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In this post, we wrap up our interview with Wayne Lording. Previously, we looked at what Wayne did to reduce his energy bills and water and fertiliser use. See here for an introduction to the series. The key points from the wrap up are:
- Wayne’s investment helped reduced his costs through lower use of LPG, electricity, fertiliser and water,
- Other farmers can also reduce their costs by investing in renewables and water reuse,
- Very easy to install,
- Can benefit very soon from reduced utility bills, and
- Can also benefit from freeing up cash to invest in the farm.
Thanks for watching, I hope you enjoyed the series!
This week we consider our series on sustainable farming by talking to Wayne Lording about how he recycles grey- and black-water to replace irrigated water and fertiliser. Key points are:
- Treated water is used to irrigate and fertilise olive groves.
- The key technology is a small pump, which is readily available.
- Water reuse system has a payback period of 18 months.
- The more water and fertiliser you use, the more you can save from installing a similar water reuse system.
- Wayne’s water reuse system also has risk-management benefits by providing a hedge against water and fertiliser price increases.
In the second of our series on Sustainable Farming on Wayne Lording’s farm (see here for the introduction), we talk to Wayne about how and why he installed solar and geothermal technologies to replace conventional energy sources. Key points are:
- Combined solar and geothermal system has a payback period of one year.
- Geothermal technologies are available and proven in Australia.
- The key savings are from reducing ongoing energy costs. In Wayne’s case, he saved $5200 per year from reducing the need to use LPG.
- Because renewable energy technologies require little or no fuel, they provide a useful hedge against electricity or LPG price volatility.
Late last year Lindsey Beck and I interviewed Wayne Lording on his farm. I was interested to see why and how Wayne implemented sustainability technologies on his farm. Essentially, he gains a financial benefit from using renewable energy and water reuse. Interestingly, he is one of the few farmers using geothermal energy on his farm. The two videos here are an introduction this series. In the following weeks we will have videos on:
- Renewable energy, specifically solar and geothermal,
- Water reuse, and
- Wrap up,
In all the videos, I provide a brief economic analysis of Wayne’s investments. I hope you enjoy this series.
Last week I was visited by election campaigners who wanted to sell me on the merits of their party for the upcoming Victorian election. I may be strange, but I actually was happy to be visited by door-knockers so I could ask them some questions. The Victorian election has been fought on competing infrastructure projects but there didn’t seem to be clear details on how the projects would be funded. Being fiscally responsible, I wanted to know how these projects would be funded. So I asked the door-knockers the question. And the answer I got was: “through the magic of PPPs [public-private partnerships].”
I was quite frankly stunned that someone in our digital world still believes in magic! And in such a brutal arena as politics, it was great to see that innocence wasn’t dead. Then the implications hit me: what kind of magic are we talking about here? White or black magic? Then you get into finer categories such as illusionism, sorcery and necromancy. If it was necromancy, this would have major implications for workplace relations. Would the government use zombies to build the infrastructure? There will be huge cost savings from using the undead. But you need to feed zombies brains which may pose a public safety issue to live humans. Furthermore, the building unions probably wouldn’t be happy that their members’ jobs will be stolen by zombies. I can see why the issue of infrastructure financing is hard to explain to voters.
One of the extraordinary things to witness at the G20 meeting in Brisbane during the weekend of 15-16 November, was Australia’s rearguard action to keep climate change of the agenda. The G20 host’s justification was that climate change would distract from the economic policy focus. Besides, according to Australia’s Treasurer (i.e. Finance Minister), climate change is no impediment to economic growth. This is despite the wealth of economic research that has been produced that has modelled the economic impacts of climate change. A potential economic impact that has been gaining some traction is the ‘carbon bubble‘. The carbon bubble is where assets that derive most of their value from carbon reserves (i.e. coal, oil and gas) become ‘stranded assets’ as their value falls in response to international climate change action. For a country like Australia that is heavily dependent on fossil fuels for its prosperity, you would think a carbon bubble would have a serious economic impact. I went along to listen to a talk about what a carbon bubble meant for Australia. The panel was made up of Prof. Ross Garnaut, Jemma Green, Dr John Hewson and Tony Wood. Each of them an expert in economics, finance and energy in their own right. This is what I took from the discussion.
The spectre of an Ebola outbreak has predictably prompted knee jerk reactions from governments around the world in an attempt to demonstrate that they are in control. Certainly, governments have a responsibility to protect their citizens and to prevent a panic amongst their constituents. In a sense, Ebola is only one example of how perception has come to dominate policy effectiveness in governments around the world. This post is not a whinge-fest on the hopelessness of governments. Instead, I want to demonstrate how a benefit-cost framework can help governments understand the pros and cons of different Ebola response strategies taken from my experience working on biosecurity issues. I will do so in a qualitative way to show that benefit-cost analysis does not necessarily involve lengthy reports and expensive consultants – this is something that can be done quickly to give policy-makers a sense of what are the main drivers of the problem (Ebola) and what strategies can be used to deal with it.
Last week, the consulting firm Deloitte’s released a new report titled, Get out of your own way: Unleashing productivity as part of their ‘Building the Lucky Country’ series. One of the main results was that Australian businesses imposed more red tape on themselves than the government does. Deloitte’s quantified the annual cost of self-imposed $155 billion compared to $94 billion from government-imposed regulation. Furthermore, this cost is associated with the growing ‘compliance sector’ that replaced the back-office staff that had been shed as a result of improvements in technology. So Australian firms have effectively spent their productivity dividend on beefing up their compliance capacity rather than concentrating on core activities. Deloitte’s attributes the growth of the ‘compliance sector’ to the growing risk-aversion among large Australian corporates to avoiding ‘stuff ups’. I generally found it an interesting report, although I thought it brushed over an important point: imposing rules is an implicit investment decision. I want to go through this important point in more detail in this post.