Unit 1
Unit 2
Environmental Markets
The Demand for Water
We all demand water just so that we can survive. However, there is a lot more to it than that!
Water is used by households and businesses. In particular, farmers need a significant amount of water to ensure that their crops will grow. If they do not get access to enough water, then the overall yield of arable land will be lower. This means that we will have less food to eat, and therefore prices will increase. Finding a balance between the demands of farmers, other businesses and households can be extremely difficult.
Although the Australian government has established the National Water Commission, most of the decisions in regards to the management of water are made at a state level. This means that the laws in Queensland (for example) will not be exactly the same as the laws in Victoria. The government of Western Australia decided to set up a desalination plant a long time before the government of Victoria made the same decision. On the other hand, when the Victorian government was advertising that we should try to keep our usage to 155 litres per person, per day, the state government in Queensland was using similar advertisements to suggest that people could live comfortably on 140 litres per person per day. (As a result of this campaign, people in south east Queensland were able to limit their water use to just 129 litres per person each day, while people in Melbourne only just managed to sneak below 155 litres per person per day.)
In other words, demand for water is managed through the policies that have been put in place by the government, and those decisions are not uniform throughout Australia. The most obvious policy in regards to the demand for water is the use of water restrictions. Victoria operates with a range of “stages” in regards to water restrictions. Each stage is supposed to be put in place based on water storage levels reaching a certain point. Recognising that this was causing some uncertainty in the business community, the Brumby government took the unusual step of introducing “Stage 3A” water restrictions, and then promising that these restrictions would stay in place for an extended period of time.
Demand is also managed through educating the public about how much water different appliances actually use. If your family has purchased a washing machine or a dishwasher since 2006, you will notice that there is a prominent sticker on the front of the machine. This sticker is there to tell you exactly how many litres of water your machine uses each time you use it, and how this compares to other machines. Well informed consumers tend to make better decisions. As people have become aware of the scarcity of water, the demand for appliances that use less water has increased. When more and more people use water efficient appliances, then the overall demand for water will be lower.
This policy was put in place in 2005, and it is known as the Water Efficiency Labelling Scheme. The labels that you see are the most visible part of the legislation, but it is also true that new minimum standards have been put in place. Given the structure of the water market in Australia, it was necessary for all of the state governments to follow the actions of the federal government, and implement comparable legislation. This legislation was all part of the broader National Water Initiative. This will be discussed in more detail on page 8 of this section.
 | Current Page: Demand Factors
|  |
