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Paper 43

Managing the Environmental Health of the River Murray: an economic perspective

The 2005 Jonathon Mann Memorial Lecture

Professor Jeff Bennett

Professor of Environmental Management, asia Pacific School of Economics and Giovernment, ANU.

The initial response from some to the title of this lecture, suggesting as it does that there is an economic perspective on the environmental health of the Murray, may be that this will be a very short lecture. A widely held perception is that economics has nothing much to say about the environment … beyond perhaps it being something that can be exploited for short-term profit. Economics is seen by people holding this view as the tool of the ‘capitalist exploiter’ as represented by pin-stripe-suited talking heads on the 6.30 news discussing inflation rates, interest rates and the current account deficit.

Others contemplating the title may have the expectation that this will be the longest hour of their lives. These people may have experienced economists with a penchant for explaining what appear to be ‘common-sense’ notions using the most complex geometric or algebraic models. Economists after all have the reputation of attracting to their profession those who wanted to be accountants but didn’t have sufficiently vibrant personalities.

I will attempt to live up to neither of those expectations. I aim to do two things. First, I will demonstrate how economics can help in developing a clearer picture of what the environmental management issues are for the River Murray. Second, I’ll show how the economist’s toolbox can be used to improve environmental decision making for the Murray.

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Paper 44

Evolving Markets for Water

Jeff Bennett and Alan Moran

Professor Jeff Bennett, Australian National University and editor of a newly published book, “The Evolution of Markets for Water”. 

Alan Moran, Director, Institute of Public Affairs. 

There are powerful arguments in favour of using markets for water.  Without them, the incentive structures facing politicians and their advisers create transaction costs of a different sort.  Without a market in water in which alternative allocations are priced, there is little possibility of politicians and their advisers achieving efficiency in water allocation from a societal perspective.   In the absence of a water market, regulatory decisions have no measure to determine their true costs and hence a particularly fertile field emerges for bureaucratic empire building with all the dead weight costs that entails. 

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Paper 45

Where to with dairy consultancy?

Richard Shephard

Gippsland Herd Improvement

Dairy consultancy is often viewed as a career goal by clinical veterinarians. Often, only a vague impression of consultancy services that can or could be offered is held and this can become a stumbling block to making the move to develop consultancy skills. This paper discusses consultancy – the types of consultants that exist, the nature of consultancy problems, the problem solving process, the skills required, and the method of delivering results to clients. A better term for consultancy is recommended - advisory practice - because this emphasises the provision of carefully considered opinions to farmers; information that they can use to solve problems. Economic methods such as benefit-cost analysis, scenario analysis and risk analysis provide the template for addressing multidisciplinary problems. These tools provide a means for assessing the impact of uncertainty within a problem – uncertainty that can arise from our lack of knowledge of a discipline like agronomy, or from an unknowable factor such as the quality of the season next year. Therefore dairy consultancy must head towards economics. A clinician who develops good problem solving skills and understands how to use economic tools to solve problems is a consultant who can go anywhere and everywhere.    

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