Should Adelaide desalinate more water?

Nik writes*

Adelaide lies at the mouth of the Murray River, where Australia’s largest river system, the Murray-Darling Basin, meets the ocean. Today, the Murray River is struggling. It is being diverted at an unsustainable rate, mostly by farmers, as its tributaries make their way through four Australian states and at the capital territory before joining the Murray River and flowing into South Australia and Adelaide.

For decades in the 20th century, Australian state governments were handing out water rights left and right to farmers across the basin. By the 90s the Murray River mouth was silting up, threatening Adelaide’s water supply. The Millennium drought from the late 90s to 2010 added even more pressure on the ecological well-being of the river system and the people who depend on it.

At the height of the drought, in 2007, two important things happened. The Australian government passed the Water Act and Adelaide announced plans for a desalination plant. The Water Act gave birth to the Murray-Darling Basin Plan of 2012, which aimed to recover 2,750 gigalitres of water from irrigation back into the river system. Adelaide’s desalination plant was to provide water security to Adelaide and beyond.

As the health of the Murray River is threatened today, could this desalination plant be the silver bullet needed for Adelaide, other users in the Murray-Darling Basin, and the river itself?

With its capacity to produce 100 gigalitres per year, the idea is that supplying this water to the people of Adelaide could free up water allocations for users upstream. There is room to ramp up desalination. Currently the plant is at minimum output, even shutting off during wet seasons. And though desalination is relatively expensive, the Australian government said it would step in and subsidise the water for farmers upstream. While users in Adelaide would pay their ordinary price of around 2.00 USD per 1000 litres, farmers upstream would pay less than 0.07 USD per 1000 litres for the allocation.

But like any solution, there are costs. Most obviously, there is the difference between the production costs of desalination (0.63 USD per 1000 litres) and its price (0.07 USD per 1000 litres), a gap that taxpayers will cover. Additional allocations of surface water in the basin at extremely low prices will harm the health of the river system and won’t incentivize saving water. It is important for the health of the river, and for the ocean that the Murray River reaches the ocean, which it does less than 90% of the time.

If not desalination, then how can Adelaide and upstream users get enough water while ensuring the river flows? The Murray-Darling Basin Plan has so far spent nearly 4 billion USD on recovering water from irrigation, two thirds of which has gone to subsidising irrigation infrastructure. There is no evidence so far that this has increased river flows at all. On the upside, scientist analysed Australian government data and found that the government buying water from irrigators is far more efficient.

Bottom line: Adelaide’s desalination plant is not the silver bullet that will save the Murray-Darling Basin, because the allocations it would free up ultimately harm the basin and the beings that depend on its health. Policy makers should instead look for ways to incentivise users to reduce their consumption.

* Please help my Water Scarcity students by commenting on unclear analysis, alternative perspectives, better data sources, or maybe just saying something nice 🙂

Author: David Zetland

I'm a political-economist from California who now lives in Amsterdam.

One thought on “Should Adelaide desalinate more water?”

  1. You have written a clear and interesting post on the water scarcity issue in Adelaide. The setup of the blogpost is very well done as you go through the issues, background, and the implementation of the Water Act to solve the issues. You did a good analysis on the desalination plants because you described how they help tackle the water scarcity issues today, while also describing the shortcomings of this solution. Your recommendation is overall a good conclusion on how to solve the issues that are present. I would recommend to further describe how and which policies can lower water consumption. Overall, a very nice and short overview of the scarcity issues in your case-study city. A further investigation on the water rights and the farmers would be interesting to put in your final essay.

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