can sell or lease to a prospective water user tapping into the same water source. In this way, the scheme is expected to encourage customers to concentrate harder on conserving water. It also means that the local economy will benefit due to the new businesses that are allowed to develop because extra water has been freed up.

“Sharing water is Western Australia is a difficult balancing act and it’s only going to get more complicated,” said Chief Executive of the Water and Rivers Commission Roger Payne. “But if we get it right first time it means we can offer some certainty for the State’s future sustainable development.”

The full article is published in the July/August edition of World Water magazine.