This paper examines the discursive construction of water scarcity and its role in the establishment and ongoing legitimacy of Australia's market environmentalist water reforms. It shows that climate was the dominant explanation for scarcity crises in Australia until the reforms commenced in the early 1990s, when it was overtaken by mismanagement. Since 2007 climate change has become increasingly prominent, particularly as a discourse explaining future water crises. Drawing on interviews with policymakers and analysis of water policy, it shows that the discourse of mismanagement has played a significant role in justifying the ongoing application of neoliberal policy mechanisms in Australia. Unlike in most accounts from other countries, in Australia neoliberalization has been facilitated by a discursive denaturalization of water scarcity. Yet, despite the reformers' success in mobilizing scarcity in support of neoliberal agendas, collectivist goals continue to have traction, which is visible both in the failure of the National Drought Policy just before the reforms commenced, and particularly as climate change has become discursively prominent since 2007. This points to the utility of studying the neoliberalization of nature in Australia, confirms the dependence of market environmentalism on real or discursively constructed resource scarcity, and highlights the malleability and incompleteness of neoliberal natures.
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