Aither: Bringing Australia’s Water Management Expertise to Users Worldwide

THE INNOVATORS

Aither: Bringing Australia’s Water Management Expertise to Users Worldwide

A water depth marker in the dry lake bed of Lake Albert in New South Wales in 2010.

The Millennium Drought of the early 2000s in Australia led to fundamental reforms in water management in the country, including the establishment of a National Water Commission and the expansion of water markets. Water markets allow users to buy and sell water rights at market-determined prices, which helps to balance consumptive and environmental demand and to reveal the value that different users place on water. In 2012, the consultancy Aither was founded to provide water resources– related economics, policy, and management advice informed by the Australian experience. Aither has plans to expand operations to the United States in the near future. In this interview, Will Fargher, a founding director of Aither, and Amy Syvrud, a senior consultant for the company, tell Irrigation Leader about Aither's history and services and how it shares the wisdom accumulated by Australia over the course of its water reform journey.

Irrigation Leader: Please tell us about your backgrounds and how you came to be in your current positions.

Amy Syvrud: I’m a U.S. citizen and grew up in San Diego, California. I did my undergraduate studies at the University of Virginia’s Batten School of Public Policy and Leadership. I then briefly worked for The Nature Conservancy’s Global Freshwater Strategies team in Virginia, led by Brian Richter. That experience launched my passion for and interest in water, particularly in water markets and the policies and regulatory environments that support effective water markets.

Australia is recognized as a leader in managing water resources and is known for having the most active and sophisticated water markets in the world. I wanted to gain firsthand knowledge of Australia’s approach to water management and to identify lessons that could be applied in the United States. So, when I received a scholarship to complete a master’s degree in integrated water management at the International WaterCentre in Brisbane, I packed my bags and headed out west (far, far west).

I met Will Fargher at the World Water Congress in 2016 and have had the good fortune to work for Aither ever since. Aither is unique in that it brings together economists, strategists, and policy practitioners with a deep understanding and appreciation of the value of water. Our team has been involved in the journey of Australia’s water reform experience, and I have learned a lot through working with it over the past 4 years. I am now fortunate to be returning home to the United States to help bring Aither’s services there and to help U.S. water users make better decisions about the way we manage our water resources.

Will Fargher: I grew up on a farm in New South Wales, Australia. I learned the value of water young, as you do when you’re surrounded by dust and hoping for rain. I studied economics and geography at university, pursuing both fields through the lens of agriculture and water. After university, I worked for the government of the State of Victoria in water policy and management at a time when the state was undertaking significant water reforms.

In 2004, all the Australian governments agreed on a national blueprint for water reform, the National Water Initiative. A National Water Commission was established in Canberra to drive the implementation of commitments made under that agreement. I joined the commission soon after its establishment and stayed for the next 7 years, the last 3 as the general manager, in which position I was responsible for urban and rural water policy. I left the commission in 2012 to start Aither and have been one of the company’s directors ever since. I’m still based in Canberra but work across Australia as well as internationally.

Irrigation Leader: Do you credit growing up on a farm with your interest in water?

Will Fargher: It certainly instilled in me a fundamental sense of the value and importance of water for production, communities, and the environment. I’m passionate about agriculture and the environment and about our ability to improve the management of scarce water resources. We often talk about win-lose outcomes: who gets water and who doesn’t; which crops are grown and which aren’t; and which industries or regions are going to be sustained at the expense of others or of the environment. I fundamentally don’t believe it needs to be win-lose. It can be win-win. But we need to be smart.

Irrigation Leader: What services does Aither provide and in which business sectors?

Will Fargher: Aither’s purpose is to help governments and businesses make better decisions about globally significant issues. Combining economics, policy, strategy, and performance, we focus on four key sectors: water policy and management, water utilities and infrastructure, water markets, and resilience and adaptation. Across those sectors, we work with leaders in government and business in different countries, navigating complexity by providing decisionmakers with clear, evidence-based analysis, insights, and advice.

Irrigation Leader: Would you tell us more about Aither’s work with water markets?

Will Fargher: The members of Aither’s water markets team are Australia’s leading water market advisors. We’re fortunate to have had end-to-end experience in establishing and then navigating water market rules and regulations in the world’s leading water market. Whether it’s undertaking assessments of the feasibility of establishing new markets or applying leading modelling and analytical tools to help clients form cost-effective and risk-based portfolio management strategies, Aither helps government and private clients understand water market dynamics and make decisions with confidence.

It’s worth noting that all this has come together pretty quickly in the scheme of things. Twenty years ago, I wrote my university thesis on the potential for the water markets that were then emerging to balance tradeoffs between consumptive and environmental demand in the Murray Darling basin. Fifteen years ago, the National Water Commission was working to help Australia’s states develop the institutional and administrative architecture to enable interstate water trade. Today, that market has a capital value of about A$26.3 billion (US$18.7 billion) in major entitlements and an entitlement turnover of approximately A$1 billion (US$711 million) a year.

The Australian Competition and Consumer Commission (ACCC) is currently undertaking a water market inquiry, and its interim report emphasizes the benefits of water markets for Australia’s economy, communities, and individual irrigators. Despite this, implementation has been challenging at times, and the ACCC has pointed out a range of regulatory and governance issues that still need to be addressed. Issues notwithstanding, our work indicates that there are big opportunities for water markets globally, and there is certainly a growing interest from overseas.

Irrigation Leader: How do you approach developing a water market in another country that has vastly different water rights or laws?

Will Fargher: Over the course of the last 10 years, we’ve worked in 15 different countries and had conversations with organizations in twice that number of countries. A question that invariably arises is how others might establish water markets like those in Australia. We’re cautious when we respond, because water policy and management is context specific. Each jurisdiction has its own legislation, practices, cultures, and norms, and there is no one-size-fits-all solution.

However, stepping back from the specifics of Australia’s arrangements, there are lessons from our experience that touch on fundamental elements of improved water management and that might help other countries. Water markets are a powerful tool, but some essential water management infrastructure must to be in place before they are established to ensure the benefits of trade and safeguard against negative consequences. These essentials include a good understanding of the water resource, good water planning, a good means by which to allocate resources, and a legal framework that can ensure that those allocations or entitlements are enforced. A system of accounting for water consumption—metering, monitoring, and reporting—also needs to be in place. If you can get those essentials in place and there is competition for water or demand for reallocation between users, then a water market can be effective under the right conditions.

A drought-affected paddock in North Wagga, New South Wales, in 2008.

Amy Syvrud: Notably, the essentials needed for markets to function effectively are the same arrangements that are required for improved water management in general. In other words, work on these essentials can be pursued on a no-regrets basis, with the expectation that they will help improve water management regardless of whether a water market is ultimately created or not. That was the conclusion of my master’s thesis, in which I explored water market feasibility in agricultural regions outside Australia. Investing in clearly defining water rights; improving systems for monitoring, accounting, and reporting on water availability and use; and establishing sound governance and regulation will provide tangible benefits in all cases.

Irrigation Leader: Would you tell us about Aither’s plans to expand its operations to the United States?

Will Fargher: While it’s increasingly in vogue to refer to yourself as being purpose driven, purpose is core to the Aither business, and it drives our team. We are an accredited Benefit Corporation, which reflects our commitment to delivering positive change through the work that we do. Certified Benefit Corporations meet the highest standards of verified social and environmental performance, public transparency, and legal accountability. For us, this is as simple as balancing purpose and profit. We are a for-profit firm, but we operate in a way that benefits the communities and environments in which we work and live. We see better decisions as something that will generate enormous benefits and avoid costly and irreversible mistakes.

Now, if we’re true to all that, how do we increase our impact? We do so through growth, and there’s no better place to grow than the United States. There are clear parallels between the challenges being faced and the outcomes being sought in Australia and the United States. In both places, water resources are highly valued for their contribution to agriculture, are necessary to sustain cities and towns, and are the cornerstone of globally significant river and riverine ecosystems. We’re currently working with a number of North American clients with a presence in Australia, we’re seeing increased interest in the Australian experience from the United States, and we’re keen to meet the market in this regard.

Amy Syvrud: This brings us back to the question I was asking myself prior to my arrival in the land down under: Are Australia’s water management lessons and experience applicable to the U.S. context? The answer is yes; its lessons are very much applicable. As Will said, there are clear parallels between the challenges faced and outcomes sought in the two countries. The real challenge, however, is in understanding how to apply those lessons effectively. That’s what we’ll be focused on as we engage with those who are working in this space in the United States. We’ve had the privilege of applying Australia’s lessons in other countries around the world, and we are excited at the prospect of making a contribution in the United States.

Irrigation Leader: Where will you be establishing an office?

Amy Syvrud: From October 2020 onward, I’ll be based in Virginia, near Washington, DC. Our current international work has seen us collaborate with the World Bank and other Washington-based institutions, so we’ll be taking the opportunity to connect with them and with federal government departments. One aim will be to understand the water agenda of the federal administration come 2021. However, the long-term goal is to establish a presence in the western states, which is the most logical place for our work.

Irrigation Leader: What should every water manager in the United States know about Aither?

Will Fargher: Better decisionmaking is critical for improved outcomes, and we bring a strong analytical approach to delivering the information required to make better decisions. For agricultural producers and investors, that might mean looking to understand the value of water in production and in the market and deciding how they can set up a portfolio approach that delivers increased security and returns over time. For a water utility that is thinking about the value of water to cities, towns, and irrigation areas and asking how to provide a certain level of security and supply to its customers and users, that might mean work on economic evaluation, pricing, economic regulation, funding and financing, and optimizing decisions.

These decisions need to be underpinned by sound advice that improves a producer's or an agency's information base, their understanding of the suite of options, and their ability to consider and communicate those options and their preferred outcomes. That’s the space that we work in, from analysis and insights to higher-level engagement and advice. We bring together policy, strategy, economics, and performance and offer multidisciplinary, collaborative, and evidence-based approaches and tools to support our clients—many of whom we hope will be in the United States as we go forward.

Will Fargher is a founding director of Aither. He can be contacted at will.fargher@aither.com.au.

Amy Syvrud is a senior consultant at Aither. She can be contacted at amy.syvrud@aither.com.au.