A CRITICAL ANALYSIS OF THE NATIONAL WATER INITIATIVE

DANIEL CONNELL, STEPHEN DOVERS AND R QUENTIN GRAFTON

ABSTRACT:

In June 2004 the Council of Australian Governments approved the Intergovernmental Agreement on the National Water Initiative ('NWI') and a subordinate document, the Intergovernmental Agreement on Addressing Water Overallocation and Achieving Environmental Objectives in the Murray-Darling Basin ('IGMDB'). This article places the NWI within its broader context and discusses the practicalities involved in implementation. The NWI is a significant innovation, but as a package it has not yet undergone the testing and tempering required to make it effective public policy. In attempting to achieve economic and environmental improvements by reogranising the management of water, the NWI takes on a task of great complexity. One of the most important features of the NWI is its determination to apply recent thinking about the applicability of property rights instruments to natural resources management. While this article sees many benefits that could be gained from the application of property rights instruments to water management, it argues that such instruments will need considerable refinement before they can be used as effective tools to achieve the social and environmental objectives of the NWI. The article also discusses the more speculative subject of the implications of the NWI for the Australian federal system.