Australian economy under threat as climate change bites

The economic risks presented by climate change have been further highlighted with the publication by the Australian government of a new report showing that drought was threatening the water supply of more than a million Australians.

A six-year drought across the country has left its main water system – the Murray-Darling river system, which stretches across four states from southern Queensland to Victoria – severely depleted.

Speaking at the release of the report, Australia's climate change minister Penny Wong warned that unless measures were taken to save the river system, the country's drinking and agriculture supplies would dry up.

"Work is continuing on contingency planning in order to protect critical human needs for 2009/10 should inflows remain at or below record minimums through winter," the report said. "Governments would also need to consider how they would set aside water early to protect critical human needs for 2009/10."

The Murray-Darling Basin is the lifeblood of the Australian economy and society, sustaining 40 per cent of the nation’s food and irrigating 70 per cent of the land.

Last year the Australian government announced that the river system was facing an "unprecedentedly dangerous" water shortage, and stepped up efforts to impose tighter water restrictions.

Former prime minister John Howard said at the time that the situation was so grim that he may have to cut off water to farms.

The country's political leaders have in the past couple of months agreed on a $10bn rescue plan for the Murray-Darling, which would pump 100bn litres of water a year, sourced from farming irrigation channels, into the ailing river system.