The debate over water security often suffers from short-term economic thinking that ignores long-term risk, climate change, and system resilience. The discussion around the Marsden Report and household water tanks is a clear example. While the report claims tanks are expensive and inefficient, a closer look shows these conclusions rely on flawed assumptions. In an increasingly arid climate, local water storage is not a luxury but an essential part of living sustainably.
The Marsden Report and Water Tanks
An example of short-term thinking in water policy can be seen in the Marsden Report’s comments on household water tanks. According to the report, domestic water tanks are an expensive way of collecting water and that it is far cheaper to rely on large-scale technologies such as reverse osmosis to purify seawater or treated sewage.
At first glance, this argument may appear logical. Large, centralised systems benefit from economies of scale, and when electricity prices are low, energy-intensive technologies can seem affordable. However, this type of analysis ignores several critical factors and leads to conclusions that are misleading, particularly when viewed through the lens of long-term sustainability and climate change.
Water Tanks and Cost Assumptions
The argument against water tanks rests on two basic assumptions. The first is that the cost of water collected in household tanks is extremely high. The second is that reverse osmosis provides a cheaper and more efficient alternative. Both assumptions are flawed.
The estimated cost of water from tanks in the Marsden Report is overstated by a large margin. When the cost of a typical household water tank is spread over its working life, often twenty years or more, the resulting cost per litre is significantly lower than suggested. In many cases, it is comparable to, or even lower than, the cost of centrally supplied drinking water.
Water tanks also deliver value beyond the simple cost per litre calculation. They reduce demand on central infrastructure, provide resilience during droughts and emergencies, and allow households to manage part of their own water needs. These benefits are rarely included in narrow economic assessments.
The Hidden Cost of Reverse Osmosis
The second major fallacy lies in the treatment of reverse osmosis. In the short term, and under conditions of cheap electricity, reverse osmosis can appear to be a cost-effective way of producing large volumes of water. However, this view ignores the long-term consequences.
Reverse osmosis is an energy-intensive process. As energy prices rise, and as pressure increases to reduce carbon emissions, the true cost of this technology becomes much higher. The report acknowledges that increased electricity use will raise carbon emissions but then assumes these emissions can simply be offset through carbon trading.
This assumption shifts responsibility rather than addressing the underlying problem. It treats energy use and emissions as abstract quantities that can be balanced elsewhere, instead of recognising them as real constraints in a finite world.
The Fallacy of Composition
As an economist, Marsden should be familiar with what is known in economics as the “fallacy of composition.” This is the mistaken belief that what appears to be good for one individual or organisation will also be good when applied universally.
A classic example is someone standing up at a crowded concert to get a better view. It works for the individual, but if everyone stands, no one benefits. The same logic applies to large-scale reliance on energy-intensive water technologies.
While one city or one country might offset emissions through carbon trading, the global system cannot do this indefinitely. There is not enough land, forest, or biological capacity to absorb unlimited emissions generated by continued growth in energy use.
A more blunt description of this mindset is the “greed is good” approach. Doing what appears to be cheapest or most convenient in the short term, regardless of broader consequences, is precisely the behaviour that has driven climate change to its current dangerous state.
Limits of Carbon Trading
Carbon trading has provided some benefits, particularly to poorer countries that can earn income through reforestation and land restoration. However, it is not a limitless solution. The available land for carbon offsets is finite, and future demand for offsets is likely to far exceed supply.
Relying on carbon trading to justify ever-increasing energy use is a risky strategy. It delays necessary structural change and locks societies into high-energy systems that will become increasingly expensive and politically difficult to sustain.
This attitude of acting in self-interest without regard for global consequences is one of the major threats facing humanity. Climate change is not simply a technical problem; it is a systemic problem driven by collective behaviour.
Living in an Arid Climate
Australia is, and always has been, a dry continent. Living sustainably in an arid climate requires a different mindset from living in a wet one. Water tanks are not an indulgence or a lifestyle choice; they are a practical and necessary adaptation to environmental reality.
Local water storage reduces evaporation losses, captures rainfall where it falls, and increases resilience during drought. It also decentralises water management, reducing the vulnerability of communities to large-scale system failures.
In contrast, heavy reliance on centralised systems increases fragility. When these systems fail, whether through drought, power shortages, or infrastructure breakdown, the consequences are widespread and severe.
Beyond Short-Term Economics
The core problem with the Marsden Report’s position is not the use of economic analysis itself, but the narrow time horizon applied. Short-term cost comparisons fail to capture long-term risk, environmental impact, and system resilience.
Sustainable water policy must consider energy availability, carbon emissions, climate uncertainty, and social resilience. When these factors are included, the value of household water tanks becomes clear.
Water tanks are not expensive mistakes. They are an indispensable part of adapting to a dry and uncertain future. Treating them as optional extras rather than essential infrastructure reflects a deeper failure to understand what sustainability truly means.
Colin Austin — © Creative Commons. Reproduction permitted for private use with source acknowledgment; commercial use requires a license.
