A number of opportunities exist for policy improvement regarding the efficiency of water-use for irrigation in New Zealand. An account of the technological advancements which have created opportunities for the creation of new policies is provided below.
Tradable Water Permits 
Tradable permits belong to the class of “New Environmental Policy Instruments” (NEPIs). Tradable water permits allow for the trading of water resource consents, or portions of it, to other water users through water markets. The creation of water markets through these tradable water permits has been demonstrated to increase the economic efficiency of water allocation and use.[1] In theory, those who use tradable water permits quickly realise that the water they have access to has a value to somebody else (an opportunity cost). As a result, they adapt their own farming and application systems in ways to optimise the use of their water.[2] The water user then accumulates excess unused water to trade with others. Assuming appropriate rules and transfer systems are established, a market opportunity is created, optimising the collective benefit.[3]
Opportunities exist for such a system in New Zealand. Even though there is provision for the trade and transfer of water permits under the RMA, this has seldom been used as there is no easy way for buyers and sellers to get in touch with each other. This has led to a situation whereby spare capacity from unused allocations has not been transferred or reallocated.[4] An exception to this trend, however, is Canterbury’s new Water Management Strategy, which seeks to introduce a brokering system, allowing inefficient use of water to be “bought out”, enhancing the transfer of water allocations between consent holders.[5] Additionally, a company called HydroTrader has been set up to enable the trading of water permits within the Canterbury Region.[6] An opportunity therefore exists for the facilitation of the establishment of a national water market in New Zealand.
Water-Efficient Irrigation Technology
Irrigation is one of the largest groups of consumptive water uses in New Zealand. Consequently, a range of technologies have been developed to reduce excess water use.
Micro-Irrigation (drip irrigation): 
Considered to be one of the most water-efficient irrigation methods, drip irrigation involves dripping water slowly and gradually into the soil from a network of small plastic pipes which are fitted with drip emitters.[7] Water is delivered directly to plant roots so that less water is wasted and plants receive just the adequate supply of water they need. Water is applied at rates that reduce runoff and deep percolation losses. While sprinkler systems are around 75-85% efficient, drip irrigation is at least 90% efficient.[8] Drip irrigation can also reduce disease problems related to high levels moisture.[9] Although both easy to install and design, installment is very expensive.
Rainwater tanks: 
Rainwater tanks collect water that falls directly onto roofs. In a farming situation, the roofs of buildings and sheds can be used to collect water through a guttering system. The rainwater collected can be incorporated into a farm’s irrigation system. Using rainwater can, therefore, decrease the level of demand for groundwater or surface water for irrigation. Studies show that the use of rainwater tanks can reduce groundwater usage by up to 20%.[10] Additionally, rainwater tanks can reduce localised flooding, stream erosion, groundwater contamination, and stream and estuary sedimentation by reducing the amount of water directly landing on soil.[11]
Currently, the Australian Government provides rebates of up to $500 for the purchase of rainwater tanks.[12] In New Zealand, in the past, a number of councils have instituted subsidies for the construction of rainwater tanks. Between July 2008 and June 2009, the Waitakere City Council, for example, offered rebates of between $200 and $500 depending on the size of the rainwater tank for the purchase of rainwater tanks.[13] However, the provision of subsidies for rainwater tanks in New Zealand has been limited in number due to the limited fiscal resources of regional councils. The maximum number of rebates per year offered by the Waitakere City Council, for example, was 100.[14] The maximum number of rebates offered by the Rodney District Council is 20 per year.[15] Additionally, these rebates are generally only offered for domestic supply. As there has been little national effort towards more widespread subsidisation of rainwater tanks, an opportunity exists for the New Zealand Government to implement a rainwater tank subsidisation scheme for irrigation.
Green Labelling: Water Footprinting 
Green labelling or “eco-labelling” schemes enable consumers to make decisions about the products they buy based on whether they are environmentally friendly. This type of labelling identifies a certain product or service as less harmful to the environment than other similar products or services.[16] Green labels can cover a range of environmental attributes, including the amount of water used in the production of goods. Based on overseas experience, green labelling has been a driver for the increased uptake of environmentally sustainable products, influencing customer attitudes toward protecting the environment. Green labels also belong to the class of NEPIs and complement other policy instruments. Approximately 28 countries have now established national eco-labelling programmes.[17]
Green labelling can be used to display a product’s water footprint. A water footprint is an indicator of both direct and indirect water use of a consumer or producer. Water footprinting can therefore be used to determine the amount of water used in the production of a particular good or service. Water footprinting is fast becoming a global trend, with US retail giant Wal-Mart introducing plans for suppliers to report their water use.[18]
In New Zealand, more than 500 million cubic metres of water is estimated to be used in the production of agricultural exports.[19] A large amount of water also goes into New Zealand’s horticulture sector. As such, the Ministry of Agriculture and Forestry (MAF) and kiwifruit exporter Zespri have already begun studying the methodologies of water footprinting such as the one currently being developed by the International Organisation for Standardisation.[20] An opportunity therefore exists for New Zealand to unleash a major competitive advantage by getting in early, should the concept of water footprinting take global hold.
[1] Ministry of Agriculture and Forestry, “Tradable Water Permits,” http://www.maf.govt.nz/mafnet/publications/rmupdate/rm9/rmupdate02.htm (accessed October 7, 2009).
[2] Ibid.
[3] Ibid.
[4] Ministry for the Environment, “Water Programme of Action: Water Allocation and Use,” http://www.maf.govt.nz/mafnet/rural-nz/sustainable-resource-use/water-programme-of-action/water-allocation-use/water-allocation-use-jun04.pdf (accessed September 19, 2009).
[5] Canterbury Water, “Draft Canterbury Water Management Strategy,” http://www.canterburywater.org.nz/downloads/036_Draft_strategy_document_01_09_09_web.pdf (accessed September 19, 2009).
[6] HydroTrader, “About Us,” https://www.hydrotrader.co.nz/auction/about_us.jsp (accessed October 7, 2009).
[7] Agriculture Guide, “Drip Irrigation Method as the Most Efficient Irrigation,” http://agricultureguide.org/drip-irrigation-method-as-the-most-efficient-irrigation/ (accessed October 8, 2009).
[8] Ibid.
[9] Ibid.
[10] Ministry for the Environment, “Freshwater demand (allocation).”
[11] Sustainability, “Rainwater Tanks,” http://www.sustainability.govt.nz/water/rainwater-tanks (accessed October 8, 2009).
[12] Australian Government, “Rudd Government rebates for rainwater tanks and greywater systems,” http://www.environment.gov.au/minister/wong/2009/mr20090130.html (accessed October 8, 2009).
[13] Waitakere City Council, “EcoWater – Water Saving Tips,” http://www.waitakere.govt.nz/CnlSer/wtr/wtrsavetips.asp (accessed October 8, 2009).
[14] Ibid.
[15] Rodney District Council, “Rainwater Tanks,” http://www.rodney.govt.nz/ServicesAtoZ/Pages/RainwaterTanks.aspx (accessed October 8, 2009).
[16] Global Development Research Center, “A Quick Introduction to Green Labelling,” http://www.gdrc.org/sustbiz/green/doc-label_introduction.html (accessed October 7, 2009).
[17] Ibid.
[18] Liam Baldwin, “Virtual water more than vapourware – hopefully,” National Business Review, September 18, 2009.
[19] Ibid.
[20] Ibid.