170 彦根論叢 2015 spring / No.403
Manabu Kondo,
Australia’s Water Markets
An evaluation of Australia’s water market as a new global standard for managing water resource
SID HARTA PUBLISHERS, 2013, 750pp.
A response
Professor Kondo is to be commended for in-troducing readers to a leading international example of water reform, water markets in southern Australia. A survey of water reform world-wide reveals that a number of different strategies are being used. Despite its reputation for focussing on free enterprise and economic growth it is the legal route that tends to domi-nate in the United States, particularly in the south west, where water management regimes are often built around major court decisions or outcomes negotiated to avoid potential court action. By contrast the European Union with its Water Framework Directive puts its empha-sis on economic penalties for non-compliant nations and public participation promoted through devices such as strong reporting and auditing mechanisms. Australia has taken a dif-ferent approach and introduced large scale water markets within a complex policy frame-work that promotes goals such climate adaptation, environmental rehabilitation, sa-linity management, protection of irrigation communities and society-wide security against drought, in addition to the traditional goal of markets - profit maximisation. It is this com-plex policy mix that is the focus for Professor Kondo.
Daniel Connell
Crawford School of Public Policy Australian National University / Research Fellow
His book is based on many years researching irrigation based agriculture in south-east Aus-tralia. When he first came to Australia in the early 1990s what he would have seen along the River Murray and its tributaries on his field trips out from Canberra was a string of irriga-tion based communities originally created by state governments operating through com-mand and control administrative systems. The aim of those governments through the late nineteenth and most of the twentieth century was to promote closer settlement in the dry in-land of the continent.
However, this century old policy of expan-sion by governments building dams and handing out water licenses for free to encour-age new farmers to come to these irrigation towns was in trouble. Over the subsequent years Australian governments, companies, re-search bodies and industry groups intensely debated a wide range of issues relevant to the way in which rivers interact with their catch-ments. The results included new arrangements to take into account environmental concerns and a wider range of stakeholders. This caused intense political struggles which often involved Australian voters living a long distance away in the major coastal cities. What eventuated were a unique policy blend using markets as a key 書評
171 Manabu Kondo, Australia’s Water Markets Daniel Connell
force; unleashing energy and promoting effi-ciency to achieve a mix of goals that were the product of the sometimes very untidy political compromises. Professor Kondo’s recent sabbat-ical at the Australian National University allowed him to build on his previous research and bring an outsiders fresh and shrewd eye to the complex results of that protracted debate about the future of social and economic life in rural Australia.
This book is important because it provides a wide ranging and comprehensive survey of Australian water related markets. Social, envi-ronmental, and sustainability dimensions are recognized as significant along with profitabil-ity. Salinity trading , for example, is a particularly interesting aspect of the Australian use of water related markets that the book ex-amines at some length. (Water is the transport mechanism for salt moving through the land-scape and salinization is a strong indicator of poor water management.) Another key subject is the prerequisites that need to be in place for a water market to operate efficiently. This in-cludes the creation of tradable products, a difficult challenge given that water is not stable and does not stay in one place like land. (Most of the water that an irrigator puts on his or her crops on a given day drains back into the river or transpires and becomes rain that falls else-where, so what exactly do you own if you own a water entitlement?) A trading system needs much more than just transferable, tradeable commodities, however. The creation of sophis-ticated institutional arrangements to record and audit the water market to ensure that its activities support the diverse policy goals de-scribed earlier is also essential and this just one of many issues considered by Professor Kondo in his judicious analysis.
The book concludes with a discussion of fu-ture possibilities for water markets in Australia. One subject of particular interest is the pros-pect of extending water trading to urban centres. This is particularly relevant to large cit-ies such as Adelaide and Melbourne. (Both are linked by pipelines to the Murray-Darling Ba-sin even though they are outside the catchment borders.) Adelaide already receives an average 40% of its water from the MDB as a result of decisions made before water markets were in-troduced. If it had been allowed to increase its take to facilitate further growth through pur-chases on the water market this would have saved the billions of dollars which is now being spent on desalination. A similar calculation ap-plies to Melbourne which built an even larger desalination plant. The expenditures needed for these projects have already been made and cannot be recovered but such examples show the cost of restricting the development of water markets and that lesson should be applied to future policy debates.
A strong economic perspective on such ques-tions is essential and that is what is presented in this book. This wide ranging analysis of Aus-tralian water markets is a valuable contribution to Australian public policy but it is relevant to other countries as well. The book links the fun-damental principles of economics to a major case study and shows how government pro-grams can be beneficially informed by theory. Given the challenges ahead from threats such as climate change and economic growth this is a very timely publication and Professor Kon-do’s book provides an excellent example of applied research that is relevant to all of us working on the relationship between research and policy.
