ABSTRACT
ABSTRACT: Australian climate is characterized by extremes including longer and more severe droughts than is experienced on other continents. Most recently, the Australian Murray-Darling Basin experienced the most severe drought on climate record, now known as the “Millennium Drought” (1997-2009). While damage costs experienced by agriculture, the environment and municipal industrial water consumers ran into the billions, absent significant water policy reforms that occurred prior to the drought, costs would have been much higher. This chapter provides an overview of meteorological and hydrological drought dimension, and reviews post drought damage cost estimates. The characteristics of innovative policy that was in place to reduce impacts, especially provisions allowing for market water transfers, are reviewed and estimates of how these policies reduced drought damage costs are discussed. The chapter concludes with discussion of key lessons from the Millennium Drought experience relevant to future drought preparedness policy applicable in Australia, Europe and beyond.
