School of Economics
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Browsing School of Economics by Author "Adamson, D."
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Item Open Access Agricultural water saving through technologies: a zombie idea(Institute of Physics (IoP), 2021) Perez-Blanco, C.D.; Loch, A.; Ward, F.; Perry, C.; Adamson, D.A zombie idea is one that has been repeatedly refuted by analysis and evidence, and should have died, but clings to life for reasons that are difficult to understand without further investigation. The perception that investments in modern irrigation systems automatically save water constitutes a zombie idea. On face value, most would accept that modernizing irrigation systems makes sense: agriculture represents 70% of global water withdrawals while physical irrigation efficiencies range between 25-50% worldwide—that is, most of the water entering the irrigation system never makes it to the targeted crop. However, the impacts of modern irrigation systems are complex, and as we show, usually have the opposite effect to that intended through altered cropping and water application decisions by farmers that aggravate water scarcity. This paper investigates how this zombie idea forms; why it persists, even when proven wrong by scientific evidence; and how to overcome it.Item Open Access Economics of Water Security(Springer International Publishing, 2021) Bhaduri, A.; Dionisio Pérez-Blanco, C.; Rey, D.; Iftekhar, S.; Kaushik, A.; Escriva-Bou, A.; Calatrava, J.; Adamson, D.; Palomo-Hierro, S.; Jones, K.; Asbjornsen, H.; Altamirano, M.A.; Lopez-Gunn, E.; Polyakov, M.; Motlagh, M.; Bekchanov, M.; Bogardi, J.J.; Gupta, J.; Nandalal, K.D.W.; Salamé, L.; van Nooijen, R.R.P.; Kumar, N.; Tingsanchali, T.; Bhaduri, A.; Kolechkina, A.G.In the immediate future, accessible runoff of fresh water is unlikely to increase more than the demand forecasted. It will have an impact on economic growth as it may reduce the per capita income of countries and create water conflicts. Such global threat creates a policy conundrum of how to meet basic needs and maximise the benefits from water resources. This chapter investigates different economic instruments in alleviating water-related risks and dealt with associated impacts.Item Open Access (g)etting to the point: The problem with water risk and uncertainty(Elsevier BV, 2020) Loch, A.; Adamson, D.; Auricht, C.Where we may be aware that a problem exists, but have only an incomplete description of the drivers and/or possible management solutions, we will be unaware/uncertain about future returns from, and risks to, private and public investments in capital (i.e. social, natural, economic, cultural and political). This paper explores the unawareness/uncertainty problem by coupling Arrow's states of nature approach for dealing with uncertainty with Rothschild and Stiglitz's exploration of inputs and increasing risk. This results in a modified Just-Pope production function equation isolating inputs to i) protect base capital (natural, social or private) and/or ii) generate an output. By exploring water input supply unawareness via alternative states of nature we may identify tipping points where current technology fails, resulting in irreversible losses of private and public capital tied to water inputs. We conclude by discussing the value of quantifying minimum-input requirements and identifying critical tipping-point outcomes in water systems, increased benefits/risks from transformed landscapes chasing higher economic returns, and the need for adaptive public arrangements in response. These insights may help us to understand future risk to natural capital from rising incentives to steal increasingly constrained resources that may trigger revised risk-sharing arrangements, and some limits to analyses relying on perfect foresight requirements by decision-makers.Item Open Access Grand theft water and the calculus of compliance(Nature Research, 2020) Loch, A.; Perez-Blanco, D.; Carmody, E.; Felbab-Brown, V.; Adamson, D.; Seidl, C.Water crises are amongst the biggest challenges facing humanity. Uncertain future supply, and growing demand, may lead to higher incidences of theft particularly by agricultural users who account for approximately 70% of global water use. However, research into water theft is underexplored in all disciplines. This paper provides a new conceptual framework designed to improve understanding of both individual and institutional barriers to water theft. The framework explores how effective detection, prosecution, conviction and penalties could be assessed. Three case studies are used to test the validity of our framework. Our findings suggest that while individuals and companies may be responsible for the act of theft, the phenomenon reflects a systematic failure of arrangements (political, legal, institutional, etc.). Additionally, when regulators fail to understand the value of water, inadequate penalties increase the risk of theft. Consistent with a view modelling approaches may offer adequate methods for analysis and insight, we invite others to test our framework and engage in a wider conversation about water theft.Item Open Access Preparing for animal health emergencies: considerations for economic evaluation(O.I.E (World Organisation for Animal Health), 2020) Adamson, D.; Gilbert, W.; Hamilton, K.; Donachie, D.; Rushton, J.Livestock production systems and the societies in which they are embedded face a set of risks presented by infectious diseases and natural and human-made disasters which compromise animal health. Within this set, threats are posed by natural, deliberate and accidental actions that can cause sudden changes in animal health status, requiring the allocation of additional resources to manage animal health. Determining the benefit of preparing for such emergencies is a challenge when the total set of risks includes the unknown. Any method for analysing the economic costs and benefits of animal health emergencies must not only accommodate this uncertainty, but make it a central feature of the analysis. Cost-benefit analysis is a key approach to economically evaluating animal health interventions. However, the value of this approach in dealing with uncertainty is often called into question. This paper makes the case that, by restricting the outcomes of an emergency event to specified states of nature, boundaries can be placed on the uncertainty space, allowing cost-benefit analysis to be performed. This method, which merges state-contingent analysis with cost-benefit analysis, is presented here. Further discussion on the economic characteristics of emergency events, and the nature of the threats posed to animal health systems, is also provided.Item Metadata only Profitability of Cashew Nut Processing in Cambodia(The University of Melbourne, 2021) Siv, K.; Adamson, D.; Griffith, G.The global demand for cashew kernels has increased in recent years, particularly in high- and middle-income economies, due to rising international demand for nutritious food. Vietnam supplies 50 per cent of cashews sold on international markets. However, Vietnam is dependent on sourcing raw cashew nuts (RCN) from other countries to fulfil export obligations. Cambodia currently exports more than 70 per cent of its RCN to Vietnam. It is estimated that Cambodia could earn an extra US$30 to 40 million from its cashew nut industry if it developed a domestic processing industry. The objectives of this research are to answer two main questions: first, is it profitable to establish a cashew nut processing plant in Cambodia; and second, if so, what are the main opportunities and constraints? Cost-benefit analysis is employed to calculate the return from developing a small-scale cashew nut processing facility in Cambodia, based on standard Net Present Value and Benefit Cost Ratio measures, over a 20-year time horizon. Based on the most likely set of assumptions, the results show a clear positive return being made from such an investment, with the project taking just two and a half years to reach its break-even point. Cambodia has several advantages for investment in the cashew nut processing industry, including high-quality RCN and high kernel yields, and tax exemptions for Small and Medium Enterprises. However, investors need to consider that the returns are sensitive to any decreasing price paid for cashew kernels. Additional challenges for investors include competition from Vietnam for the Cambodian RCN, the lack of skilled labour, and high electricity costs in Cambodia. In conclusion, though, despite these challenges, it is considered to be financially viable to invest in small-scale cashew nut processing in Cambodia.Item Open Access The Golden Gift of Groundwater in Australia’s MDB(UNESCO, 2021) Adamson, D.; Auricht, C.; Loch, A.; Choi, S.H.; Shin, E.; Makarigakis, A.K.; Sohn, O.; Clench, C.; Trudeau, M.The Murray-Darling Basin (MDB) has the second-most variable surface flows in the world. The unreliable nature of MDB surface water supply is expected to increase under climate change. To partially address this future problem, Australia’s government released 927 gigalitres (GL = 1 billion litres) of groundwater rights to agricultural users in the basin under the Murray-Darling Basin Plan (2012-2026). A key argument for that action was the perception that groundwater resources in the basin are sustainable, and more reliable, than surface water resources. Access to more reliable water often transforms agricultural cropping choices. This chapter uses an optimization model of the MDB to explore how basin agriculture may transform in response to reliable water access—particularly in the northern part of the MDB. We find that traditional opportunistic cropping systems (i.e., annuals) shift towards high-value systems (e.g., perennials) and change irrigation practices when access to groundwater resources is increased. We also examine the change in value for those new groundwater rights as climate change impacts take hold.