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ABSTRACTThis paper examines water management within the environment. It argues that discussion of, and decision‐making governing, the allocation of water for the environment should be expanded to consider the application of demand management to the environment. The paper examines the technical feasibility of this aspect and proposes some principles which address parity across water‐use sectors in terms of their water rights, responsibilities and performance objectives. It concludes that a more equitable policy framework encourages better resource analysis and promotes better informed trade‐offs and management concerning water allocation, particularly in times of low water availability.