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October 12, 2010
In her Basin plan forced to put environment above people in The Australian Judith Sloan criticizes the plan without mentioning 'food security' or running a scare campaign on food prices and thereby condemn the Murray-Darling Basin to death by political paralysis. Her concern appears to be the overall exercise of power around water is modeled on the principles of a market economy and the reordering of society to ensure economic growth.
She says that by any measure, the guide to the Murray-Darling Basin plan represents a clear case of overshoot in which the environmental gains may be achieved, but with unnecessarily high social and economic costs. She argues thus:
By any measure, the proposed cuts to water use are extreme. But the recommendations of the MDBA [Murray Darling Basin Authority] confirm, and are derived from, the fundamental weakness of the commonwealth Water Act, a weakness that has been known by the government as well as all other interested parties for quite some time...The objects of the act talk about promoting "the use and management of the basin water resources in a way that optimises economic, social and environmental outcomes.But when it comes to the principles guiding the determination of the SDLs, the environment has primacy, with residual flows available for other uses. In other words, the trade-off framework envisaged in the objects of the act is lost when it comes to the vital task of the MDBA determining the split of water resources between the environment and consumptive uses. Calculated this way, the SDLs over-allocate water to the environment and under-allocate water to irrigators.
She adds that the hands of the Murray-Darling Basin Authority are essentially tied: the legislation does not permit consideration of issues other than environmental needs when determining the cuts. The only scope to take into account other issues, such as the impact on local communities, is how the cuts are distributed within individual catchments.
Sloan's advice is that:
The government must act quickly to amend the legislation to achieve sensible water recovery targets that will improve the environmental health of the basin as well as underpin irrigation and the prosperity of the communities. Perhaps there is a role for the independents in initiating the required amendments?
Nowhere in the op-ed does Sloan address the ecological implications of an over allocated water system and the failure to address this over the last decade or more when she claims of environmental overshoot in which the environmental gains outweigh unnecessarily high social and economic costs. How does Sloan know this to be so? What is the basis for her cost benefit analysis?
Secondly, Sloan is unclear on what she means by making the Murray-Darling Basin sustainable, what cuts in allocations are required to do this, and how she would address the cost to the regional economies of these cutbacks.
Thirdly, Sloan does not address the costs of that over-allocation to ensure economic development that is borne by the environment and diffused among communities downstream. Those costs are market negative externalities related to the environmental consequences of production and use. Sloan does not mention these consequences at all.
The fixed truth underpinning Sloan's article is that economic growth ensures the prosperity of the greatest number and that it is not the economic system that fails. Failure is attributed to individuals or to the 'rogue state'. Sloan, in other words, does not understand water in the Australian economy and little understanding of water management in Australia.
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Once again we see the flawed assumption that environmental management is a zero sum exercise in which resources devoted to conserving the environment are necessarily at the expense of economic growth. It's a mentality more suited to a cost accountant than an economist but then Sloan abandoned any pretence of scholarly objectivity many years ago.