Falls dam, whether it is maintaining the current dam or building a new one, goes to the heart of how we in Central Otago see the relationship between our economy and our environment. It also goes to the heart of the vision we have for what Central should look like for future generations.
For most of us, that vision includes preserving our unique landscape and the health of our rivers. It also includes maintaining a robust economy.
How can we keep the economy going while protecting and enhancing our natural environment that makes Central such a special place to live?
Our Council’s recently published work on the District Vision Project has made it clear that the people of Central value our natural environment for the benefits it provides, not just to look at but also to recreate in. These activities include mountain biking in our hills and mountains and kayaking in our rivers. It is what Central has increasingly become known for.
How can these natural environmental qualities that people value contribute to maintaining a robust economy?
The answer is that people like to live in places that provide a good quality of life and that generate money and jobs.
Look at the growth of Queenstown. People also enjoy visiting places with similar qualities, doing what the locals do in their own backyards. Make it a great place to live and people will come, both to live and to visit.
Second, one of the basic principles of commodity economics and trade is that countries and regions focus on economic activities that suit their natural environment and resources, such as climate, soil, minerals, topography, location, etc. and trade in these to maximize net benefit.
In Central the main physical characteristics are an extremely hot/cold climate, little rainfall, many hours of sunshine, good soil types here and there, some gold reserves and a large area of modified but largely intact natural landscape that is valued by people for a variety of reasons.
So how do we as a district maximize the value of these resources in this environment? There will be inevitable trade-offs between environmental quality and economic returns: the rational goal, however, would be to get the best possible return from our environment at the least cost to our environment and our economy.
So back to the water issue. Water is a scarce resource in Central and people appreciate the benefits that healthy rivers and streams provide for drinking, recreation and aesthetic value.
The aim is to make optimal use of the available water for the entire community.
Does it make economic sense for the Central Otago community to spend over $40 million on expanding water storage in the upper Manuherikia River?
First, I want to point out that we are not currently making the most of our scarce water resources with the storage that we have. In many cases, current land use cannot afford to maintain the infrastructure that supports irrigation, let alone an extensive storage dam.
Furthermore, we do not have a legal framework that allows us to transfer water to landowners who can benefit from it the most.
Water rights are allocated on a first-come, first-served basis and are tied to the land and therefore the land use of the current landowner. Water rights that allow for the extraction of large quantities of water are therefore locked in for use by predominantly pastoral agriculture in one form or another, effectively locking out latecomers who can make better use of the water at lower environmental costs.
The justification used for spending ratepayers and taxpayers’ money on increasing water storage for environmental flows in the Manuherikia is a fallacy. The natural mean annual low flow at Alexandra is estimated at 4cumecs, while the initial minimum flow proposed for the river is currently 0.9cumecs.
The threat to the healthy ecological function of the river comes firstly from water abstraction, mainly for irrigation, and secondly from increased sediment and nutrient discharge as a result of more intensive land use due to irrigation.
For the taxpayer or ratepayer to subsidize addressing the environmental impacts of irrigation by adding more storage is to help double down on the flawed model that is causing the problem. The flawed model is to build an irrigation infrastructure that was originally built with taxpayer dollars, which has facilitated a land use that cannot afford to maintain the assets it has, let alone expand storage capacity.
What they are trying to do is to use irrigation to create a land use that is also found in other parts of the country where there is a lot of rain.
And then there are the environmental costs that will inevitably result from increased water storage in the Manuherikia. Most of the underutilized water rights are held by pastoral farmers. Irrigating land triples or quadruples its value, providing a clear incentive to expand the irrigated area.
There is nothing in the current legal framework that prevents landowners with surplus water from expanding the area of land irrigated and/or increasing the intensity.
Water quality monitoring of the Manuherikia has clearly shown a decline in water quality over the past decade, which is associated with increased land use intensity through irrigation. Progress is being made on farms to address water quality issues, but some issues, such as nitrate fertilization of the aquifer, cannot be addressed without land use change.
Until these issues are addressed and we have a system that makes optimal use of the available water, we should not support the expansion of water storage in the main Manuherikia branch.
■ Phil Murray is chairman of the Central Otago Environmental Society.