Reducing Groundwater Entitlements in the Lower Murrumbidgee Groundwater Management Area

Abstract

This chapter explores the case study of the Lower Murrumbidgee Groundwater Management Area in New South Wales, Australia. In particular, it illustrates the contours of two policy approaches for water entitlement reduction: one was a failure (unilateral reductions imposed uniformly on all water users); and one was a success (financial compensation for cutbacks in entitlements, negotiated in the shadow of court action). The long-standing problem of over-allocation in the Lower Murrumbidgee was addressed initially through a process of entitlement reduction, driven by the government and involving a heated and contested policy approach. The primary method of reduction was an approximate 50% cut to all entitlements (regardless of capital commitments). This was challenged by a group of groundwater irrigators in the Land and Environment Court, who preferred to regulate pumping by managing the water level within a sustainable bandwidth. Although the case was unsuccessful, the judge raised concerns about the fairness of the new arrangements, and the irrigators planned an appeal. The litigation and threat of an appeal proved a catalyst for cooperation amongst groundwater users across the state, producing a policy shift that saw the government pursue a program known as Achieving Sustainable Groundwater Entitlements. This program recognised historical extraction in calculating entitlement reduction, and provided financial assistance to licence holders. Overall, this case study illustrates important lessons for policy approaches for reducing entitlements, not least the need to account for local knowledge and concerns, as well as providing adjustment mechanisms (e.g. economic compensation) to ensure the long-term sustainable management of groundwater.