This report assesses whether it would be socially desirable to provide enhanced post-cyclone emer... more This report assesses whether it would be socially desirable to provide enhanced post-cyclone emergency services in towns such as Cairns. One means of addressing the issue is to estimate the net social benefit that would accrue to Cairns residents. Focus groups of residents identified four services as being the most relevant: accommodation of pets in shelters, police patrols for a longer period after a cyclone, faster resupply of fresh food to shops, and faster reconnection of utilities such as electricity and sewerage. A choice experiment indicated that Cairns households were on average prepared to pay about $124 per annum for faster resupply of fresh food, and almost three times more each year for faster reconnection of utilities, but only about $11 per annum for each additional day of police patrols. However, residents expressed an average negative willingness to pay about -$99 per annum per household for accommodation of pets in a shelter after a cyclone. It was not possible to o...
Multi-Criteria Analysis is highly subjective and potentially open to abuse through the influence ... more Multi-Criteria Analysis is highly subjective and potentially open to abuse through the influence of special interests. Moreover, it is seriously flawed conceptually and mathematically. At best, its continued use by public sector policy advisers and decisionmakers is due to ignorance. At worst, it represents gross negligence in the provision of advice to Ministers, and possibly breaches Australian Public Service Values and the Code of Conduct.
Increasing attention is being given to adaptation of natural and human systems to climate change.... more Increasing attention is being given to adaptation of natural and human systems to climate change. The academic literature covers a wide spectrum of perspectives. Policy considerations, on the other hand, are driven largely by techno-scientific considerations, including in particular a risk-management approach. However, the inherent uncertainties of climate change mean that conventional risk-management approaches are inappropriate because the risks cannot be quantified. Economic theory, in the form of ‘real options’, offers a conceptual alternative for specifying least-cost adaptation strategies. But little, if any, work has been undertaken to identify individuals’ preferences and priorities, a necessary precondition to estimating the benefits of adaptation measures. It is therefore proposed to identify and compare the priorities and preferences of planners, communities and individuals as a first step towards estimating individuals’ willingness to pay for adaptation measures.
Access to water is a critical aspect of livestock production, although the relationship between l... more Access to water is a critical aspect of livestock production, although the relationship between livestock weight gain and water quality remains poorly understood. Previous work has shown that water quality of poorly managed farm dams can be improved by fencing and constructing hardened watering points to limit stock access to the dam, and revegetation to filter contaminant inflow. Here we use cattle weight gain data from three North American studies to develop a cost-benefit analysis for the renovation of farm dams to improve water quality and, in turn, promote cattle weight gain on farms in south-eastern Australia. Our analysis indicated a strong likelihood of positive results and suggested there may be substantial net economic benefit from renovating dams in poor condition to improve water quality. The average per-farm Benefit-Cost Ratios based on deterministic assumptions was 1.5 for New South Wales (NSW) and 3.0 for Victoria in areas where rainfall exceeds 600mm annually. Our an...
Individuals and societies have always adapted to change, whether catastrophic or slow onset. Over... more Individuals and societies have always adapted to change, whether catastrophic or slow onset. Over the last two centuries, however, governments have significantly extended their role as ultimate social manager of risk. It is as yet unclear whether, how, or to what extent governments will add adaptation to climate change to their portfolio of responsibilities. This report investigates this question on the basis of review and analysis of economic and policy thinking on the issues, and by using a new dataset on the 2011 Brisbane flood. Uncertainties about the future impacts of climate change obviate definitive conclusions about future adaptation actions and insights for specific situations cannot be generalised. Economic precepts suggest that governments should limit intervention to cases of genuine market failure, such as the provision of information on likely impacts of climate change including at the local level, or to support for people affected by uninsurable events. But any role a...
Scientists consider that some climate change is already inevitable, even if anthropogenic greenho... more Scientists consider that some climate change is already inevitable, even if anthropogenic greenhouse emissions are stabilised immediately. Adaptation measures are therefore needed, irrespective of any mitigation action. But policy discussion is focussed on deterministic responses, generally risk-based "worst case‟ scenarios. An example is the development of more stringent standards for buildings and for coastal development. Such "climate proofing‟ is misconceived in the face of the huge uncertainties involved. Economists need to promote more rational policy frameworks that draw on cost-benefit analysis, including the use of "real options‟ to minimise the cost to society of adapting to climate change.
The concept of ‘standing’ – whose benefits and costs should be counted – is well-established, and... more The concept of ‘standing’ – whose benefits and costs should be counted – is well-established, and its specification is a crucial step in conducting a Cost-Benefit Analysis. But it is often ignored by analysts. From a national perspective, the orthodox formulation of ‘standing’ is ‘the whole of society’, or at least the legal citizens of the country concerned. The underlying rationale appears to be that benefits should be counted only for those who pay for a project through their taxes. Little or no academic attention has been given to ‘standing’ at the sub-national level in federations such as Australia or the USA. However, the general lack of concordance between taxation areas and benefit regions suggests that ‘standing’ in the border regions of contiguous states should be deemed to possess a national perspective, at least as a default position.
This report assesses whether it would be socially desirable to provide enhanced post-cyclone emer... more This report assesses whether it would be socially desirable to provide enhanced post-cyclone emergency services in towns such as Cairns. One means of addressing the issue is to estimate the net social benefit that would accrue to Cairns residents. Focus groups of residents identified four services as being the most relevant: accommodation of pets in shelters, police patrols for a longer period after a cyclone, faster resupply of fresh food to shops, and faster reconnection of utilities such as electricity and sewerage. A choice experiment indicated that Cairns households were on average prepared to pay about $124 per annum for faster resupply of fresh food, and almost three times more each year for faster reconnection of utilities, but only about $11 per annum for each additional day of police patrols. However, residents expressed an average negative willingness to pay about -$99 per annum per household for accommodation of pets in a shelter after a cyclone. It was not possible to o...
Multi-Criteria Analysis is highly subjective and potentially open to abuse through the influence ... more Multi-Criteria Analysis is highly subjective and potentially open to abuse through the influence of special interests. Moreover, it is seriously flawed conceptually and mathematically. At best, its continued use by public sector policy advisers and decisionmakers is due to ignorance. At worst, it represents gross negligence in the provision of advice to Ministers, and possibly breaches Australian Public Service Values and the Code of Conduct.
Increasing attention is being given to adaptation of natural and human systems to climate change.... more Increasing attention is being given to adaptation of natural and human systems to climate change. The academic literature covers a wide spectrum of perspectives. Policy considerations, on the other hand, are driven largely by techno-scientific considerations, including in particular a risk-management approach. However, the inherent uncertainties of climate change mean that conventional risk-management approaches are inappropriate because the risks cannot be quantified. Economic theory, in the form of ‘real options’, offers a conceptual alternative for specifying least-cost adaptation strategies. But little, if any, work has been undertaken to identify individuals’ preferences and priorities, a necessary precondition to estimating the benefits of adaptation measures. It is therefore proposed to identify and compare the priorities and preferences of planners, communities and individuals as a first step towards estimating individuals’ willingness to pay for adaptation measures.
Access to water is a critical aspect of livestock production, although the relationship between l... more Access to water is a critical aspect of livestock production, although the relationship between livestock weight gain and water quality remains poorly understood. Previous work has shown that water quality of poorly managed farm dams can be improved by fencing and constructing hardened watering points to limit stock access to the dam, and revegetation to filter contaminant inflow. Here we use cattle weight gain data from three North American studies to develop a cost-benefit analysis for the renovation of farm dams to improve water quality and, in turn, promote cattle weight gain on farms in south-eastern Australia. Our analysis indicated a strong likelihood of positive results and suggested there may be substantial net economic benefit from renovating dams in poor condition to improve water quality. The average per-farm Benefit-Cost Ratios based on deterministic assumptions was 1.5 for New South Wales (NSW) and 3.0 for Victoria in areas where rainfall exceeds 600mm annually. Our an...
Individuals and societies have always adapted to change, whether catastrophic or slow onset. Over... more Individuals and societies have always adapted to change, whether catastrophic or slow onset. Over the last two centuries, however, governments have significantly extended their role as ultimate social manager of risk. It is as yet unclear whether, how, or to what extent governments will add adaptation to climate change to their portfolio of responsibilities. This report investigates this question on the basis of review and analysis of economic and policy thinking on the issues, and by using a new dataset on the 2011 Brisbane flood. Uncertainties about the future impacts of climate change obviate definitive conclusions about future adaptation actions and insights for specific situations cannot be generalised. Economic precepts suggest that governments should limit intervention to cases of genuine market failure, such as the provision of information on likely impacts of climate change including at the local level, or to support for people affected by uninsurable events. But any role a...
Scientists consider that some climate change is already inevitable, even if anthropogenic greenho... more Scientists consider that some climate change is already inevitable, even if anthropogenic greenhouse emissions are stabilised immediately. Adaptation measures are therefore needed, irrespective of any mitigation action. But policy discussion is focussed on deterministic responses, generally risk-based "worst case‟ scenarios. An example is the development of more stringent standards for buildings and for coastal development. Such "climate proofing‟ is misconceived in the face of the huge uncertainties involved. Economists need to promote more rational policy frameworks that draw on cost-benefit analysis, including the use of "real options‟ to minimise the cost to society of adapting to climate change.
The concept of ‘standing’ – whose benefits and costs should be counted – is well-established, and... more The concept of ‘standing’ – whose benefits and costs should be counted – is well-established, and its specification is a crucial step in conducting a Cost-Benefit Analysis. But it is often ignored by analysts. From a national perspective, the orthodox formulation of ‘standing’ is ‘the whole of society’, or at least the legal citizens of the country concerned. The underlying rationale appears to be that benefits should be counted only for those who pay for a project through their taxes. Little or no academic attention has been given to ‘standing’ at the sub-national level in federations such as Australia or the USA. However, the general lack of concordance between taxation areas and benefit regions suggests that ‘standing’ in the border regions of contiguous states should be deemed to possess a national perspective, at least as a default position.
Australian experience reveals an increasingly post-truth approach to economic evaluation, with go... more Australian experience reveals an increasingly post-truth approach to economic evaluation, with governments ignoring or avoiding professional expertise when promoting their favoured projects and policies. Lack of formal guidelines for economic evaluation, such as those promulgated by Congress and successive American presidents, are a partial explanation. A concomitant hollowing-out of public service expertise in economic analysis has also occurred. More importantly, public sector agencies have even lost much of their capability to understand and assess evaluations carried out on their behalf by commercial consultants. An effective antidote to this deskilling would be the production and publication of analyses of major government policy and project proposals, as well as the development of a standardised analytical framework reinforced with training for public servants.
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