THE RELIABILITY and variability in economic forecasting has been described as ‘making Astrology look good’. In this article I hope to use some simple estimating methods, like multiplication, in an attempt to define some implications of federal policy. In this way, we can assess the quality of their decision making.
It has been reported that the federal government, with support from the liberal opposition, has now passed laws to establish a 39 million hectare tree plantation estate around Australia starting in 2013 or so (1).
This is a centrally inspired plan, Soviet in its totality, supported by the likes of ABARE, all of which is shaped by government departments with objectives of industry competitiveness. These departments have no commitment to a wider public good, or to support communities, or indeed to support taxpayers, not even Australia. The principle seems to be ‘what’s good for industry must be good for Australia’.
When government departments have objectives that do not include communities and taxpayers and that focus on industry, we cannot be surprised when the results harm communities. Their needs have been entirely left out of consideration.
With this in mind, let’s do a little estimating
We know that tree plantations use 2 - 4 Ml of water per hectare per year over and above agricultural cropping. All those young trees, planted at maximum density, all growing at the same rate stimulated by special fertilizers, need lots of water. Their roots can penetrate up to 15 m below the surface and trees are routinely known to lower water tables for that reason.
From the Australian Water Audit (2) we read
For 2004–05, the ABS Water Account estimates that rainfall volume across Australia was 2,789,424 GL, of which only 9% became runoff (242,779 GL).
In other words, about 243,000 Gl was available for human use. Then we read…
Most rainfall is lost to evaporation and transpiration (used by plants) and only about 1% percolates into aquifers to become groundwater. Of the runoff that does happen, about 70% is from rivers in the north, far from population centres.
So of that 243,000 Gl, 170,000 Gl was out of our normal reach leaving 73,000 Gl for our use and as environmental flows in rivers.
73,000 Gl available
The water available to us today is fully allocated, in fact is it over allocated and government is trying to buy back many of the irrigation licences that should never have been issued in the first place.
The agricultural industry was the main consumer of water in 2004-05 (12,191 GL, or 65% of total use), most being used for irrigation of crops and pastures. Households were the next biggest user, at 2,108 GL (11%). Manufacturing and other industries used a comparatively small volume of water (1,648 GL), as did the mining (413 GL) and forestry and fishing industries (51 GL).
Wait a minute! In 2004-5, forestry had established around 2 million ha of plantations around Australia. With each hectare using between 2 – 4 Ml of water per hectare per year, that would total up to 8,000 Gl of water! Where is that in the report?
The answer is – nowhere.
In other words, the plantation estate’s use of water is not reported by ABS, instead forestry is combined with fishing and reported as 51 Gl! They don’t pay for that water either.
We and our governments are therefore institutionally blind to the amount of water taken by tree plantations.
With this in mind, we can calculate the amount of water required by a 39 million ha plantation estate as up to 156,000 Gl of water per year.
How will we continue to get a 73,000 Gl available flow from our catchments if plantations are going to need over double that?
Presumably we won’t care because we won’t notice because we still won’t be measuring it!!
MIS companies charged around $7,000 or more per hectare to plant, manage and grow trees. Of that, about $3,200 came from taxpayers, the rest from credulous investors. The collapse of these schemes has crippled some of the companies involved (3) and led to massive share losses. In other words, even with investors and taxpayers giving these companies $7,000 per hectare, they couldn’t make a go of it.
If the 35 million hectare scheme were subsidised at the same rate of $7,000 per hectare, it would cost $245 billion.
But we already know that $7,000 isn’t enough, so the cost will certainly be higher, particularly as costs in the future are likely to increase in any case.
So here we are, committing to a program that will cost in excess of $245 billion over 40 years, and use over twice as much water as runs off in available catchments. All this despite the recent massive failures of tree MIS and a huge diminution of water available in our catchments.
Is this the ‘evidence based policy’ that Kevin Rudd promised?
Watch this space.
Mike is a complex systems consultant, change facilitator and executive and management coach.
Note. The author welcomes constructive comments and new information that adds to our understanding of these matters.
Wait a minute! In 2004-5, forestry had established around 2 million ha of plantations around Australia. With each hectare using between 2 – 4 Ml of water per hectare per year, that would total up to 8,000 Gl of water! Where is that in the report? The answer is – nowhere. In other words, the plantation estate’s use of water is not reported by ABS, instead forestry is combined with fishing and reported as 51 Gl! They don’t pay for that water either. We and our governments are therefore institutionally blind to the amount of water taken by tree plantations.