The effect of climate uncertainty on the urban water balance in Western Australia

It is difficult to tell a simple story of the water-balance situation in Western Australia because of inconsistency between the governing agencies. On the demand side, the reality is that water is too cheap and demand is too high; and even considering the fact that consumers are on two-day per week sprinkler restrictions, unrestricted per-capita urban demand would probably be lower than current demand if price signals were corrected.[2] On the supply side, one of the major sources of water for Perth, the Gnangara Mound,[3] is in a serious state of degradation, and the Department of Water has been found by the Environmental Protection Authority to be in breach of Ministerial conditions regarding groundwater levels that were put in place to protect water-dependent ecosystems (Environmental Protection Authority of Western Australia 2007a and 2007b). The Department of Water (Department of Water 2007) has adopted the position that groundwater decline on the Mound is largely due to climate change (and therefore not their fault), while at the same time the amount of water allocated from the Mound in recent years has been allowed to increase to compensate for the climate-change impacts on surface-water reserves. That is, one of the key responses to the recent water shortages in Perth has been to mine the Gnangara Mound, rather than to reduce allocations in response to a drying climate. The Gnangara story is more complex again, because the Water Corporation is the highest-value user on the Mound and only represents 48 per cent of consumptive uses (Marsden Jacob 2006). With stronger governing institutions the amount of water allocated to the Water Corporation in recent years may well have increased, but in lieu of other consumptive uses rather than environmental uses.

The focus of this paper is on the decision-making of the water utility; and therefore, rather than focus on the optimal resolution to the above issues from a social point of view, the approach taken is to use the planning context faced by the Water Corporation.[4]

The mean water-balance situation, given current institutional arrangements, is shown in Table 1 for the four climate scenarios discussed in the previous section as well as the complete (post-1911) historical record. The data in this table reflect average system yield and provide a simple exposition of the impact of climate-change assumptions on system yield and the planning deficit; hence the pressure for early augmentation. Note that the difference in system yield between the best- and worst-case climate assumptions in Table 1 is 60GL, which is a large amount of water by urban planning standards — for example, the capacity of the desalination plant at Kwinana is 45GL.

The investment in the first desalination plant, at Kwinana, was prompted by the acknowledgement that the complete historical sequence was no longer relevant for planning purposes. Analysis by the IOCI had shown a dramatic change in weather in the post-1975 sequence and the difference in yield between historic and post-1975 climate has a dramatic impact on yield.[5] In the absence of this first desalination plant, urban supply was insufficient to meet projected 2007 demand for all scenarios except the post-1975 climate. The additional 45GL provided by the investment in desalination at Kwinana has provided sufficient (average) capacity to meet 2007 demand levels for all climate scenarios. However, by 2010 demand growth would be sufficient to cause a significant deficit in capacity under the six-year climate scenario. This climate scenario is necessary to justify the current decision to construct a second desalination plant to augment water supply in 2011. If the IOCI predictions are taken to be the ‘best science’ relating to the matter, there is no justification for augmentation in 2011.[6]

[2] According to simulations from a model of household water demand reported in Brennan (2006).

[3] The Gnangara Mound is a system of four aquifers underlying the north metropolitan and peri-urban area of Perth and is the largest single source of water for urban supply, as well as a major supplier of water for irrigation of fresh produce supplied to the Perth market.

[4] The current allocation rule for Gnangara groundwater, which allocates water above historical levels on a sliding scale according to dam reserves, is assumed to be in place. Whilst a draft resolution to allocation issues on Gnangara Mound is expected to be produced by 2009 (Department of Water 2008), if seasonal trade is institutionalised then a market-based solution may show the same pattern of urban water use as the current sliding-scale rule.

[5] The magnitude of this impact led to the so-called water crisis of the drought year 2001. Five years earlier, the Water Corporation had issued a planning document that declared that existing source developments were sufficient water for the foreseeable future (Stokes et al. 1995). In that document, the issue of climate change was mentioned but not factored into the analysis. The ultra-conservative approach now being taken by the Water Corporation may reflect this experience.

[6] There is a slight deficit for the worst-case scenario, but these climate forecasts are expected to represent yield in 2050, with a gradual decline from the experience from the past two decades.