Environmental and economic efficiency of water industries

I recently attended the 3rd International Water Association’s Conference on Water Economics, Statistics and Finance in Marbella, Spain.
It was a great event, with participants from all over the world. At the conference I gave a keynote talk titled: Evaluating Tradeoffs between Economic and Environmental Efficiency in Water Industries.
The main thrust of the talk was on the conceptual and empirical possibilities for environmentally adjusted efficiency measurements, and their application to the water industries (irrigation, municipal, and wastewater). In a nutshell, this is about how to introduce environmental effects in the traditional methods for productivity and efficiency measurement, and how to use them to evaluate tradeoffs between the economic and environmental performance of production units. If this is done properly, it will enable us to identify such units (e.g. irrigation enterprises) that have mediocre or poor economic performance (do not create much economic benefits) and at the same time create significant environmental impacts (e.g. take a lot of water out of the rivers, which affects water dependent ecosystems). In other words, these type of units damage the environment but do not make a commensurate economic contribution.
In the course of preparing the presentation, I undertook an extensive survey of the literature, which showed that several research groups around the world have very recently grappled with these ideas, and have published work that paves the way for a prolific line of research. This indicates that a widespread application of these methods to quantify environmentally adjusted economic efficiency in all sorts of industries, including the water industries is impending. Watch this space!

Author: Tiho Ancev

Tiho Ancev is a Professor of Agricultural and Resource Economics in the School of Economics, University of Sydney. His main research areas are agricultural, environmental, natural resource and energy economics. Tiho’s main contributions have been in water economics and policy, economics of energy, economics of air pollution and climate change policies, and economics of precision agriculture and agricultural input use. He has published widely on these topics in top international peer reviewed journals. Tiho has led and contributed to national and international research projects in these research areas. He is currently the Managing Editor-in-Chief of the Australian Journal of Agricultural and Resource Economics.