And as we imagine the sustainable future we want, could we consider how the environment itself and particularly the water sector can do some of the heavy lifting. We recognise that public health and safety, food security, energy security and liveability are all underpinned by water security and reliability.
Economic resilience is intrinsically tied to our precious natural resources. We saw after the global financial crisis in 2008/09 how it was Australia’s mining industry that helped the country to recover quicker than others. With increasing economic growth and climatic variability could it now be the water industry’s turn to play a rebuilding role for the nation?
It seems that in recent months we have moved from one crisis to another, from bush fires to a global pandemic, to an economic emergency. But lost in the panic of all of this has been a glimmer of hope as Australia begins to recover from prolonged drought. We can use this lifeline among the devastation to put a plan in place for an early economic recovery. Water is the invisible backbone of the country’s economy; from the regional centres to the capital cities. Our survival depends on it, so it should perhaps be a centrepiece of the stimulus.
It now feels like the right time to have the policy debate on what is the right investment in water resilience and security; how do we best achieve equity across our regions; and how do we get the right balance between new infrastructure and investing in capability and excellence.
What is our vision for a future Australia? Do we want to merely resume where we hit pause in January 2020? When catastrophic events pummel communities, whether flood or fire or virus, it is not enough to simply limp back to what was before, but strive for greater resilience, especially since these events could recur.
Droughts sometimes take six or seven years to bite for the larger cities whereas for small towns and broadacre farms, two years of drought can mean disaster. They are inexorable and they grind the community down over a long period as the Australian drought has done in recent years. But long periods without rain often break very quickly and that is what we are starting to see now in Australia. We may have a quick recovery period and return to water supply security, but another drought or bushfire may be waiting in the wings.
There is a timely opportunity to use this flow of water back into our system to create a wave of stimulus that creates resilience. But if we are to harness this potential, we only have a short window of opportunity to do it and we need to use this time in a way that gets the most out of the transition for our future economy.
Transitioning in such a complex world needs adaptive planning. Acting locally, we need to turn our minds to understanding the small practical steps of transition from the old to the new. This is a collaborative effort of reconstruction and renewal towards resilience.
As we collaborate in fighting COVID-19, we are building the very capability needed to address other chronic problems we have struggled with for years, such as droughts and floods.
Our regional and rural water schemes run counter to natural climatic cycles and flow regimes, and the more we force the system to meet competing interests the more we fail to find a balance. Even dryland farming and grazing struggle with the ever-increasing climatic variability, to the point of failure. For example, five years of drought halved Queensland’s cattle herd, and wide-spread flooding decimated the survivors.
Traditionally, our urban water systems are designed to deliver peak flows to ultimate growth and demand and to meet fire-fighting flows; these networks were not designed for decentralised solutions, emerging demand patterns, digital enablers, future technologies, co-delivery of services and off-grid trends. That means there is a need to uplift infrastructure planning to get the best out of existing water infrastructure and to strategically plan to improve water quality.
It is not just a question of how we return the flow; it is also about how we return the quality of this flow. We need to put systems in place now to do this. The energy sector in Australia demonstrated the consumer to prosumer transformation, with more than 24 per cent of the total energy produced through renewables in 2019, including roof-top solar power.
A transition plan that looks at opportunities for shared value creation is paramount. The nexus of water-energy-land offers best solutions for shared value creation. Considering that land produces food, fibre, fuel, ecological services and liveable places, there are numerous opportunities to create the new resilient economy, that transects our regional areas and cities.
Consider how and when we lift some of our urban water use restrictions. We cannot simply turn all the taps back on; we can put in place programs that support a transition that stimulates the economy through increased production or efficiency. So, for example, a city’s water data could be made available for investors to reduce losses or leakage and create water savings. These sort of city deals produce shared value and benefit. It is about leveraging a whole of system and total value approach to ensure that this opportunity is not wasted.
Based on advisory experience for large infrastructure and operational programs across Australia, a preferred approach could be to invest in desired outcomes rather than just funding inputs. The aim would be to bring a new balance and greater resilience to our economy. Adaptive planning focuses on these outcomes and maps pathways towards these. This is consistent with the emerging new economic and financing models – such as impact investing, social capital, ethical investments, outcome-based financing and environmental futures.
With the current low cost of debt and healthy debt-equity ratios, it is an opportune time to invest in new capital infrastructure as well as in a spectrum of blue, green, grey, brown, digital, foundational, soft and knowledge assets to produce a more resilient society.
A transition plan could include adaptation and mitigation towards drought and flood resilience and food security.
A clear transition process would leverage combined capability from engineers, policy makers, city planners, economists, data analysts, agricultural scientists, farmers and resource managers. An example of this could be how we provide access to our regional food producers in a way that targets those areas that would provide an economic stimulus and environmental sustainability.
Could science, technology and economics create future farms in the city and in the desert within the water, energy and land nexus?
There is plenty of debate about growing cotton and rice in Australia, however, the point is often missed that these annual crops are most flexible to respond to water availability, climatic variability and market forces. Almonds, grapes and other horticulture may use less water, but require highly secure water supply and more capital investment and hence are not flexible to varying water availability and the vagaries of markets.
Given the increasing climatic variability and economic uncertainty we need to reconsider how we support our markets in making the best long-term decisions on sustainable agriculture. This is just one example, but a comprehensive transition plan focused on the value-add potential of water would encourage the economy as a whole, to stimulate development, jobs and trade to create more sustainability than existed pre-drought and pre-COVID-19. One aspect of the transition is adaptation and mitigation towards drought and flood resilience and food security.
The water sector has a role to play in creating a resilient, strong and sustainable economy. The water-land-energy nexus produces food, fibre and fuel as well as ecological services that sustain our communities. At the convergence of these sectors however, there are volatile, complex, uncertain and ambiguous waters to navigate in.
The water industry’s adaptive planning capabilities can assist Australia in navigating future shocks and variability and increase our resilience to environmental, economic and social challenges.
Adaptive planning is an approach that helps partnerships of stakeholders to deal with complex scenarios and uncertainties in a transparent and robust way. It supports the process of decision making on policies, plans, implementation and infrastructure investment. The approach links current decision making to future choices, keeps options open and increases agility and flexibility to respond to future trends and shocks. We saw this in the way governments of all persuasions partnered to respond to Covid-19.
Adaptive strategies, planning and management is inherent to water resource management, particularly in Australia the ‘land of droughts and flooding rain’. This inherent capability gives the water sector a unique ability to step into the economic transition process. We can use our industry to stimulate the economy and to create a more resilient future.
There are already excellent examples of investment in water efficiency measures in our agriculture sector, and of initiatives to improve environmental outcomes.
However, there is not a holistic approach to incentivise the optimal set of initiatives from an overall catchment, economic, environmental and social perspective. The vision is to design for resilience, focused on best outcomes for the catchment and for communities. The design results from a collaborative partnership with communities, experts and industry. This leads to a well-designed program built on trust and focused on long term outcomes.
An example is achieving effective and efficient delivery of water to communities and the environment and reinvesting the efficiency gains to not only create jobs in regional areas, but also create a sustainable future for irrigation communities, production, processing and transport industries.
Can adaptive planning be used to create a sustainable future for irrigation communities?
What we know is that water security is essential for economic security so why not use this currency that is starting to flow back into Australia to help make the economy buoyant again?
The time is now to use the water sector to put in place a transition plan to support our economy and enable our communities and businesses to be more resilient and sustainable than before.
Importantly, operational measures for water efficiency require low investment, and technology projects can be delivered by rural and regional businesses. They don’t require significant lead times and are the types of programs that can be mobilised very quickly.
Rather than attempting to re-establish the same type of jobs and infrastructure, perhaps this is an opportune time to look at where new and different jobs could be created in those sectors that will provide for a more sustainable future; creating green jobs for a greener economy. For example, we could prioritise the development of waste to resource or waste to energy projects and look at how they can fast-track a transition towards sustainability.
In fact, we can make our economy and our environment more resilient by moving towards a circular economy where the water sector can play a significant role in eliminating waste and reusing resources.
Circular systems employ reuse, sharing, repair, refurbishment, remanufacturing and recycling to create a close-loop system, minimising the use of resource inputs such as water and the creation of waste, pollution and carbon emissions. The circular economy enables the value of water and infrastructure to be identified, captured and realised. An industrial-symbiosis example is where heat in process water or high strength organics in sewage water are captured and resulting energy is on-sold to another industry.
Another example is to take reusable minerals within contaminated soils and put them back into productive use. It is these types of industries, which promote circularity in the economy, that we should try and encourage through stimulus – taking waste and turning it into a resource. Integrated value chains and good program management can achieve this today.
Recycling water for agriculture has been around for millennia, but as the world faces depleted phosphate stocks, reusing the nutrients in wastewater and biosolids could be a solution. With an emphasis on reducing carbon footprint, growing food, fibre and bio-fuel close to the demand centres would create shared benefits of resource security and sustainability.
Whatever our economic future looks like through and after COVID-19, it must have sustainability as its foundation.
This thinking paper is part of a collection of insights and expertise from Aurecon as it explores leading through and beyond the COVID-19 disruption. Explore our insights here.
Abel Immaraj, Aurecon’s Water Resource Systems Leader, engages on our biggest water challenges to lead the conversation and in partnership with clients and the community, build a more liveable world. His diverse experience covers national, state and local level water management (regional and metro); urban water and wastewater services, natural resource management and environmental flows; institutional, market and structural reforms; and the creation of built and natural assets, asset management planning (O&M, disposal/ transfer decommissioning). As a trusted advisor to governments, companies and the community, Abel has advised on strategy and policy, program formulation and implementation plans, at project, program and portfolio level.
Colm Molloy is Aurecon’s Natural Resources Leader, leading a team creating and enhancing green infrastructure, water sensitive cities, brownfield precinct transformation and harnessing enduring natural resources. He brings values based thinking and technical expertise together to sustain and enhance land and water assets for the benefit of clients and communities. He has worked across natural resources for 27 years in Australia, Europe, Africa and Asia, leading water resource advisory, land capability, remediation strategy and program execution.
Kevin Werksman is Aurecon’s Water Leader, overseeing a team that is building and delivering water smart and water sensitive cities strategies across the region. Kevin has worked in the water industry for 20 years in Australia, Hong Kong, China, Japan, Korea and South East Asia. His role covers a wide scope of challenges and services in the rapidly evolving industry, including water security, and resilient and water smart cities and regions.
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