Investment analyses for the Managing Climate Variability Program

Abstract

The Managing Climate Variability Program (MCVP) managed by Land and Water Australia (LWA) is scheduled to be completed by June 2007. In accord with LWA policy, the impact of the program required assessment and the impacts subjected to a cost benefit analysis (CBA). At the same time, prospective analyses were required to demonstrate potential benefits from new investment in a second phase of MCVP that would commence later in 2007. Four impact analyses were carried out, all including a cost benefit analysis. The first two were analyses of historical investments. The second two were prospective investments that could be considered for future investment by MCVP. The four analyses were: 1. Investment Performance of the Managing Climate Variability Program 2. Example of Analysis of a Natural Resource Management Impact 3. Prospective Analysis of Increased Forecast Skill 4. Prospective Analysis of Further Investment in Yield Prophet Assumptions for valuing benefits were made in a consistently conservative manner in all four analyses. Sensitivity analyses were conducted for those variables that were thought to be uncertain or key drivers of the investment criteria. Ratings were given to the confidence in each analysis. The ratings included one for the coverage of benefits and a second for the degree of certainty in the assumptions.