[MR] BusinessSense: Don't Abuse NZ's Most Precious Commodity

Water is one of NZ's amazing assets. In most parts of the country, most of the time, we have it in abundance. It is a powerhouse both of the country's agricultural life-blood, and the electricity which keeps industry ticking.

Management of water, and control of it are going to be critical to New Zealand's future. Some analysts say the next major conflicts around the globe will be fought not over oil, but over water.

Australia has a mighty problem on its hands due to mismanagement of its water resource, which is far more scarce and fragile than our own. It is trying to regain control of the resource at central level, in the face of significant resistance.

The NZ Govt has taken a bold step in its efforts to wrest control of water back from Regional Councils, and how it handles the issue will be a major test for Environment Minister Nick Smith. Trans Tasman http://www.transtasman.co.nz outlines the argument.

"Economic Debate - Where To For Water?

The Govt at last is taking steps to better manage NZ's fresh water, focusing on quality, quantity, allocation and infrastructure (including water storage).

We have plenty of the stuff - it's the key to our competitive advantage in agriculture and renewable energy and is essential to our environment and lifestyle. But in some parts of the country demand outstrips supply, inhibiting economic development.

The newly announced Land and Water Forum involving major water users (agriculture, industry, power generation) and major environmental and recreational groups is charged with finding a better way of handling the resource, while water infrastructure is an important part of the work of the National Infrastructure Advisory Board.

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Economists couldn't excite much interest when they tried to promote water management as a policy issue a decade or so ago. Work was started on improving the quality of the water (bringing dairy industry practices into question).

Trying to include water among infrastructural issues, along with transport and communications, has not been so easy, although the Business Council for Sustainable Development produced a sophisticated report last year (based on two years of research).

It said water in most major NZ catchments would be fully allocated in four years; a "gold rush" for water was already under way; and no water meant no new business, causing significant economic loss.

It also found 20 - 80% of water allocated for commercial use (including municipal water supplies) in some waterways is not being used at any point in time.

Allocation can't be improved without putting a price on water and introducing tradeable quotas, to facilitate the transfer of water from one commercial user to another and encourage more efficient use.

Only when a value is placed on water will greater effort be made to store it, rather than persist with tapping into aquifers which are becoming stressed. But there are political snags. First, the commercialisation of water raises the hoary issue of privatisation.

Economist Brian Easton says the challenge is determining at what point on the pipeline between rainfall and your adding water to your scotch has it moved from public to private ownership. Second, there's the question of Maori entitlements under the Treaty of Waitangi.

One idea is to grant "grandfather rights" where water is now allocated, but give Maori a 20% share when new allocations are made. But for now, the big deal is water is on the policy agenda."

NEW ZEALAND ENERGY & ENVIRONMENT BUSINESS WEEK Powerful and up-to-date, it covers Emissions Trading Scheme, Climate Change & Carbon Trading, the Resource Management Act, the Kyoto Protocol, Energy Supply Security, Electricity Generation, Renewable Energy, Oil & Gas Exploration, Energy Efficiency, Water Management, Sustainability. Covers policy announcements, draft legislation, amendments to Acts and regulations. Also includes NZ Energy & Environment Weekly Digest. Published every Tuesday. 46 issues per year. Not a subscriber?... go to our website to receive our special introductory offer.

http://www.nzenergy-environment.co.nz

We expect the Govt to safeguard the country's precious natural resources. But the biggest test for this Govt will be when the day comes to fix a price for a resource which for many has been free for as long as they can remember.

The question is whether the NZers who have not yet been hit with metered water charges will consider the resource important enough to pay a price for its protection. Only time will tell.

To find out more about our publications, please visit these websites: http://www.themainreport.co.nz http://www.transtasman.co.nz http://www.nzenergy-environment.co.nz http://www.nztransport-logistics.co.nz http://www.nzagri-business.co.nz http://www.health-wealth.co.nz

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