The Govt at last is taking steps to better manage NZ’s fresh water, focusing on quality, quantity, allocation and infrastructure (including water storage). We have plenty of the stuff - it’s the key to our competitive advantage in agriculture and renewable energy and is essential to our environment and lifestyle. But in some parts of the country demand outstrips supply, inhibiting economic development. The newly announced Land and Water Forum involving major water users (agriculture, industry, power generation) and major environmental and recreational groups is charged with finding a better way of handling the resource, while water infrastructure is an important part of the work of the National Infrastructure Advisory Board.

Worthy But Dull. Economists couldn’t excite much interest when they tried to promote water management as a policy issue a decade or so ago. Work was started on improving the quality of the water (bringing dairy industry effluent disposal practices into question). Trying to include water among infrastructural issues, along with transport and communications, has not been so easy, although the Business Council for Sustainable Development produced a sophisticated report last year (based on two years of research). It said water in most major NZ catchments would be fully allocated in four years; a “gold rush” for water was already under way; and no water meant no new business, causing significant economic loss. It also found 20 - 80% of water allocated for commercial use (including municipal water supplies) in some waterways is not being used at any point in time.

Price The Key. Allocation can’t be improved without putting a price on water and introducing tradeable quotas, to facilitate the transfer of water from one commercial user to another and encourage more efficient use. Only when a value is placed on water will greater effort be made to store it, rather than persist with tapping into aquifers which are becoming stressed. But there are political snags. First, the commercialisation of water raises the hoary issue of privatisation. Economist Brian Easton says the challenge is determining at what point on the pipeline between rainfall and your adding water to your scotch has it moved from public to private ownership. Second, there’s the question of Maori entitlements under the Treaty of Waitangi. One idea is to grant “grandfather rights” where water is now allocated, but give Maori a 20% share when new allocations are made. But for now, the big deal is water is on the policy agenda.

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