Monitoring and Accounting for Water Trade in the Murray-Darling Basin

A detailed system of continuous water accounting exists to manage the waters of the River Murray system available to New South Wales, Victoria and South Australia. It is now possible to trade water entitlements within and between States. Trade may be temporary or permanent. Trade within a single irrigation area is simple to account for. It becomes increasingly complex when it is between irrigation areas, between irrigation authorities, between tributary valleys and between States. Permanent trade introduces a further complication in that the long term security of supply differs between systems. Somewhat arbitrary rules have been developed to deal with these issues. The prospect of increased permanent interstate trade raises the question of how best to reflect that trade in the water accounts and in Caps imposed on water diversions by the States. There are also issues of how to account for the environmental effects of trade. The current initiative to return water to the Snowy River also introduces water accounting issues. Some of the feasible savings in the Murray and Murrumbidgee Rivers are difficult to capture, but would largely flow unregulated down the River Murray. Various advances are being made to keep track of movements of water and water entitlements. However a robust and consistent framework for the accounting of traded water is lacking. This paper describes the development to date of such a framework and points to key issues requiring resolution.