Over the last 10 years in the farming operations that make up a substantial portion of my client base, the foundations of the decisions being made have been radically altered by the rapidly increasing cost of water.
Water productivity is a now common term, coined to describe the relativity of the return per unit of water used to grow differing crops.
Water is now a capital item, traded independently of the farming operations to which it was originally attached.
Is it too long a stretch to consider other productive inputs in a similar light?.
Electricity is produced by coal burning power stations, and is used in a variety of ways from domestic lighting to powering industrial manufacturing. What would happen if we started to make decisions about the power usage in the same manner we make decisions about weather we grow rice or stone fruit, by the value of the output for a unit of productivity of the base input, power, or water.
Decisions would then be made about the relative value of lighting an office block at night, and making another container load of widgets. Simplistic, but you get the point.
It may be a dumb notion, to be considering the relative value of the output per unit of electrical power used, but 25 years ago, so was considering which crop to plant based on the relative value of the output per unit of water.
The current debate about the fmanagement of greenhouse gas production, the balance between its total environmental and economic costs of production and the value of its use, and how that is to be integrated into a sensible economic framework has a long way to go despite politically motivated noises of certainty emerging from Canberra. As with most unknowns, it should evolve with experiment, and we should be hoping that the rules put in place now to satisfy expediency do not have an adverse impact on that evolution.
However, water is still a political and economic mess, so expecting the carbon debate to be any better will be a very big ask indeed.
StrategyAudit 