Governance issues in developing and implementing offsets for water management benefits: Can preliminary evaluation guide implementation effectiveness?

This article explores governance issues in developing innovative pollutant offset programs by focusing on a case study being piloted at the Gisborne Recycled Water Plant in Jacksons Creek, a rural sub-catchment of the Maribyrnong River north of Melbourne, Australia. The paper offers preliminary lessons from the ongoing design and anticipated challenges facing this innovative program based on reflections from the literature and project progress to-date. This case exemplifies a form of adaptive governance – an approach well suited to achieving broad sustainability objectives – and for which an early assessment is both appropriate and opportune. Adaptive governance is characterized by governmental collaboration with civil society groups, social learning through public participation, and experimentation leading to more flexible policy outcomes. Early assessment affords the possibility of mid-course corrections, drawing on experience acquired elsewhere. We contend that the approach being developed in Victoria through this pilot program has implications beyond the use of recycled wastewater for achieving various social objectives. It may also contribute to the development of an expansive water quality offset framework applicable to point source discharges, nonpoint source pollution, and sewerage overspills. Moreover, the approach can be applied to design of offset systems elsewhere – with appropriate economic savings and effective application to multiple water quality challenges if potential problems are discerned early

A macroeconomics-inspired interpretation of the terrestrial water cycle

This article develops an approach that applies macroeconomic concepts to the interpretation of complex, water related natural processes. By translating and reinterpreting these processes into a language that is more accessible to a broader audience otherwise unaccustomed to its terms will likely help sharpen our understanding of the terrestrial water cycle. For economists, we describe climate-forming natural processes in a manner consistent with the fundamentals of the mainstream approach. For noneconomists, parallels from economically determined, relatively short-term observations can be applied conceptually to identify dynamics which occur over much longer and therefore more elusive natural occurrences, in particular considering the role of forests and how persistent land conversion over a millennium has shaped the earth's surface and impacted climate stability. The set of “supporting ecosystem services” highlighted in the Millennium Ecosystem Assessment (MEA) coincides with the ground phase of the terrestrial water cycle, taking the concept beyond the ecosystem service perspective and identifying it as a planetary service. Ecosystem and planetary services differ in the same way that microeconomic and macroeconomic perspectives do. The water cycle intensity of a geographical area may well be related to a rainfall multiplier that measures the ability of continental ecosystems to increase the amount of water moving across terrestrial surfaces and descending as rainfall through transpiration and deposition, and re-transpiration and re-deposition of the water content in the air that originally arrives from the oceans. Building upon the MEA's association of human wellbeing with ecosystem features, the rainfall multiplier serves as a physical indicator and measure of the natural basis of wellbeing creation

Greening Capitalism? A Marxist Critique of Carbon Markets

Climate change is increasingly being recognized as a serious threat to dominant modes of social organization, inspiring suggestions that capitalism itself needs to be transformed if we are to ‘decarbonize’ the global economy. Since the Kyoto Protocol in 1997, carbon markets have emerged as the main politico-economic tools in global efforts to address climate change. Newell and Paterson (2010) have recently claimed that the embrace of carbon markets by financial and political elites constitutes a possible first step towards the transformation of current modes of capitalist organization into a new form of greener, more sustainable ‘climate capitalism.’ In this paper, we argue that the institutionalization of carbon markets does not, in fact, represent a move towards the radical transformation of capitalism, but is better understood as the most recent expression of ongoing trends of ecological commodification and expropriation, driving familiar processes of uneven and crisis-prone development. In this paper, we review four critical Marxist concepts: metabolic rift (Foster, 1999), capitalism as world ecology (Moore, 2011a), uneven development and accumulation through dispossession (Harvey, 2003, 2006), and sub-imperialism (Marini, 1972, 1977), developing a framework for a Marxist analysis of carbon markets. Our analysis shows that carbon markets form part of a longer historical development of global capitalism and its relation to nature. Carbon markets, we argue, serve as creative new modes of accumulation, but are unlikely to transform capitalist dynamics in ways that might foster a more sustainable global economy. Our analysis also elucidates, in particular, the role that carbon markets play in exacerbating uneven development within the Global South, as elites in emerging economies leverage carbon market financing to pursue new strategies of sub-imperial expansion. </jats:p

Design of Efficient Water Pricing Policies Integrating Basinwide Resource Opportunity Costs

By ignoring the opportunity cost of water use, water is undervalued, which can lead to significant errors in investments and water allocation decisions. The marginal resource opportunity cost (MROC) varies in time and space, as resource availability, demands, and users’ WTP vary. This spatial and temporal variability can only be captured by basinwide hydro-economic models integrating water demands and environmental requirements, resources, infrastructure, and operational and institutional restrictions. This paper presents a method for the simulation of water pricing policies linked to water availability, and the design of efficient pricing policies that incorporate the basinwide marginal value of water. Two approaches were applied: priority-based simulation and economic optimization. The improvement in economic efficiency was assessed by comparing the results from simulation of the current system operation and the pricing schedule. The difference between the benefits for the simulated current management and the upper bound benefits from optimization indicates the maximum gap that could be bridged with pricing. In the application to a synthetic case, a storage-dependent step pricing schedule derived from average MROC values led to benefits that capture 80% of the gap of net benefits between management without pricing and the economically optimal management. Different pricing policies were tested, depending not only on reservoir storage but also on previous inflows. The results show that the method is useful for designing pricing policies that enhance the economic benefits, leading to more efficient resource allocations over time and across the competing uses.This study has been partially funded by the EU 6th FP project AQUAMONEY (SSPI-022723), the 7th FP GENESIS project (226536), and SAWARES (Plan Nacional I+D+i 2008-2011, CGL2009-13238-C02-01 and C02-02) and SCARCE (Consolider-Ingenio 2010 CSD2009-00065) of the Spanish Ministry of Economy and Competitiveness.Pulido-Velazquez, M.; Álvarez Mendiola, E.; Andreu Álvarez, J. (2013). Design of Efficient Water Pricing Policies Integrating Basinwide Resource Opportunity Costs. Journal of Water Resources Planning and Management. 139(5):583-592. https://doi.org/10.1061/(ASCE)WR.1943-5452.0000262S583592139

Single-objective versus multiobjective optimization of water distribution systems accounting for greenhouse gas emissions by carbon pricing

Previous research has demonstrated that there are significant trade-offs between the competing objectives of minimizing costs and greenhouse gas (GHG) emissions for water distribution system (WDS) optimization. However, upon introduction of an emission trading scheme, GHG emissions are likely to be priced at a particular level. Thus, a monetary value can be assigned to GHG emissions, enabling a single-objective optimization approach to be used. This raises the question of whether the introduction of carbon pricing under an emission trading scheme will make the use of a multiobjective optimization approach obsolete or whether such an approach can provide additional insights that are useful in a decision-making context. In this paper, the above questions are explored via two case studies. The optimization results obtained for the two case studies using both single-objective and multiobjective approaches are analyzed. The analyses show that the single-objective approach results in a loss of trade-off information between the two objectives. In contrast, the multiobjective approach provides decision makers with more insight into the trade-offs between the two objectives. As a result, a multiobjective approach is recommended for the optimization of WDSs accounting for GHG emissions when considering carbon pricing. © 2010 ASCE.Wenyan Wu, Holger R. Maier, and Angus R. Simpso

Accounting for greenhouse gas emissions in multiobjective genetic algorithm optimization of water distribution systems

Considerable research has been carried out on the optimization of water distribution systems (WDSs) over the last three decades. In previous research, attention has mainly focused on the minimization of cost, due to the high expenditure associated with the construction and maintenance of such systems. However, the impacts of WDSs on the environment usually have not been considered adequately. The recent increasing awareness of sustainability and climate change, especially global warming, has led to research where greenhouse gas (GHG) emissions are considered. In the study described in this paper a multiobjective genetic algorithm for WDS optimization has been used as an explorative tool to investigate the trade-offs between the traditional economic objective of minimizing costs and an additional environmental objective of minimizing GHG emissions. The impacts of minimizing GHG emissions on the results of WDS optimization have been explored for a case study in this paper. The results indicate that the inclusion of GHG emission minimization as one of the objectives results in significant trade-offs between the economic and environmental objectives. Furthermore, a sensitivity analysis has been conducted by using different discount rates in a present value analysis for computing both ongoing costs and GHG emissions. The results obtained show that the Pareto-optimal front is very sensitive to the discount rates used. As a result, the selection of discount rates has a significant impact on final decision making. © 2010 ASCE.Wenyan Wu, Angus R. Simpson, and Holger R. Maie