Fostering integrated land and water management approaches: Evaluating the water footprint of a Mediterranean basin under different agricultural land use scenarios

In the Genil River Basin (southern Spain), agriculture is the greatest pressure on freshwater demand. Furthermore, water degradation caused by soil erosion is becoming a key environmental concern. This study aims to assess the water-related impacts of agriculture combining the use of an ecohydrological model (SWAT) with a spatiotemporal water footprint assessment to evaluate the current status of streamflow (blue water), soil water (green water) and the assimilability of sediments by streamflow (grey water footprint). The Common Agricultural Policy (CAP) requires farmers to adopt certain agricultural practices that are beneficial for the environment. Such practices could affect the conditions of available land and water resources. Because of the importance of applying the best land management practices for the maintenance of sustainable water resources, the study also infers probable water availability and water pollution level changes under different post-2013 CAP scenarios. The Genil streamflow is highly regulated, and, as a result, it is hard to discern significant changes (p < 0.05) under the proposed scenarios. However, there is a shift with afforestation measures from unproductive (i.e., direct soil evaporation) to productive water (i.e., evapotranspired water from agricultural and natural areas, excluding non-growing periods) consumption. The probability of annual evapotranspiration from natural areas being greater in afforestation scenarios than in the baseline scenario is 0.70 to 0.88, whereas the likelihood of soil water evaporation being lower is 0.60. Evapotranspiration in natural areas increases by about 521% from September to May under afforestation measures compared with the baseline scenario, whereas soil water evaporation decreases by 30% in winter. The grey water footprint and water pollution level decrease by 19% and 9%, respectively, with the highest streamflow conditions under afforestation as opposed to current conditions. However, water pollution levels of suspended solids greater than 1 indicate that the river flow is not capable of assimilating the existing sediment loads. Since land use changes and agricultural practices have a major impact on water resources, the post-2013 CAP reform can provide environmental benefits for water allocation and mitigation of water pollution. However, further efforts are required to better align the policy goals of the CAP and the Water Framework Directive.     

The Edmonton-Calgary corridor: Simulating future land cover change under potential government intervention

The region connecting Edmonton and Calgary, the two largest cities in Alberta, contains rich agricultural land and is one of the most rapidly changing areas in the province. There is little legislation to restrict urban sprawl or adequately protect agricultural land or native grasslands, and there has been little research to predict future alteration. The main study objectives are, therefore, to assess historical changes in the Edmonton-Calgary corridor from 1984 to 2013 and simulate the future landscape change to 2022 under potential government intervention scenarios. Satellite imagery from Landsat, used in conjunction with biogeophysical variables, was used to create a history of cover in the Edmonton-Calgary area. This history of the environment can be used as a baseline to project changes into the future. Testing different legislative scenarios under two major branches of modifying rates of change or locations of change can be used to identify effective policies for limiting damage to the environment while still allowing for urban growth. Five scenarios were created for this purpose: (1) business as usual, (2) increased rate of urban expansion, (3) no urban expansion, (4) implementation of greenbelts around urban areas, (5) protection of the best agricultural land. This study finds that over the past 30 years, urban area has nearly doubled in size, targeting predominately farmland, especially due to an increase in rural subdivisions. Each scenario impacts growth differently, however, greenbelts and the no expansion model decease growth the most, while the agricultural protection is comparable to the business as usual scenario.     

Managing complexity in modern farming*

Modern farming in Australia is no longer simple. Farms are large, multi‐enterprise businesses underpinned by expensive capital investments, changing production technologies, volatile markets and social challenges. The complexity of modern broadacre farming leads to the question: what is the nature of the relationship between farm business complexity and farm profitability? This study uses bioeconomic farm modelling and employs eight measures of complexity to examine the profitability and complexity of a wide range of broadacre farming systems in Australia. Rank order correlations between farm profitability and each measure of complexity show inconsistent relationships, although the most profitable farming systems are found to be reasonably complex on several criteria. Among the set of highly profitable systems are found some characterised by less complexity. A commonly acknowledged feature of farm business complexity is the annual workload of the farmer, yet the trade‐off between farm profit and this workload is found not to be large. A case is outlined where the farmer’s annual hours worked could be reduced by 9 per cent for a 3 per cent reduction in farm profit. If farmers’ workloads are proving problematic now, and in the future, then agricultural R&D, service delivery and policy development will need to focus more on being highly attractive to increasingly time‐poor farm managers.     

Forestry in the Republic of Ireland: Government policy,grant incentives and carbon sequestration value

Recent decades have seen a rapid increase in the area of privately owned forest plantations in Ireland. This has been largely driven by grant aid and annual premium payments from the government and the European Union. These forests are significant carbon sinks and as such are delivering added benefit to the country by contributing to greenhouse gas reductions under the Kyoto Protocol.The direct impact of government subvention on the net present value (NPV) for a defined forestry plantation is investigated. The added value of carbon sequestration to forestry investment is also examined using the Forestry Commission (Great Britain) carbon model. Extending the typical assumption of a constant carbon price for project appraisal purposes, this paper allows carbon prices to evolve randomly according to a flexible stochastic price process. The model chosen is an extended mean-reverting jump-diffusion with the flexibility to capture the higher order statistical features (i.e. skewness and kurtosis) of the carbon markets. This allows for an analysis of the risk and uncertainty around the NPV from exposure to stochastic carbon prices. It is shown that government grants and annual premiums for afforestation significantly improve the NPV on forestry investment. Carbon sequestration is shown to add further value.     

Modelling outcome‐related risk in choice experiments

In this study, we introduce information on outcome‐related risk as an additional attribute in a choice model of preferences for a land‐based climate change mitigation project. We provide a comprehensive comparison of different model specifications arising from different behavioural assumptions about the way that respondents process information on outcome‐related risk within the choice task. We find significant differences between several specifications in terms of both model fit and WTP estimates. The behavioural assumptions made when choosing a particular model specification, and reasons that motivate them should be made explicit, and consequences of using different specifications should not be ignored.     

Measurement of greenhouse gas emissions from agriculture: economic implications for policy and agricultural producers*

If agriculture were to be included in Australia’s carbon price scheme, a key decision for government would be how to estimate greenhouse gas emissions. We explore the consequences of three different methods for measuring on‐farm emissions: national accounting methods, an amended version of those methods and use of best‐available local data. Estimated emissions under the three methods can vary widely; for example, on a case study farm in Western Australia, local data indicated 44 per cent lower emissions than did the national accounts method. If on‐farm emissions are subject to an emissions price, the impact on farm profit is large and varies considerably with different measurement methods. For instance, if a price of $23/t of CO2‐e applies then farm profit falls by 14.4–30.8 per cent depending on the measurement method. Thus, the choice of measurement method can have large distributional consequences. On the other hand, inaccurate measurement results in relatively minor deadweight losses. On‐farm sequestration through reafforestation may lessen the impact of an emissions price on farm businesses, although it will require a high carbon price to be viable, especially if sequestration rates are underestimated or low.     

How would global trade liberalization affect rural and regional incomes in Australia?

Agricultural protection in rich countries, which had depressed Australian farm incomes via its impact on Australia’s terms of trade, has diminished over the past two decades. So too has agricultural export taxation in poor countries, which has had the opposite impact on those terms of trade. Meanwhile, however, import protection for developing country farmers has been steadily growing. To what extent are Australian farmers and rural regions still adversely affected by farm and non‐farm price‐ and trade‐distortive policies abroad? This paper draws on new estimates of the current extent of those domestic and foreign distortions: first, to model their net impact on Australia’s terms of trade (using the World Bank’s Linkage model of the global economy); and second, to model the effects of that terms of trade impact on output and real incomes in rural versus urban and other regions and households within Australia as of 2004 (using Monash’s multi‐regional TERM model of the Australian economy).     

Regional economic impacts of a plant disease incursion using a general equilibrium approach*

The present study uses a dynamic multiregional computable general equilibrium (CGE) model to estimate the micro‐ and macroeconomic effects of a hypothetical disease or pest outbreak. Our example is a Karnal bunt incursion in wheat in Western Australia. The extent of the incursion, the impact of the disease or pest on plant yields, the response of buyers, the costs of eradication and the time path of the scenario contribute to outcomes at the industry, regional, state and national levels. We decompose the contribution of these individual direct effects to the overall impact of the incursion. This might provide some guidance regarding areas for priority in attempting to eradicate or minimise the impacts of a disease or pest. The study also introduces a theory of dynamic regional labour adjustment in which economic events may lead to both real wage differentials and worker migration between regions.     

Evaluating off‐site environmental mitigation using choice modelling*

Evaluation of off‐site mitigation entails comparison of utility changes between two sites. Choice modelling has been used to identify community willingness to trade‐off attributes for two different types of stream in New Zealand. Estimated utility functions are used to derive marginal rates of substitution and stream attribute part worths which can be used to design or evaluate both on‐site and off‐site mitigation policy. Latent class multinomial logit models identified classes of citizens who valued stream attributes quite differently. Significant differences in values for some attributes on different stream types imply heterogeneous mitigation ratios across environmental attributes.