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The impact of innovation on the dairy industry over the last 30 years

Nov 2011

TheCIE has conducted a major evaluation of on-farm dairy RD&E over the past 30 years. Key findings are:

Major increases in on-farm production are estimated to have increased Victorian dairy farm profitability by around $10 billion over the three decades from 1980 to 2010;
Nearly half of this appears to be attributable to farmers’ and industry’s own initiatives. The other half may be attributable to on-farm RD&E which is estimated to have increased farmers’ profitability by around $7.7 billion in net present value terms over the past 30 years;
This same RD&E is estimated to have cost an estimated $2.3 billion in net present value terms over the same 30 years;
This suggests an estimated $3.30 economic benefit for each dollar invested in R&D. However, for every dollar dairy farmers have invested, their return may be well over (at least double) $3.30 because more than half of the investment has been paid by external sources. Moreover, many of the benefits from RD&E will continue to flow for some time into the future, representing further returns to investment in RD&E;
Processors are likely to have also gained from the considerable increase in production RD&E has delivered;
The major changes driving the increased profitability have been increased pasture production and utilisation, increased supplementary feeding and more efficient cows. Increased farm scale, improved animal health and natural resource management have also been important contributors.

To view the full report - click here

Also see Diary Australia website - click here

For summary, see Department of Primary Industries website - click here

The taxation burden on the Australian new housing sector

Oct 2011

TheCIE conducted a major review of taxes on housing for the Housing Industry Association in the run up to the Government's October 2011 Tax Forum.

The report measured the burden and incidence of housing taxes relative to the rest of the economy as well as the inefficiencies of various housing taxes.

To view a summary of findings - click here

State Water Corporation Demand Forecasting

Apr 2011

TheCIE was engaged by State Water Corporation to develop demand forecasts for the purposes of its price submission to IPART. The study involved developing the projected water sales to the rural water sector (both irrigators and towns/industries). The study included examining the potential impacts on water extraction of alternative climate change scenarios from the CSIRO’s Sustainable Yield Projects using output data from the IQQM hydrology simulation models (including the Border Rivers catchment) to generate future forecasts of consumption under a range of future climatic conditions. It included consultation with district agronomists in NSW to understand irrigators potential responses to changes in future water availability.

View report online [pdf, 858KB]

Alternative Growth Paths

Jan 2011

TheCIE was commissioned by NSW Department of Planning to conduct an analysis of the benefits and costs of alternative urban growth paths for Sydney.

The study assesses three scenarios for the benefits and costs associated with accommodating population growth in Sydney. It considers aspects such as the cost of infrastructure, environmental impacts and 'transformation benefits'.

This report formed an important part of the evidence base for the policy approach in the new Metropolitian area.

A copy of this report can be found through the following link.

http://www.metroplansydney.nsw.gov.au/Portals/0/pdf/AlternativeGrowthPaths.pdf

Carbon price comparisons

15 Dec 2010

This report considers some broad methodological issues involved in comparing carbon prices between countries. A key point to emerge is that price comparisons must have a very clear and well defined purpose or objective. Empirical measures without a clear underlying objective have the potential to be misleading.

There are two broad reasons for comparing carbon prices. Firstly, to contribute to policy dialogues regarding comparable effort, and related to this, issues around the efficiency of different policies and second, to contribute to an understanding of the trade competitiveness effects faced by Australian producers. These different objectives have related but distinct comparative prices associated with them. This report makes a distinction between a ‘shadow’ or implicit carbon price (the price equivalent a range of policy measures, whether or not they are explicitly price based), and an effective price of carbon (the net carbon price faced by industries in purchasing inputs, undertaking activities and selling outputs.

While it is possible to calculate carbon prices for a range of policies, policies cannot be compared on their implicit price alone, and the comparative price does not contain all the information of interest when comparing policies between countries. It is crucial that carbon price comparisons account for the very different properties of different types of greenhouse mitigation policy. Carbon price comparisons should be viewed as a long term activity. There are strong analogies between the need to compare carbon policies between countries and the long standing exercise of comparing protection between countries. The later has important implications for the former.

View report online [pdf, 667KB]

Tillegra Dam - review of socioeconomic analysis

29 Nov 2010

Hunter Water Corporation was seeking approval to construct a 450 gigalitre (GL) dam at Tillegra, near Dungog in the Upper Williams River catchment. The proposal is a project to which Part 3A of the NSW EPA Act applies by virtue of an Order made by the Minister for Planning under section 75B of the Act on 13 November 2007. NSW Planning has engaged the CIE to review the socioeconomic analysis undertaken in relation to the Dam and alternative options.

A copy of the CIE's report can be found through the following link

Energy-efficiency: building code star rating: what's optimal, what's not?

25 Nov 2010

Residential building energy star ratings are widely perceived within the community to be a measure of economic efficiency. A higher star rating is perceived as innately desirable. However, energy efficiency is not economic efficiency. Findings in this report are that, generally it pays to achieve a 5-star rating for new houses. However, above this point, for most houses in Melbourne, Sydney and Brisbane (representing 80 per cent of Australian city residential houses), forcing home owners to build houses with higher star ratings will be detrimental to the community.

To view this report on CIE's website [pdf, 1602KB]

To view this report on the Master Builders Association website, click here

Operating rules for Sydney Water's desalination plant

Oct 2010

Historically, greater Sydney’s raw water supply was largely reliant on its 11 major dams, supplemented by significant water recycling and efficiency programs. In January 2010, the existing supply system was boosted and diversified when Sydney’s desalination plant began operating. The plant can supply 250 megalitres (million litres) of water a day or up to 15 per cent of greater Sydney’s current water needs.

TheCIE was engaged in 2008-09 by the Sydney Water Corporation to assist in establishing the operating rules for the desalination plant. This analysis examined the trade-offs between providing greater security of supply against the costs of providing that particular level of security. It involved reviewing the performance of the desalination plant and the water security outcomes under a wide range of scenarios on future climatic conditions using outputs from the Wathnet hydrology simulation model. Indirect impacts throughout the water supply system were accounted for in the modelling, including the energy costs and emissions associated with alternative sources of supply in the system.

View report online, click here

Review of economic analysis underpinning the proposed Traveston Crossing Dam

Oct 2010

The proposed Traveston Crossing Dam is located in South-East Queensland. The proposed Dam was a key feature of the draft South-East Queensland Water Supply Strategy which aimed to provide a secure and sustainable long term water supply to South-East Queensland. Stage 1 of the Dam was expected to deliver up to 70 000 ML per year for urban water supplies.

TheCIE was engaged in 2009 by the Commonwealth Department of Environment, Water, Heritage and the Arts to conduct a review of the economic analysis underpinning the proposed Dam. The review considered the overall evaluation framework adopted to rank alternative measures to achieve the water security objectives. The analysis also considered the potential impact of changing climatic conditions on the ranking of alternative measures, including desalination facilities.

View report online, click here

2010 Sydney Metropolitan Water Plan

Oct 2010

The first Metropolitan Water Plan (the Plan) was introduced in 2004. The Plan sets out the course of action for the NSW Government to ensure a sustainable and secure water system for the greater Sydney’s people and rivers. Subsequently, the NSW Government reviewed the 2004 Plan and released an updated plan in 2006. The NSW Government recently released the 2010 Metropolitan Water Plan.

TheCIE was engaged by the NSW Office of Water to conduct a cost effectiveness analysis of a range of infrastructure options and other alternative measures (both demand and supply side) that formed the basis for the 2010 Sydney Metropolitan Water Plan. The analysis incorporated social and environmental benefits/costs of all measures into the ranking of the projects. The analysis was conducted in the context of portfolios of different measures, taking account of the interactions between projects. The review examined the performance of alternative portfolios under conditions where there is limited knowledge of possible future events, particularly in relation to climate risk but also including other factors such as project-specific risk. Climate risk analysis was undertaken using disaggregated output from the Sydney Catchment Authorities’ Wathnet hydrology simulation model.

View report online, click here

Pricing principles for recycled water and stormwater

Oct 2010

TheCIE was engaged by the National Water Commission to analyse and propose a set of pricing principles for recycled water and stormwater to assist National Water Initiative (NWI) parties in meeting their commitments. The principles proposed in the report are framed as a guide for state and territory government agencies and regulatory authorities who are undertaking to determine or guide prices for recycled water and stormwater reuse.

The National Water Commission recently released this report which was completed by TheCIE in 2006.

View report online

Congestion pricing interview with BNET 2010

Sep 2010

Congestion pricing is used in a number of cities around the world, such as London and Singapore, but has gained little traction in Australia. In this interview for BNET, Phil Manners, Senior Economist at TheCIE, explores some of the issues surrounding congestion pricing that could see it developed as a practical tool to improve transport in Australian cities.

To listen to an interview with Phil Manners on congestion pricing click here

To view the article online - click here [pdf, 119KB]

Economic benefits of trade facilitation in the Greater Mekong Subregion

20 Aug 2010

TheCIE recently prepared a report on the economic benefits of trade facilitation in the Greater Mekong Subregion (GMS). Commissioned by the Australian Agency for International Development (AusAID) for presentation to the 16th GMS Ministerial Conference in Hanoi, the report discusses the benefits of further progress in trade and transport facilitation for the six countries of the region (Cambodia, China, Lao PDR, Myanmar Thailand, and Vietnam).

The report presents evidence to suggest that integration within the region is playing an important role in the dynamic performance of the Subregion, but that there is scope to expand this role by further reducing the costs of cross-border trade and transport. In most countries there is considerable room for improvement in trade and transport facilitation, and feasible changes could yield significant increases in national incomes. The evidence suggests that complementing infrastructure investments with procedural reforms to reduce costs and delays of cross-border trade could bring about sizeable economic benefits.

View report online [pdf, 347KB]

ABCB Private Bushfires Shelters Consultation RIS release

18 Aug 2010

The Building Code of Australia (BCA) provides nationally consistent, minimum necessary standards for the design and construction of buildings in Australia. The Australian Building Codes Board (ABCB) on behalf of the Australian Government and State and Territory Governments produces and maintains the BCA.

The ABCB commissioned TheCIE to develop a consultation RIS to assess selected options for introducing provisions for private bushfire shelters in the BCA. The key finding of the consultation RIS is that while the option of voluntary construction guidelines would likely generate some net benefits above a status quo market outcome, the development of performance requirements — to which all newly constructed private bushfire shelters will be subject — will likely overcome a greater number of market failures involved in both the status quo and under voluntary construction guidelines. The introduction of performance requirements was found to return the highest benefit to the economy of the three implementation options considered. In addition, the consultation RIS finds that the construction of private bushfire shelters should remain a private decision and not mandated through planning laws. Such a requirement of mandatory construction would be likely to only affect those residents with a lower likelihood of using the shelter (through, for example, a preferred strategy of leaving early) increasing the net costs of the proposed provisions.

The consultation RIS is currently available for public comment through ABCB.

To view the report online click here

ABCB Salinity Consultation RIS release

3 Aug 2010

To view the report online click here

Regulation Impact Statement on illegally logged timber

12 Feb 2010

As part of its election commitments, the Australian Government is looking to develop a regulatory framework to address the environmental, economic and social issues arising from the trade of illegally logged timber. The aim of the proposed framework will be to encourage the sourcing of forest products from sustainable forest practices and to restrict imports to Australia of illegally logged timber and associated products.

The Office of Best Practice Regulation informed the Department of Agriculture Forestry and Fisheries that a Regulation Impact Statement is required to assess the impacts of pursuing two elements of the commitment:

identifying illegally logged timber and restricting its import into Australia
requiring disclosure at point of sale of species, country of origin and any certification.

TheCIE has identified multiple issues associated with developing measures to combat illegal logging, which are summarised in the Issues Paper and the benefits and costs are quantified in the draft Regulation Impact Statement (see press release).

TheCIE final report to the Department can be accessed below, along with the issues paper, the draft Regulation Impact Statement and the responses we have received from interested stakeholders. (The views expressed in submissions are those of the organisations or authors to the submissions — they are not those of TheCIE. TheCIE accepts no responsibility for the contents of these submissions.)

The final report includes some amendments to the draft Regulation Impact Statement. The main changes are the inclusion of a consultation statement (chapter 8), more detail on various estimates of the non-market (social and environmental) costs of illegal logging (appendix C), the addition of a conclusion chapter (chapter 9), and an amended Executive Summary.

For related information on this project see the Department of Agriculture, Fisheries and Forestry's illegal logging page.

View final report online [pdf, 753KB]

View issues paper [pdf, 611KB]

View PDF version of the Draft RIS released 13 October 2009 [pdf, 797KB]

View HTML version of the Draft RIS released 13 October 2009 [htm, 1381KB]

Final Regulation Impact Statement on increased energy efficiency requirements in the Building Code of Australia (BCA 2010)

28 Jan 2010

The Building Code of Australia (BCA) provides nationally consistent, minimum necessary standards for the design and construction of buildings in Australia. The Australian Building Codes Board (ABCB) on behalf of the Australian Government and State and Territory Governments produces and maintains the BCA.

At their meeting of 30 April 2009, the Council of Australian Governments (COAG) reaffirmed its commitment to introducing a comprehensive National Strategy for Energy Efficiency to help households and businesses reduce their energy costs, improve the productivity of the Australian economy and reduce the cost of greenhouse gas abatement under the Carbon Pollution Reduction Scheme (CPRS). As part of this commitment, COAG agreed to increase the energy efficiency requirements of new residential and commercial buildings under the BCA.

The ABCB commissioned TheCIE to develop consultation and final RIS’s that assess the costs and benefits of proposed changes to the energy efficiency provisions in the BCA with regards to commercial and residential buildings. The key findings are that (in all probability) the proposed changes would result in net benefits if applied to commercial buildings, but net costs if applied to residential buildings.

Click here to download the Final RIS documents.