Speaking at a water conference in Melbourne yesterday, Department of Sustainability and Environment executive director Campbell Fitzpatrick said the human aspect of climate change in the Murray-Darling Basin must not be forgotten amid the heated debate over water reform.

Victoria and South Australia have renewed hostilities over water, after South Australian Premier Mike Rann threatened to use the High Court to secure more water for the lower reaches of the Murray River.

Mr Rann, along with the Rudd Government, wants Victoria to remove the "4 per cent" limit on trading water out of irrigation districts.

Victoria wants to retain the limit to prevent the sudden removal of water - and therefore wealth - from northern Victorian towns, and Mr Fitzpatrick told the conference people living in those towns faced similar plights to the inhabitants of low-lying Pacific islands.

"I think a lot of these communities in northern Victoria are pretty close to Australia's first climate change refugees," he said.

"We think of climate change refugees as groups out in the Pacific Ocean on atolls about to be swamped by rising sea levels. Well, these are our own version of them."

Mr Fitzpatrick did not name towns, but the comments were a clear reference to communities such as Swan Hill and Mildura whose local economies are largely dependent on irrigation from the Murray River.

The Rudd Government wants the 4pc limit removed to ensure it does not pose a barrier to its plans to buy back $3 billion worth of water entitlements.

Mr Fitzpatrick said the limit was put in place long before such mammoth buyback plans were implemented.

"We didn't contemplate having billions on the market over four years," he said.

The limit is expected to rise to 6pc at the end of this year, and Mr Fitzpatrick indicated its removal might be more feasible once the Productivity Commission has finalised its advice to the Commonwealth on alternative water markets.