Sustainable water management in a green economy: Building resilience to climate impacts and social change

Transcription

1 Sustainable water management in a green economy: Building resilience to climate impacts and social change Brian Spies FTSE LGSA Water Management Conference, Wagga Wagga, July

2 Challenges for Australia Unpredictable climate and rainfall patterns Declining national productivity Competition for land and water Environmental degradation Growing / aging population and changing demographics Maintaining prosperity and quality of life Short election cycle challenges strategic policies and long-term thinking 2

3 Key messages Green Growth Improvements in economic productivity cannot come at the expense of natural resources, the environment or social wellbeing Recognise the interdependencies between water and energy in the natural and human environments New technologies and robust science can help deliver greater efficiencies and triple-bottom line outcomes 3

4 National Water Initiative Principles supporting Green Growth - Water plans with provision for the environment - Deal with over-allocated and stressed water systems - Full cost recovery in water pricing - Efficient water market so water goes to highest value use - Nationally compatible regulation and planning Recognise need for government to manage issues of urban and rural equity Environment Economic Social Governance Source: NWC 4

5 Water consumption Water consumption is driven by population growth & agriculture Water supply strongly dependent on climate Source: ABS, 2010a 5

6 Water cost ($/kl) Reservoirs $ $1.30 Seawater desalination $ $2.20 ( to $7.00+) Recycling $ $6.00 Rainwater tanks $ $12.00 Bottled water $500 $3,000 Water savings from AAA shower roses $0.77 Water savings from AAA dishwashers $33.40 Regional NSW $1.50 (median) Upgrades to irrigation infrastructure: $ $11.00 Traded rural water allocations: $ $1.00 Traded rural water access entitlements: $ $2.10 Average entitlements purchase by Commonwealth for e-flows: $1.80 6

7 30% of NSW population 4% of water consumption in Murray-Darling Basin Regional NSW Heavily impacted by climate - no access to seawater desalination 60% of local utilities have commenced Integrated Water Cycle Management programs Source: ABS, 2010a Photo: Stuart McEvoy,The Australian

8 Climate is variable Dry 2006 Wet 2010 Source: BoM 8

9 Responses to Climate Mitigation Reduce greenhouse gas emissions - Increase energy efficiency - Renewable energy - Micro-generation - Land use change / sequestration Adaptation Manage impacts - Increase storage capacity; Recycle - Reduce demand (pricing & incentives) - Water trading - Integrated water management; Green cities - Water-efficient agriculture - Protect environmental flows Source: IPCC, NWC 2012; CSIRO

10 Urban consumption Demand reduction in Southeast Queensland BUT water restrictions impose economic cost! Source: QWC,

11 Murray-Darling Basin A macrocosm of competing demands - Economic (water for irrigation) - Environmental (e-flows and ecosystems) - Social (community cohesion, jobs) - Governance (legislation and water rights) 11

12 Inflows into Murray-Darling Basin Source: Chiew and Prosser,

13 Irrigation Less than 1% of agricultural land is irrigated Produces 30% of agricultural value: - Vegetables, fruit & nuts, dairy, Challenges - drought - flood - over-allocation of water rights - cross-subsidies 13

14 Irrigation Commonwealth Programs Restoring the Balance in the Murray-Darling Basin ($3 billion +) Sustainable Rural Water Use and Infrastructure Program ($5.8 billion) Economists Subsidise irrigators at expense of others Water savings from upgrades expensive Environmentalists Not enough to restore and maintain ecosystems Water buybacks more cost effective Irrigators/communities It s our water What does Canberra know? Politicians Playing to galleries voters have interests Source: NWC, MDBA 14

15 Murrumbidgee irrigation Source: The Land 12/7/10 15

16 Murrumbidgee irrigation 11 GL/year extracted 2 GL used for irrigation Replace open channels with 380 km of main pipelines & 2 pumps; on-farm works include 1650 km pipelines NPV: $72m (capital and operating); $6.4m/year $0.72/kL for water saved environmental benefits (reduced salinity, waterlogging) social benefits (regional value, on-farm efficiency) (Benefit/cost= 1.3) 300,000 ha 2.1 GL/a 16

17 Interdependencies 17

18 Relationships between Water, Energy and Climate Change in the Urban Water Sector

19 Megajoules / capita / year Energy Use in Urban Water Systems (before any desalination) 1,400 1,200 1,000 Other uses Sewage pumping Sewage treatment Water supply pumping Water supply treatment Sydney Melbourne Perth Brisbane Gold Coast Adelaide Auckland Source: Kenway et al. (2008)

20 Diversification Portfolio of sources Desalination Water transfers Groundwater Recycling treated water (non-potable) Harvesting stormwater (non-potable) Source: ABS 2011a,d Rainwater tanks Greywater use 20

21 Recycled water for drinking? Perth - The Water Corporation is trialling groundwater replenishment at the Beenyup Advanced Water Recycling Plant at Craigie for potential potable use. An Interpretive Centre has been provided to encourage public awareness and acceptance, currently 70%. Beenyup Wastewater Treatment Plant 21

22 Energy Water linkages 22

23 Water for Electricity Production Water is needed to produce electricity - Coal and gas: cooling steam turbines (also geothermal, solar-thermal, hydro) Power station output downgraded during drought Dry cooling possible, but energy penalty (and water provided for free) Source: ABS 2011a 23

24 Energy for Desalination Source: Hoang et al.,

25 Energy/volume (MWh/ML) 12 Energy for Pumping pipe diameter = 0.3m (flow rate = 9 ML/day) 0.5m (25 ML/day) Local transfers to small cities 0.7m (50 ML/day) 0.9m (82 ML/day) 1.1m (120 ML/day) 1.3m (170 ML/day) 1.5m (230 ML/day) 2.0m (410 ML/day) 2 0 BHP: 320km, 200 ML/day, 1.5m dia Victoria North-South, 70km, 200ML/day Distance (km) 25

26 Equivalent Energy Consumption for Desalination and Pumping Water Pipe length (km) Energy costs only Total costs Capital costs only Flow rate (ML/d) Energy use for MWh/ML desal (Sydney, Adelaide) is equivalent to pumping 1140 km Total (capital + energy) costs are equal for 300 ML/day desalination and 340 km pipeline 26

27 Water Supply Options for Adelaide A modelling approach 27

28 Adelaide Diversified supply 1. Mt Lofty Ranges (catchments) 2. River Murray 3. Seawater desalination Desalination Plant 4. Reclaimed stormwater and wastewater Reservoirs River Murray Source: Water for Good Inflows

29 Water Source Water supply options Operating Cost ($/kl) Energy (MWh/ML) GHG Emissions (tonnes/ml) Mt Lofty catchments River Murray Desalination Stormwater harvesting Wastewater reuse

30 Water Sources Catchments, River Murray & Desalination Catchments & River Murray Catchments & Desalination Catchments, River Murray and Stormwater Model results (50 year projection) Operating Cost ($/kl) Energy (MWh/ML) GHG Emissions (tonnes/ml) Reliability (%)

31 Adelaide without desalination? Desalination is the most expensive option ($1.00/kL) Mt Lofty Ranges is the cheapest option ($0.20/kL) Adelaide is unique can source water from River Murray (Water purchase + pumping costs: $0.44/kL - $0.60/kL) Therefore, optimal is Mt Lofty + River Murray (+ stormwater / recycled wastewater) 31

32 Sustainability strategies in the urban water sector Australian water utilities well advanced -Sydney Water: Ecologically sustainable development (ESD) policy with annual scorecard -Melbourne Water: Sustainability strategy encompass social, economic and environmental objectives -Water Corporation (WA): sustainability principles encompass social, economic and environmental objectives -SA Water Corporation: Sustainability Report - Source: ABS 2011a 32

33 Externalities Green Growth principles would ideally bring as many externalities as possible in water pricing so that market signals would optimise triple-bottom line outcomes An external party that is not captured in the costing and pricing of a goods or service Alternately, assess and balance environmental and social factors separately to financial considerations Source: NWC,Cadogen-Cowper, Hardisty, WGCS 33

34 Example Water Corp Source: Water Corp 2011a Social environmental economic Governance ethical stakeholder 34

35 PV (AUD $m, 2008) EcoNomics Options Analysis Sustainability analysis Water Corp Busselton WWTP - Base Case $120 $100 $80 $60 $40 $20 $0 Costs Benefits Costs Benefits Costs Benefits Costs Benefits Costs Benefits Costs Benefits F Pond T'mnt + Stream Q Adv. Sec. T'mnt + Stream Q F Pond T'mnt + Evap. Pond Financial Option F Pond T'mnt + Dam + DWQ T'mnt + Stream Onsell Q Externalities DWQ T'mnt + Dam + Onsell Full analysis: financial, social and environmental costs and benefits 35

36 National accounts Economic accounts GDP Income & expenditure Balance sheet Employment Industry sectors Environmental accounts Water (2010) Energy (2011) Land (2011) Environmental protection expenditure (2012) Waste (2012) Environmental goods and services (2013) Society / economy Environmental - economic accounts Biophysical / environmental Source: ABS 2011b 36

37 Productivity Commission Productivity - Bans on urban rural water trade, in place in several jurisdictions, may have been the most inefficient option - Drought conditions prompted governments in most States to impose restrictions on the use of water, which detracted from the output of businesses without commensurate reductions in factor inputs such as labour and capital - The external social and economic costs of water restrictions are born by the broader community - Productivity decline is attributed to substantial institutional and regulatory constraints and poor policy decisions Source: PC 2011a 37

38 Green growth or Economic efficiency? Economic efficiency encapsulates many objectives that should be pursued in the urban water sector, including those related to water security, water quality, flood mitigation and the environment. It allows short-term and long-term environmental and social considerations to be integrated into policymaking, as required by the principles of ecologically sustainable development. As such, it can also be used to guide the assessment of public health and environmental policies based on rigorous cost benefit analysis. Productivity Commission,

39 1. Green growth (i) (ii) Recommendations National protocol for green growth across all governments Integrate national economic and environmental accounts 2. Investment decisions (i) Balance social, economic and environmental analysis, informed by the best available science and implemented through transparent and contestable processes (ii) Price externalities (GHG emissions, land degradation, water pollution) to provide market signals 39

40 3. Investment in technology (i) (ii) Recommendations Encourage energy-efficient and flexible water supply options (water grids, decentralised systems) that increase efficiency and productivity and reduce environmental impact Target innovation to accelerate development and uptake of technologies that lead to greater efficiency in supply and use 4. Recognise that water has multiple roles Integrate water policy across all sectors within government 40

41 5. Portfolio approach (i) (ii) Recommendations Apply portfolio approach to investment to provide resilience for anticipated increased variability in rain-fed supply arising from climate change and growing demand. Manage for high-risk, catastrophic events Consider recycled wastewater, stormwater and desalination on their economic, environmental and social merits (while maintaining primacy for the protection of human health through a multi-barrier approach to risk management) (iii) Potable recycling reduces costs; but public acceptance requires a long-term, participatory public awareness program to overcome entrenched negative community perceptions of recycled water 41

42 Recommendations 6. Economic efficiency & social impact (i) Minimise cross-subsidies and improve price signals to reflect the true cost and value of water (ii) Where subsidies are provided, their cost and rationale should be transparently communicated to stakeholders (iii) Adverse impacts of water price signals should be addressed through social policy 42

43 7. National Water Initiative 8. Support for R&D and commercialisation (i) (ii) Recommendations (i) Extend water markets to include energy and land use changes, including mining (ii) Policy barriers that inhibit rural-urban transfers and potable use of recycled water should be eliminated. Base decisions on economic, environmental and social merit Develop national R&D strategy for water Public funding for public-good research and commercialisation of emerging technologies that improve efficiency and improve environmental outcomes 43

44 Key messages Green Growth Improvements in economic productivity cannot come at the expense of natural resources, the environment or social wellbeing Recognise the interdependencies between water and energy in the natural and human environments New technologies and robust science can help deliver greater efficiencies and triple-bottom line outcomes 44

45 4-page short guide 166-page report 45