Roy Brouwer: another economist who doesn't only talk about economics

I just came back from ANU where Roy Brouwer gave a presentation on "Water as an economic good: The role of water economics and water values in European water policy" in the Crawford School for Economics and Government.

Brouwer's name is familiar to people who are in the field of non-market valuation, particularly benefit transfer/meta-analysis. I cited his work at least five times in my dissertation. So I was very happy to finally meet him in person.

It turns out Brouwer was invited by CSIRO's Water for a healthy country flagship to conduct a meta-analysis on Australian studies on value of water (or should I say price) for three months and he will be back to Netherlands in two weeks. So good job in catching him, Crawford school and Jeff Bennett in particular(whom I was also happy to finally meet and had a discussion about Muti-criteria decision analysis) !

My overall impression of Brouwer's presentation is that he is another economist who doesn't only talk about economics. In fact within 40 minutes he probably talked more about the role of economics in the EU Water Framework Directive and how he managed to work with modelers in developing an integrated hydro-economic model.

"This is all feels at home!" I said to myself. Back in the Gund Institute, this is exactly what people have been doing for the past 5~10 years. However the biggest challenge is that there always a mismatch between ecological and economic information, e.g. units of valuation and scales. Contingent Valuation results are normally expressed in per household per year and ecological data, on the other hand, tend to be measured in a shorter period and they usually don't have per household included.

The scale issue is more troublesome. CV studies are usually conducted at smaller spatial scale (local) compared to that of many hydrological processes (regional). Usually there is a decay function, where people are willing to pay less as they are further away from an ecosystem service (but there are services provided at global level, e.g. existence value of Amazon forest, to use Rrouwer's example in the Q&A part of his presentation.

My question to him was naturally how to deal with this mismatch challenge. His answer basically could be boiled down to "be proactive." He did CVs at both local and national scales. Also he ran bunch of benefit transfer tests. Sounds good only not everybody has the luxury of running studies at multiple scales...How to integrate economic information in an ex post environment, aka, benefit transfer, especially with systematic modeling remains to be a challenge.

Brouwer only had time to briefly touched on another question I am getting more and more interested in, which is the role of risk and uncertainty in decision making. Luckily he just published a paper in that dimension in "Environmental modelling & Software" (Vol 23 (7) Pg 922-).

Also there is going to soon be a special issue in Ecological Economics (here it is the link) about the hydro-economic work he has been doing. I look forward to reading both and hopefully he will be able to join us in Beijing this Oct (details about that later).