SYDNEY, 6 June 2006 - The price of water in Australia could rise dramatically as demand outstrips supply, according to new research by Australia's science agency, the CSIRO and Melbourne's Monash University.

In their report, Without Water: The economics of supplying water to 5 million more Australians, the researchers examined a series of scenarios for how Australian cities could cope with the likely rise in demand for water.

"Our report aims to inform people and industries of the costs they are likely to pay and ways in which theses costs can be significantly reduced. It is critically important that all Australians understand the future water supply implications of both climate change and enhancing environmental flows," said lead author, Mike Young.

Australia is expected to have an extra five million people living mostly in major cities by 2032 which, coupled with a possible reduction in water supply, would place growing pressure on demand.

If governments had not acted to expand water trading and access "new" sources of water by building desalination plants, establishing large sewage recycling schemes and making use of stormwater the study suggests that in our worst affected city, Perth, the price of water would need to increase by about 10 times to manage demand, the authors said.

The research team analysed four alternative future paths, based on Australian Bureau of Statistics projections that by 2032 Australia's population will have risen to 25 million. They coupled this with Access Economics predictions for the Australian economy and a reduction of the stock of water available for use by 15 per cent.

"Today's planners are faced with some important policy choices," Young said.

"If Australia stops improving water infrastructure and policy, it's clear that the real price of water will become a major issue over the next quarter century - but by how much, and where, depends on decisions we have to make today."

Copies of the report can be downloaded from the CSIRO.

COSMOS magazine's cover story this month concerns the water crisis facing Australia.