Water consumption in the ACT is currently below the Sustainable Diversion Limit for the Territory. The ACT Government sought to assess the viability of interstate water trading, with the impact of trading on water security in the ACT potentially being offset by savings from water efficiency measures projects. The project supported the ACT government to understand the potential impacts, risks, costs and benefits of trading or selling water to the Commonwealth or others market participants.
To deliver this project, Alluvium teamed with DG Consulting, Frontier Economics, Tim Cummins and Megan Dyson. The body of work considered the feasibility of the ACT Government establishing water trading arrangements, and assessed the potential economic return and appropriate institutional and operational arrangements required to facilitate trade.
To this end, a draft ACT-NSW interstate water trading framework and implementation plan were developed. The likely impact on water security in the ACT from the transfer of water entitlement to the Commonwealth Government was also investigated. Finally, a preliminary assessment was undertaken of potential water efficiency measures projects in the ACT that could be funded through the Commonwealth Water Efficiency Measures Program. For each water efficiency measure project identified, an estimate of potential water savings and the life-cycle cost of the option were developed to identify the most cost effective opportunities.
The outputs of the work helped the ACT to consider what is the optimum approach to water management, which considers current and future population growth and demand, but also allows for the generation of income that may be directed to better catchment and river health outcomes.