Australian Urban Water Sector Research Articles

Benchmarking service quality in the urban water industry

Providing secure and affordable drinking water and sewerage services is the primary mandate of the urban water industry. Water businesses must balance their service obligations and the quality of service delivered in order to maximize customer value. Being a monopoly industry, the urban water sector’s service levels and associated prices are not driven by competitive market pressures but through the regulatory processes. However, improving service quality often comes at a cost and yardstick regulation requires the evaluation and benchmarking of service quality within an economic efficiency framework. This paper uses a bootstrap Data Envelopment Analysis model to evaluate the service quality performance of the Australian urban water sector from 2009–2010 to 2015–2016. Specifically, the paper models the lack of service quality as undesirable outputs of water production. It estimates the Malmquist-Luenberger productivity index and its efficiency change and technical change components for 50 integrated water and sewerage utilities in Australia. Findings indicate that, overall, the sector’s quality-adjusted productivity has improved after a marked decline in 2010/2011. A comparison of the service quality productivity results with the conventional productivity measure revealed that the conventional analysis tends to underestimate the productivity growth. The paper concludes that benchmarking service quality helps the urban water sector to move from compliance-based regulation to best-practice regulation.

Pathways of system transformation: Strategic agency to support regime change

There is a well-recognised need to transform existing systems of production and consumption towards a more sustainable orientation. However, there is much uncertainty about how to achieve sustainability transitions in practice, and what transition advocates and actors can do to catalyse and steer regime transformation. We therefore need evidence of how transitions are operationalised, in order to better understand the on-ground dynamics of regime change. To address this gap, this research paper examines three contemporary cases of transformational change in the Australian urban water sector and the dominant strategic approach to change adopted in each city. It focuses on the strategic behaviour of actors, in particular examining how agents navigate and respond to the opportunities and constraints of their context, and what initiatives (or combination thereof) can facilitate innovation diffusion and regime transformation. The results reveal three distinct patterns of change, each of which favour particular strategic interventions by transition proponents.In order to incubate transformational change, the results suggest that actors may be best served by initially employing strategies that are immediately compatible with their existing context. However, examination of the strengths and weaknesses of each pattern confirm that no single strategic approach is in itself sufficient, and in order to embed a novel innovation and bring about regime change, actors will eventually need to broaden the range of interventions used. The results also reveal the possibility of a ‘pattern-dependence’ that actors need to deliberately work to overcome in order to fully mainstream the desired change. These findings therefore provide insight into the links between regime transformation, patterns of change and actor strategies while also offering practical guidance that can be used to inform the design and implementation of regime transformation agendas and programs.

The interplay of institutions, actors and technologies in socio-technical systems — An analysis of transformations in the Australian urban water sector

Literature on socio-technical transitions has primarily emphasized the co-determination of institutions and technologies. In this paper, we want to focus on how actors play a mediating role between these two pillars of a socio-technical system. By introducing the theoretical concept of institutional work, we contribute to the conceptualization and empirical assessment of agency processes in socio-technical systems. We illustrate this approach by analyzing recent developments in the Australian urban water sector, where seawater desalination technology has experienced an unexpected, but rapid diffusion to all major cities, often interpreted as a reaction to a major multi-year drought. However, the drought broke and left all but one plant unused. This has led many commentators wonder how such a massive investment – which is likely to limit alternative development trajectories in the sector for the coming decades – could have happened so quickly and why other, potentially more sustainable technologies, have not been able to use the momentum of the crisis to break through. A comparative analysis between seawater desalination and its main rival wastewater recycling in regard to processes of institutional work provides valuable insight into how technology, actors and institutions mutually shaped each other.

Measuring environmentally sensitive productivity growth: An application to the urban water sector

The energy use and greenhouse gas emissions in the provision of urban water and sewerage services have become an increasingly important issue in recent times. However, the impact of negative externalities such as greenhouse gas emissions on the productivity of urban water provision has received less attention in the literature. This paper applies the global Malmquist–Luenberger (GML) productivity index, which accounts for undesirable outputs in order to evaluate the productivity trends in the Australian urban water sector. Results indicate that the inclusion of greenhouse gas emissions significantly influences the productivity measurement. Findings also indicate that the conventional index, which disregards undesirable outputs, over-states the productivity growth. Despite a declining trend in greenhouse emissions over the period, the overall productivity trend of the urban water sector experienced a downward trend while accounting for bad output. This productivity decline occurs in a period of prolonged drought, water security concerns and increased reliance on desalinization and water recycling.

Urban water reform in Australia: lessons from 2003–2013

Extreme rainfall variability, record droughts, floods and high temperatures have had a major impact on social wellbeing, economic productivity and environmental functionality of urban settings in Australia. Compounded by urban growth and ageing water and wastewater infrastructure, Australia's urban water arrangements have undergone major reforms to effectively manage the challenges of recent years. This paper is a synthesis of urban water reform in Australia during a decade of unforeseen natural extremes. It summarises the evolution of urban water policy, outcomes from recent government reforms and investment, and presents future challenges facing the sector. As governments at state and federal levels in Australia have moved to diversify supply options away from the traditional reliance on rainfall-dependent catchment storages, they have been confronted by issues relating to climate uncertainty, planning, regulation, pricing, institutional reforms, and community demands for sustainable supply solutions. Increases in water prices to pay for new water infrastructure are illustrative of further reform pressures in the urban water sector. In the past 10 years the Australian urban water sector has weathered new extremes in drought and flood and emerged far different to its predecessor. The provision of safe, secure, efficient and sustainable water and wastewater services remains the primary driver for urban water reform. However the challenges and opportunities to improve nationally significant social, economic and environmental outcomes from urban water have evolved considerably. The focus now is on creating the institutional, regulatory and market conditions favourable for the integration of urban water services with the objectives for productive and liveable cities.

The structuration of socio-technical regimes—Conceptual foundations from institutional theory

In recent years, socio-technical transitions literature has gained importance in addressing long-term, transformative change in various industries. In order to account for the inertia and path-dependency experienced in these sectors, the concept of the socio-technical regime has been formulated. Socio-technical regimes denote the paradigmatic core of a sector, which results from the co-evolution of institutions and technologies over time. Despite its widespread acceptance, the regime concept has repeatedly been criticized for lacking a clear operationalization. As a consequence, empirical applications tend to depict regimes as too ‘monolithic’ and ‘homogenous’, not adequately considering persistent institutional tensions and contradictions. These are however crucial for assessing transition dynamics. In this paper, we revisit two concepts from institutional theory that enable an explicit identification of socio-technical regimes and more generally a specification of the ‘semi-coherence’ of socio-technical systems. First, we will show that ‘levels of structuration’ can be conceptualized as degrees of institutionalization, thereby treating institutionalization as a variable with different effects on actors, the stability of the system and thus the potential for change. Secondly, we draw on the institutional logics approach to characterize the content of various structural elements present in a system and to trace conflicts and contradictions between them. We illustrate this approach with an empirical in-depth analysis of the transformation of the Australian urban water sector since the 1970ies.

A design framework for creating social learning situations

Learning nurtured through experimentation is very important for enabling sustainability transitions. Over the last decade, different strands of research have investigated social learning and its associated processes to better understand learning efforts aimed at socio-technical system change. While some necessary process considerations to enable social learning have been established, actual design and organisation of experiments that aim to create a social learning situation remain largely unexplored. Against this background, this paper presents an empirical, mixed-method study that investigated a governance experiment within the Australian urban water sector. This experiment enabled widespread learning, resulting in socio-technical system change. The research reveals that social learning in particular is more complex in reality than in theory and that not all system stakeholders need to learn the same to achieve system change. Further, this paper develops a framework that outlines enabling starting conditions and features for designing and organising social learning situations. The framework comprises focus projects, multi-organisational peer groups, distributed facilitation, adaptability and flexibility, time and science/research. The key findings provide practical strategies for designing and operationalising policy and governance reform agendas that embrace learning situations.

A short institutional and regulatory history of the Australian urban water sector

This paper provides a synopsis of the current regulatory and institutional arrangements that pertain to the urban water and wastewater sector in Australia. A short and selected institutional history of the urban water sectors in the Australian cities of Sydney and Melbourne is outlined, followed by an analysis of the relative effectiveness of the institutional structures in enabling the sector to respond to the challenges faced by the sector in the future.

Governance experimentation and factors of success in socio-technical transitions in the urban water sector

The necessity of a shift towards more sustainable urban water management practice is widely acknowledged and advocated. Experimentation that enables social learning is regarded of high importance for realising such a change. For instance, literature on Transition Management suggests that governance, as opposed to purely technical, experimentation is considered a critical factor in achieving a socio-technical transition. When analysing the water sector it becomes clear that modern urban water systems have almost exclusively focused upon technological experimentation with little attention directed towards the importance of governance experimentation for social learning. Empirically little is known neither on how governance experimentation actually unfolds nor about its effectiveness for socio-technical transitions. This research paper presents a critical analysis of a unique process of governance experimentation within the Australian urban water sector which generated sufficient social–political capital to change an established water governance framework. Conclusions of this research reveal some theoretically conjectured processes, like deepening, broadening and scaling-up, are found in this contemporary, real-life example. Furthermore, factors which influenced the success of this governance experimentation process are revealed and the role of various forms of learning therein is described.

Rethinking urban water management: Experimentation as a way forward?

There is widespread acceptance regarding the need to transition towards more sustainable urban water practices. Supporting such a transition requires new governance frameworks that can accommodate complexity and uncertainty, and organisational cultures that embrace experimentation and learning. This empirically focused research paper examines how eleven, alternative local-scale experiments were initiated while operating in an unsympathetic regime. Furthermore, the perceptions of more than 150 urban water practitioners across Australia are presented, regarding the importance of and difficulty in undertaking experimentation in the urban water sector, and the necessary mechanisms for influencing a step change to sustainable urban water management practices. Interviewees revealed perceived limitations in experimenting with new technologies and practices when operating within a hierarchical and market-based governance paradigm. Also, industry conservatism and the dominant risk-based management approach both operate as significant constraints to promoting an experimentation culture, and are closely related to concerns about public health and financial implications. Overall, the research highlights the Australian urban water sector is willing to embrace learning-by-doing; however, a stronger emphasis on promoting an organisational and industry-wide culture of experimentation and learning is required. Policy implications for future water governance are discussed.