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Water is essential for life. It shapes where and how we live, determines the availability of food and other services that underpin human wellbeing and is crucial for healthy natural ecosystems. Yet in Australia and globally the water cycle has been significantly influenced by climate change, leading to more extreme droughts and floods.

The southeast of the continent and the southwest corner of Western Australia have experienced a pronounced cool-season drying trend over the past few decades, with serious consequences for agricultural heartlands such as Western Australia’s wheatbelt and the Murray-Darling Basin. Droughts, such as the one currently gripping eastern Australia, are becoming more severe because they are occurring in hotter conditions, leading to declines in soil moisture. Prolonged droughts put serious pressure on urban water supplies, requiring water restrictions and changes to behaviour and consumption, and the need for new sources of water supply and water management frameworks.

The risks posed by the disruption of the water cycle will continue to worsen unless we phase out coal, oil and gas and deeply and rapidly reduce greenhouse gas pollution. Without action on climate change, short-term political solutions will be useless.

The focus of this report is how climate change is influencing the water cycle globally as well as here in Australia. We describe the economic importance of the Australian water sector, the changes that are already occurring because of climate change, the health implications of these changes, the waterenergy nexus, and the impacts of changes in the water cycle on urban water supplies, agricultural productivity and natural ecosystems. We also examine global ‘hot spots’ where changes in the water cycle are already occurring, where slower, long-term changes could lead to high risks, and discuss the possible disruption of global food trade from droughts in critical regions.

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