The Fifth Stage in Water Management: Policy Lessons for Water Governance

Effective management of water resources is a critical policy issue globally. Using a framework developed by Turton, and a common set of characteristics describing key stages of water demand, we examine the effectiveness of isolated technical (e.g., irrigation upgrades) and allocative (e.g., buyback) efficiency for reducing water demand to sustainable levels. We base our analysis on Australia's water reform context which offers an advanced example of applying these levers to achieve allocative and technical efficiency. The study is motivated by appreciation of the benefits from increased policy flexibility and adaptability in response to the following: potential transformations toward inflexible production systems; uncertainty associated with impacts of climate change on future water reliability; and the need for increased possible future equity between uses/users (productive/consumptive, environmental, cultural). Our results highlight that a balance between technical and allocative efficiency mechanisms is necessary, as neither is sufficient in isolation, when seeking to reduce total water use. This approach also enables a clearer representation of uncertainty in future policy choices in many global settings with respect to water demand reduction. Key Points Australia has advanced experience with allocative and technical efficiency levers to reduce total water consumption A framework calling for balance between these levers in practice is tested, and stylized examples are used to reinforce case study analysis Results emphasize the importance using both levers to balance contraction efforts with implications for water management in global contexts