Aim of the research: • Learnings of system harmonization in Western Sydney • Requirements to succeed in trans-disciplinary engaged research • "if you were designing system harmonization again, based on the WISER experience what would you do to ensure that it worked?"

Our research in Western Sydney (Technical Report No. 08/08) identified the need for greater innovation in water use by moving from a substantially regulatory system to a more market driven system which expands the range of water related services that can achieve economic value through an environmental services market concept. The need for such a market approach reflects the current political economy of Natural Resource Management (NRM) decision making in peri-urban Australia, which results in continued resource depletion and degradation; institutional barriers to innovative solutions; and high transaction costs in affecting change. An environmental market driven system would ideally shift decision making from the political economy to a market economy and result in a lessening of transaction costs and facilitate greater innovation. For such a market to exist requires firstly the environmental goods and services (or commodities) clearly identified; and secondly the required market structure to enable trade. Martin et al. (2007) proposed an environmental business model for providing the groundwork for an environmental market structure to enable trading. What is missing to complement this market structure is a consistent methodology and classification system to identify ecosystem services as viable commodities. This technical report provides a conceptual framework for identifying and valuing ecosystem services in peri-urban Australia using South Creek sub-catchment in Western Sydney as a case study.

Most irrigation in Australia was instigated with regional socio-economic development as a primary goal. The irrigation schemes were developed with grand visions of settling the interior and providing farming opportunities to soldiers returning from world wars. Thus it could be said that the master planners in government had a fledgling version of the triple bottom line in their sights. These visions have partly been realised with evidence from the Murrumbidgee and Murray basins of significant inland populations associated with the irrigated districts and an annual revenue of $3.1 billion associated with an investment into irrigation infrastructure valued at about $10 billion (Meyer 2005). ... Irrigation development induces considerable environmental change, but the expectation has been in the past that the economic and social benefits would be greater than the environmental costs. However, public attitudes have changed over time, from enthusiasm for development and exploitation to greater concern regarding environmental issues and sustainability. Recently, the irrigation industry has found it difficult to communicate to the wider populace and government the benefits of irrigation to their regions and to explain the activities and investment undertaken to tackle the environmental sustainability concerns. To rectify this, irrigation water supply businesses are investigating using a reporting structure that includes financial, environmental, and social and cultural elements. This triple bottom line, holistic approach is intended to provide a more balanced view of water use, with socio-economic benefits and environmental consequences demonstrated. It is anticipated that this approach will lead to a more transparent and informed debate on the sustainable use of resources between all parties. This chapter will provide an overview the story of irrigation in the Murray and Murrumbidgee basins, their current environmental and socio-economic conditions and the context for sustainability performance reporting by irrigation water suppliers. Two case studies of irrigation company performance reporting will be presented. The concept of sustainability introduces expectations of a social licence as practical concerns for irrigation water supply businesses. These concerns about demonstrating responsible performance go beyond the legal reporting requirements for annual financial and environmental compliance reporting.