Australia: Economic Resilience Through Adaptation in the Murray-Darling Basin

by Sarah Leck (Aither), Huw Pohler (Aither), Sarah Ransom (Australian Water Partnership), and Katharine Cross (Australian Water Partnership)

This case study is drawn from the larger report Managing Water for Economic Resilience: De-risking Is Not Enough, published April 2024.

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Key Messages

• The prolonged Millenium Drought served as a major catalyst for reform for Australia’s Murray-Darling Basin.

• Neglecting the environmental health of the Murray-Darling Basin has in the past led to adverse economic consequences. Balancing the needs of both the environment and the economy is essential for long-term sustainability and resilience in the Murray-Darling Basin.

• The use of new market-based instruments has proven to be a viable and efficient way to allocate water resources even amid changing conditions.

• Despite the improvements in policy instruments and objectives, challenges remain in ensuring that water management reflects its economic, environmental, and cultural values.

Introduction 

Australia’s Murray-Darling Basin (MDB) is the continent’s largest river system, crossing four states and one territory. The Murray-Darling is foundational to the economic, cultural, environmental, and community health of much of southeastern Australia, and is managed under difficult climatic conditions, including periods of severe water scarcity.  

For more than 65,000 years, First Nations people have sustainably managed the lands, waters, and natural resources for the health of their country and people. First Nations people in Australia have understood the importance of water and its centrality to life and have cherished it accordingly. Traditional ecological knowledge, often in the form of stories, is passed down from generation to generation, continuing to this day. This allows a symbiotic relationship with the land and water. 

This case study focuses on changing water management since the mid-20th century. It explains how evolving perspectives on the value of water have driven adaptive management of the system through past climatic extremes. The story of the governance of the MDB for greater resilience has not been linear or uncontested, and the framework continues to evolve with new pressures from climate change. In the future, effective water management will be even more important to ensure social, environmental, and economic resilience during periods of reduced water availability.

Droughts as Leverage for Water Reform

Significant development of the MDB’s water resources began during the early 20th century, with a focus on dams, agriculture, and service provision. By the 1960s, the water economy had begun to mature, and relatively low-cost sites for constructing dams and other infrastructure were largely exhausted. The costs of water capture and use, including infrastructure and service provision costs, became increasingly visible, as did the environmental costs. Salinity was affecting agricultural land, thereby negating some of the benefits of the water system for agricultural production. 

By the 1980s, water supply options were decreasing even further, while demand for water was continuing to increase. The 1982–1983 drought across eastern Australia, one of the worst of the 20th century (BoM, n.d), underscored the need for a change in water management. The focus of Australia’s water resources management began to shift to managing limited water resources more efficiently and sustainably to increase resilience. There was growing awareness of the need to address increasing water scarcity and environmental degradation, including the implementation of volume-based licenses to limit water use. 

Through the 1980s and 1990s, water management objectives began to account for both the wider costs and benefits of water use. This meant maximizing the economically efficient use of water while limiting environmental costs and impacts. Instruments to achieve this included:

• government commitments to capping total water consumption and allocating water for the environment

• enabling water trading

• applying full cost recovery and consumption-based pricing principles. 

The increasing complexity of policy instruments was justified by increasing demands and scarcity, and the need to address legacy approaches that did not reflect the multiple competing values of water use. There was a growing understanding of the connection between water scarcity, environmental degradation, and agricultural and economic outcomes for the region.

A further extreme drought between 1997 and 2009 (referred to as the Millenium Drought) put existing infrastructure, policy, and economic structures to the test in the management of scarce water resources.

The Millennium Drought 

During the Millennium Drought, southeastern Australia experienced unprecedented dry conditions. By the summer of 2006–07, the Murray River experienced its 10th consecutive month of record low inflow. In the 10-month period from June 2006 to March 2007, the inflow was 770 gigaliters (GL), which was less than 60% of the previous minimum of 1,350 GL in 1982–83 (MDBC, 2007). Melbourne's water storages plummeted from 97.5% full in October 1996 to only 33% by June 2010. In 2006, the inflows into the Murray system hit an all-time low, and only irrigation releases kept the river flowing, unlike in previous droughts in the first half of the 20th century (BoM, n.d).

Despite efforts to adapt to these conditions, water carting (i.e., bringing water supplies by trucks) was required to maintain essential water supplies for several towns and rural supply systems, major infrastructure projects were brought forward, irrigation allocations were the lowest on record, and water shortages were declared. The worst impacts of the drought were borne by the environment rather than consumptive users. This was because environmental flows were sourced from unregulated flows or spills from storage, which ceased during the drought. Secure entitlements still received a share of the limited water available, increasing resilience to low water availability for these users (DELWP, 2016).

There was a significant decline in the production of yearly crops in the basin from 2002 to 2009. The production of irrigated rice and cotton fell by 99% and 84% respectively. Conversely the production of perennial crops was only 32% lower from 2003 to 2007. Additionally, between 2007 and 2008, the Gross Regional Product in the southern MDB experienced a 5.7% decrease from the projected amount, leading to the temporary loss of 6,000 jobs. In the Murray region, tourism revenue in 2008 decreased by an estimated AUD 70 million due to fewer visitors (AWP, 2016).

As well as severe reductions in environmental flows, many urban centers in the basin suffered severe water restrictions as the drought affected runoff into water storages used to supply urban populations. The cost-reflective pricing used to set urban water tariffs meant that there was limited ability to increase prices as a mechanism to reduce demand. Governments therefore had to enact comprehensive restrictions on water use to protect limited supplies. In 2005, around 80% of city dwellers in Australia were subject to long-term water-use restrictions (Productivity Commission, 2008). These restrictions were applied very broadly and prices were mostly not used to change demand. Urban water prices therefore could not accurately reflect urban water users’ willingness to pay for water consumption and so were less effective in maintaining economic resilience for urban areas.

The Millennium Drought was particularly significant due to its interaction with the effects of climate change. The temperatures experienced during this drought were higher than those seen in previous droughts. These higher temperatures affected the intensity of the drought, leading to increased evaporation and affecting the health of animals and vegetation. The drought may also have been affected by climate change-induced alterations in rainfall patterns. Over the past few decades, there has been a significant decrease in rainfall during April to October in both southwest and southeast Australia. This trend towards drier seasons may have contributed to the Millennium Drought by preventing recovery between periods of acute dryness (BoM, n.d).

Reforms in Water Resource Management Because of the Millenium Drought

The prolonged Millennium Drought prompted a series of major changes in water management. There was an escalation in reforms to try to achieve previous commitments which had not been achieved, as well as addressing historic overallocation of water. The Australian Government also proposed an increased federal role in the management of water resources in the MDB due to challenges in the effective management of resources across state boundaries. 

Initial reforms to address environmental and cultural issues and improve the functioning of water markets

In 2003, the MDB Ministerial Council announced the “First Step Decision” to recover 500 GL of water for the environment for six sites of high environmental importance along the Murray River and to construct infrastructure to increase the efficiency of delivery of water for the environment (DEW, n.d.). 

In 2004, the National Water Initiative (NWI) was implemented. It proposed clear and nationally consistent characteristics for secure water access entitlements to improve their security and commercial certainty by specifying their statutory nature (NWC, 2011). The NWI also sought to improve the effectiveness of water markets, including by further unbundling land and water rights, and removing artificial barriers to trade such as administrative restrictions. Under the initiative, jurisdictions agreed that water access entitlements and planning frameworks would recognize the needs of First Nations Australians in relation to water access and management for the first time. Commitments were made to include Indigenous representatives in water planning, wherever possible, and incorporate Indigenous social, spiritual, and customary objectives — and strategies for achieving them — in water plans. Provisions were also made to consider the possible existence of native title rights to water in water planning processes, and to account for water allocated to native title holders for traditional cultural purposes (Productivity Commission, 2017). This represented a significant change in the management of water and provided an opportunity for increased social and economic resilience for Aboriginal and Torres Strait Islander peoples by appropriately reflecting their values in the management of water resources. 

Major changes in the management of water in the MDB

In early 2007, the Australian Government released the National Plan for Water Security. The plan continued the direction of reform set out in the National Water Initiative. It also included more than AUD 10 billion of new Australian Government funding to address overallocation in rural Australia through investment in irrigation infrastructure and buying back permanent entitlements for the environment (Australian Government, 2007). After a change of government later in 2007, the plan evolved into the Water for the Future program, with a budget of more than AUD 13 billion. The Water for the Future program included some initiatives to increase urban water security; however, it also had a significant focus on the MDB. It supported farmers and communities to increase resilience by planning for a future with reduced water availability and encouraging sustainability, irrigation productivity, and improved river and wetland health. Water for the Future has three main elements (NWC, 2011):

1. the Murray-Darling Basin Plan (the Basin Plan), implemented by the Murray-Darling Basin Authority (MDBA) to provide for the integrated management of water resources and to set scientifically-based sustainable diversion limits

2. buybacks of water entitlements for the environment from irrigators and their assignment to the Commonwealth Environmental Water Holder (or state equivalents) 

3. extensive investment in more productive irrigation systems.

These major changes to water management in the basin were given effect in interstate agreements and the Commonwealth Water Act 2007. The Act provided the legislative basis for the Murray-Darling Basin Plan, which is now effectively a transboundary water planning and legislative instrument to manage water resources in the basin. 

The Basin Plan – a new approach to managing water resilience

The Basin Plan was established by the Australian Parliament in 2012 to recover 2,750 GL of water for the environment from an annual consumptive use of 13,623 GL, or to implement projects that deliver “equivalent” environmental outcomes. The Basin Plan did not set the level of recovery to account for the impacts of climate change, particularly in the southern basin. At the time there were questions raised about how the final level of water recovery was identified and whether there was sufficient scientific evidence to support the agreed level. This lack of transparency led to some ongoing issues of trust and confidence in the Basin Plan, affecting its delivery. 

Following amendments to the Basin Plan under the Sustainable Diversion Limit Adjustment Mechanism, the overall target for water recovery was set at 2,075 GL per year (GL/y) plus 450 GL/y to support enhanced environmental outcomes. The Water for the Environment Special Account (WESA) was established in 2013, with AUD 1.775 billion to fund efficiency and constraint measures that would contribute to enhanced environmental outcomes. The Second Review of the WESA, released in August 2022, found that only 2.6 GL/y of the required 450 GL/y has been recovered, and that full recovery through efficiency measures would likely cost between AUD 3.4 billion and AUD 10.8 billion (Australian Government, 2021).

Overall, since 2012 there has been mixed progress in implementing the water recovery targets set under the Basin Plan. A series of institutional changes since 2012 have eroded regulatory oversight and confidence in national water reform. In 2013, the MDB Ministerial Council abolished the Sustainable Rivers Audit, a program established to measure the condition of the river systems in the basin. In 2014, the Australian Government abolished the National Water Commission, and, in 2017, revelations of possible water theft and meter tampering exposed inadequate monitoring and compliance regimes (Wentworth Group, 2017). The general functioning of the MDBA has also been called into serious question, particularly the transparency with which scientific research has underpinned some decisions (Walker, 2019). Water recovery targets originally set under the Basin Plan were to be delivered by 30 June 2024; with any deficiencies assessed per the reconciliation process provided in the Water Act. These targets are not expected to be achieved and the timelines have been extended by three years (DCCEEW, 2023a). 

Other recent changes have included the reinstatement of the NWI. A review by the Productivity Commission found that the NWI should be renewed and modernized to better account for changes in knowledge and technology and to address emerging challenges such as climate change and population growth (DCCEEW, n.d.).

River Basin Management As a Climate Adaptation Tool

The system in the southern MDB now provides an advanced approach to water allocation, enabling a flexible and resilient approach which can better respond to climate risk and water scarcity. The approach relies on a number of fundamental requirements to function effectively, including:

• robust planning frameworks

• stakeholder consultation

• clearly defined property rights

• metering and monitoring

• strong regulatory arrangements (including compliance) 

• a reliance on economic principles. 

The allocation system performs well, particularly given the highly variable supply of water in southern Australia and the prevalence of periodic droughts. As a result of the current system, a highly effective water market has been achieved in the MDB. 

The allocation system supports a high-performing, modern, and globally significant agricultural sector, valued at around AUD 24 billion annually. Australia is one of the most food-secure countries in the world (in the top 10), producing much more food than it consumes and exporting around 70% of agricultural production. Production has moved, and continues to move, towards higher-value and more efficient agriculture (including various forms of horticulture) and away from low-value crops and industries. However, there is still a large diversity of farming, including irrigated production of cotton, vegetables, rice (with a significant export industry), dairy, and almonds. Importantly, water moves between crops over time, facilitated by markets, which means that a different crop mix can be grown when water is scarce versus when it is more abundant. 

The water market is one of the key factors underpinning the ongoing success of irrigated agriculture in the southern MDB, including significantly reducing the economic impacts of drought and helping to manage the risks of climate change. Water markets are now integral to Australia’s regional economies and help to support production and growth in these regions. This approach can enable agricultural producers and other industries to flexibly meet their water requirements, and balance risks and returns. They have greater resilience in the face of a changing climate due to the ability to better adapt to changing water availability. This was seen during the Millenium Drought where water trading was highly effective in reducing the economic costs (for the agriculture sector, specifically), with the gross value of irrigated agricultural production in the MDB falling by only around 14% between 2005–06 and 2007–08, while water use fell by 57% (Goesch et al., 2019).

The functioning of water markets has also been tested more recently during a period of drought between 2017–2019. Many areas of the country experienced high temperatures and rainfall that is well below average; 2019 was the warmest and driest year on record for Australia (BoM, n.d.). These severe drought conditions adversely affected economic activity. Farm GDP declined by around 30% between 2017–2019 — comparable to the decline observed during the 2002–03 and 2005–06 episodes of the Millennium Drought (RBA, 2020).

In 2019–20 the area of summer crops planted in New South Wales was 79% less than in 2018–19. The area planted for cotton fell by 83% due to low irrigation water supply and soil moisture levels that were insufficient for dryland cotton crops (ABARES, 2020). However, once the drought broke in 2020–21, there was a significant increase in plantings as markets recovered. In 2021–22 the area planted for cotton in NSW increased by 111% (193,000 to 406,000 ha) compared to the previous year. It was the largest area planted for cotton over the last 30 years (when ABARES records began). The area planted for rice in NSW increased 35% (45,100 to 61,000 ha) (ABARES, 2022).

Without direct exposure to water markets, there is no corresponding mechanism to account for value in environmental and urban water use. Before the Millenium Drought, the expectation for water utilities was that they would provide clean, reliable, and affordable water and wastewater services. However, the Millennium Drought highlighted the importance of water and water environments to both urban and rural communities, both for water supply and for amenity, recreational, and environmental outcomes. Local lakes and streams dried up (particularly in regional communities), and urban communities had limited water use due to restrictions. As a result, there has been a greater appreciation of the contribution that water management and water environments can make to amenity, livability, recreation, and regional tourism (Productivity Commission, 2017). The tourism industry in the MDB is now estimated at AUD 11 billion per year (MDBA, n.d), increasing the importance placed on managing environmental assets to ensure ongoing tourist visitation to the area. 

Since the Millenium Drought, the environment has been established as a legitimate water user. Water plans now include an identified sustainable volume available for consumptive use, helping to limit further environmental degradation. There has also been a reallocation of water from consumptive use to the environment in overallocated systems (Productivity Commission, 2017). Governments have changed throughout the process and not all targets are on track to being achieved, but the commitment to returning water and achieving the long-term annual average targets has been bipartisan (although there has been contestation of the approach from different jurisdictions). Repairing the long-term environmental degradation in the basin will be an ongoing process, but there are some early indications of the benefits of increased water for the environment. Environmental water provisions have contributed to improved local ecological outcomes such as breeding of native fish, frogs, and waterbirds, improved conditions of native vegetation, and better water quality (MDBA, 2020).

Most jurisdictions have improved their engagement with Indigenous communities for water planning and management (NWC, 2014). The Basin Plan required water resource plans for the states and territories to identify Indigenous outcomes. Ensuring that cultural values are recognized and provided for in water plans has been an ongoing aspiration for Indigenous communities, leading to the inclusion of provisions in the NWI to meet that goal. In recent years, some states and territories have made progress in ensuring that water planning includes adequate consultation with Indigenous communities, but this is yet to translate into explicit detailing of cultural values and outcomes in water plans (Productivity Commission, 2021).

Effective Policy Instruments for Increased Water Resilience

The two key policy instruments that have been most effective in improving water resilience and economic resilience in the MDB are cap-and-trade mechanisms and cost-reflective charges for infrastructure and services:

• Cap-and-trade mechanisms have been used to create a market for surface water that has enabled water to be reallocated to more productive uses and return water to the environment in overallocated systems.

• Cost-reflective pricing has been used to identify appropriate levels of investment in infrastructure and service provision. It has enabled high levels of service with very low water losses in Australia in comparison with other countries. 

These instruments are discussed in more detail below. 

Cap-and-trade mechanisms

Water markets were primarily introduced to allow users to manage water within a total limit, and drive more efficient and higher-value water use by signaling the scarcity of water. In broad terms, the objective of water markets is to efficiently manage the allocation and reallocation of water among competing users, given scarcity. Effectively managing reallocation of water enables increased resilience in the face of climate change, drought, and decreasing water availability. 

Water markets were seen as the most effective way of allowing reallocation between users, as they allowed water users to make decisions about the value of water based on their intended uses. In the absence of a market, there would be no opportunity for reallocation, or the government would need to unilaterally assess and reallocate water (which it is not well placed to do). The introduction of water markets was concerned with achieving both economic efficiency and environmental sustainability.

The water market placed decision-making in the hands of individual private enterprises and users and, by design, required gains from trade for buyers and sellers for any reallocation (trade) to occur. With the presence of appropriate rules to manage third-party impacts, trade provides a more fair and equitable approach, as well as being more efficient (NWC, 2011). Australia’s water markets, and the supporting institutional, regulatory, and operational settings, are now well developed. These outcomes are the product of a long period of hard-earned reforms. 

Australia now has many systems that enable market-based trade including:

• entitlements with clear characteristics

• comprehensive registers

• fast trade processing times

• interstate trade

• deep broker markets. 

There are now large volumes of water trade and a wide range of participants. Barriers to trade have been removed, and the remaining rules are generally for hydrological reasons only, to protect third parties and the environment, and are clear and well understood. While there has generally been increasing interregional trade, trade restrictions can still occur which can affect prices during periods of low water supply. 

Cost-reflective pricing

Water tariffs in Australia are currently designed with the objective of economic efficiency through the use of cost-reflective pricing. Independent economic regulation has been key to cost-reflective pricing. The NWI required that independent economic regulators have a role in the review or setting of prices for water services. Independent economic regulation encourages efficient service delivery by applying rigorous scrutiny to operational and investment decisions. It facilitates consistent and improved planning, increases the transparency of decision-making, and reduces the risk of political interference in price-setting processes. Cost-reflective pricing is now used for urban water supply and wastewater management, and for major irrigation schemes. 

Water efficiency initiatives during the Millennium Drought were extremely effective in decreasing per capita water use. This reduction in water use has been maintained even after the drought ended. Utilities across the country can continue to provide high quality safe and secure supplies — even when faced with extreme climatic events. It is estimated that households and businesses are now saving over AUD 1 billion a year on utility bills as a result of the Water Efficient Labeling and Standards (WSAA, 2019).

In the urban sector, the move to cost-reflective pricing was often accompanied by the introduction of some level of consumption-based pricing. Along with restrictions and awareness campaigns during droughts and regulatory changes, this resulted in changed consumer behavior and lower household water use (Productivity Commission, 2017). 

Most major irrigation areas also now achieve full cost recovery of both capital and operations and maintenance costs. In broad terms, irrigators in Australia have very high levels of service compared with other countries, including on-demand ordering, high levels of automation, relatively low levels of water losses, sophisticated billing, customer, and information services, and metering and monitoring. However, a constant challenge is the tendency to “gold plate,” or overinvest, in assets without sufficiently considering the ongoing maintenance costs that irrigators must continue to meet. Despite privatization, investment in rural water infrastructure often becomes a political issue, with evidence on the economic and environmental costs and benefits being ignored if it does not meet the political desire for investment.

Major Challenges in the MDB

Although there have been many successful reforms over the past 100 years, and positive environmental, economic, and social outcomes have been achieved, the MDB still faces challenges. Water recovery in some districts has often compounded or occurred in parallel to the many other economic pressures facing rural and regional Australia, which have led to significant challenges for many agricultural communities. For example, while individual irrigators have benefited from various reforms, less than 1% of the AUD 13 billion allocated to water recovery through the Water for the Future program was made available to assist communities affected by the reforms to adapt to a future with less water. A consistent approach to identifying the costs and benefits of water reform, which focused on economic resilience for affected communities, would also enable more effective delivery of environmental outcomes by increasing buy-in and goodwill for reforms. Governments face challenges in addressing these issues without negating the benefits that water markets generate.

Challenges have also arisen in the effective functioning of water markets. A recent review by the Australian Competition and Consumer Commission (ACCC, 2021) concluded that the governance, regulatory, and operational frameworks supporting water markets have not developed to accommodate the current scale of the market and are no longer adequate. A serious consequence of these problems is that many water users do not trust that the markets and key institutions are fair or working to the benefit of water users, particularly irrigation farmers. This hinders further reform and can also lead to issues such as reduced compliance or water theft.  

The implementation of the Basin Plan since 2012 has achieved important results, with progress and measurable outcomes observed at the basin scale. However, the Basin Plan cannot effectively support many floodplain and wetland ecosystems until critical water infrastructure is improved and river operating rules are in place. Several major fish death events in 2019 demonstrate the need for whole-of-system management and the urgency to address some of these matters. The Basin Plan, and the state and territory governments implementing it, must continue to adapt and improve approaches to managing water quality and salinity, particularly in the context of low- or no-flow conditions (MDBA, 2020). 

Despite progress, there is also a growing divide between perceptions and reality with regard to water management. Some communities feel that social and economic conditions are declining as a result of water reform, and that the government has failed them. This is often connected to broader economic trends. Larger communities have generally thrived, whereas smaller communities have suffered as a result of structural adjustments such as population decline and changing industrial structures. In particular, there has been resistance to buybacks for environmental water, even though it was the least-cost approach from a society-wide perspective. The government response had previously been to invest in on- and off-farm water infrastructure to deliver water savings, which have been converted to water licenses held by environmental water holders (purchased licenses are also given to the same public environmental water holders). More recently, there has been a renewed commitment to buybacks to meet the shortfalls in recovery targets under the Basin Plan (DCCEEW, 2023b) 

Summary 

Water policy in the basin is now designed to support an open and flexible economy, resilient and adaptive businesses, cultural values, and a healthy environment. The current objectives of water management reflect an increasing acceptance of the need to value water across its many competing uses, to support improved resilience in water use, and in economic, social, and cultural outcomes for the community. The policy instruments in the basin have been developed to support these aims and objectives. 

Successive governments have contributed to increased efficiency, growth, and productivity through competition reforms and deregulation across all sectors of the economy. This is seen in Australia’s highly unsubsidized and unregulated agricultural sector, and in water entitlement and market reforms. Although there have been setbacks, this strategy has achieved positive results and could provide a model for other countries or regions wishing to develop a strong and resilient water sector.

Despite the improvements in policy instruments and objectives, challenges remain in ensuring that water management reflects its economic, environmental, and cultural values. There is scope to further refine the approach to water policy and management in the MDB. This includes: 1) addressing stakeholder misperceptions and angst, 2) better achieving and demonstrating outcomes for communities, industries, and the environment, and 3) applying more flexible and effective reforms that focus on improving water resilience, particularly in the face of climate change. Recent experiences of extreme dry conditions in the basin and community discontent highlight the importance of these different uses and values and their tradeoffs, and the continued need for policies to focus on increasing resilience. Failing to do so leaves water policy vulnerable to short-term decision-making and uncertain long-term costs. 

Improving the ways in which we manage competing water use and values in the basin can help ensure that the right policies and levers are used to benefit the community as a whole. The increasing value of scarce and variable water supplies in the face of climate change underscores the importance of getting policy and management implementation right, including managing tradeoffs across communities, industries, and the environment.

Lessons Learned

Water management in the Murray-Darling Basin has yielded several key lessons that have informed and reshaped policies and practices: 

• Drought and periods of low supply can be used to deliver positive water reform. The prolonged Millenium Drought served as a major catalyst for reform. It demonstrated the MDB's vulnerability to extended water scarcity, prompting policy-makers to address longstanding issues in water management. Increasing the resilience of the region to periods of reduced water supply, including economic, social, and environmental resilience became a major focus for policy-makers.

• Market-based instruments can be highly effective in promoting economic resilience. Water trading and the establishment of water markets have emerged as powerful tools in the Murray-Darling Basin. These mechanisms enable a more efficient allocation of water resources, empowering farmers and businesses to adapt to changing conditions and make informed decisions regarding water usage, thus bolstering their economic viability.

• Failure to account for the impacts of climate change can undermine effective water management. Climate change poses a growing threat to water availability in the MDB, and overlooking these effects can lead to mismanagement of water resources. It is imperative that water management strategies integrate climate data and scenarios to prepare for the long-term challenges posed by a changing climate. Investment in adaptation measures, such as robust water storage and distribution infrastructure, must also account for the expected effects of climate change.

• Collaboration with local communities and stakeholders is vital in the effective management of water resources. Engaging with and involving Indigenous groups and communities in decision-making processes not only fosters trust but also ensures transparency in water management. It allows for the consideration of the diverse needs and perspectives of the MDB's residents, making policies and actions more responsive to the real-world challenges faced by the community.

• There is a clear link between environmental and economic outcomes and resilience. Neglecting the environmental health of the Murray-Darling Basin has in the past led to adverse economic consequences. Ecosystems within the basin provide vital services such as water purification, salinity management, and biodiversity which supports both the agriculture and tourism industries. Recognizing the interdependence of these outcomes is critical for sustainable water management. Balancing the needs of both the environment and the economy is essential for long-term sustainability and resilience in the Murray-Darling Basin.

The experiences and lessons learned from water management in the Murray-Darling Basin since the Millennium Drought have reshaped policies and practices. These lessons are crucial as the region continues to navigate the complex challenges of water resource management.

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Wentworth Group. 2017. “Review of water reform in the Murray-Darling Basin.” Wentworth Group of Concerned Scientists. https://wentworthgroup.org/2017/11/review-of-water-reform-in-the-murray-darling-basin/2017