In the Aither Water Markets Report 2016-17, we identified that $0 water allocation trades accounted for between 60 and 70 per cent of all reported allocation trades by volume in major southern Murray-Darling Basin trading zones. We use $0 trades as a proxy for related-party or environmental water trades, but it’s not a perfect measure.
Last week the Victorian Government uploaded a new water allocation trade dataset to the Victorian Water Register. This dataset is a game changer for market analysts, policy makers and market participants alike. For the first time in Australia, we now have timely access to information about whether individual Victorian water allocation trades involve environmental water holders, are commercial or related-party in nature and how these types of trades are driving the movement of water within and between connected water zones.
The Aither water markets team is still working through the full dataset, but we have developed some initial analysis as a follow up to the original $0 allocation trade analysis we provided in the Aither Water Markets Report 2016-17 – see figure below.
This updated analysis corroborates Aither’s original analysis in that between 60 and 70 per cent of all reported northern Victorian water allocation trades are either non-commercial or environmental in nature. However, this updated analysis provides an extra layer of transparency which is essential to understanding exactly how the market is being used by different participants. These insights wouldn’t be possible without this new dataset.
We commend the Victorian Government for this step. More analysis to come.