17. Getting closer to the technological frontier –
the free lunches available
agriculture
Wef
hotels
fhrc
water use per guest per day
0
100
200
300
400
500
600
700
800
900
Castell Malgwyn
Country Estate
Hotel
Henllys (old
courthouse)
Penbontbren
Farm Hotel
Gwydyr Hotel Falcondale
Mansion Hotel
Hafod Country
House
Neuadd;as
Guest House
hotel
before
after
Case study on
cotton production
Case study on
irrigation
efficiency
China almost 75 percent of the gap between predicted demand
and supply could be closed with measures offering
payback time of 3 years or less.
18. fhrc
Getting closer to the technological frontier
0
10
20
30
40
50
60
70
80
90
deterministic stochastic
Eastern Europe
Asia
Africa
Latin America
North America
Western Europe and Oceania
23. Changing what?
• Policy
• Behaviour
• Power: what works? How does it work?
• The use of power requires rules; what rules?
• Components of power – signal, incentive, compliance
fhrc
24. Economic instruments as power
• Exchange
• Voluntary = equal power to each party
• Requires potential gain to each party
• Markets
• Prices/subsidies
fhrc
Caution: in water management, prices are sometimes
ineffective in changing behaviour
25. From vision to action
• Dabo: better tools/techniques
• Elena: adoption of more efficient technologies
• Ruth: knowledge transfer to push near the technological frontier
• Luis: adapt to variability
Notas del editor
Very simple abstract system
For example, the value of A at time t depends upon the values of A and E in the previous time interval
At = 0.6*At-1 + 0.4*Et-1
And so on
See that when the values of all five components equal 0, the system will be stable, there will be no further changes
Start all five components with the value of 1 and run – get damped oscillation with the values of all five components tending towards zero.
To illustrate the effect the value of A in time interval 20 is first reduced by 100. The same thing is then done instead for B, C, D and E.
What can be seen is that the patterns, the way that shock propagates through the system, is quite different depending upon the initial point of occurrence.
So, too, is the total effect of the shock: the absolute area under the curve and the time taken to return to near the starting states.
One consequence is that all direct damages may not have the same effect; for example, the loss of €10 million in damages to bakeries might result in the shock being propagated in a different way through the system than if €10 million of damages had been done to flour mills or the producers of bakers’ yeast.
This a system about which everything is known, don’t have to estimate anything either the functional forms of relationships or the values of coefficients
Changing the value of a coefficient can have a major effect, it was difficult to get a system which behaved like expectations of economists – one that tended towards a stable state