Governments and the private sector are constantly required to maximise the benefits from the limited resources at their disposal and justify their decisions. Economics plays a critical role in ensuring that limited resources are put to best use.
Whether assessing new major investments, managing existing assets and programs, or reforming policy, good economic analysis can help clearly define problems and assess potential solutions.
Aither’s team of economists are passionate about applying their skills and expertise to real-world problems.
We deliver high-quality, evidence-based advice to inspire and enable positive change and improve decision making by:
- Understanding the questions our clients are trying to answer and the relevant context
- Applying the latest economic techniques
- Taking a flexible and collaborative approach
- Communicating economics in a way that can be widely understood.
Aither are experts in economic and financial investment appraisal, including cost-benefit analysis and cost-effectiveness analysis. We are able to quantify the full range of economic, social and environmental benefits and costs using market and non-market valuation techniques. Our investment appraisals are robust and evidence-based and help to demonstrate the merits of different investment options. We prepare business cases that are clear, compelling and supported by sound investment logic.
Investment and policy decision making is challenging. There are often numerous options available to address a problem or realise an opportunity, multiple sources of uncertainty, a variety of tangible and intangible benefits and costs and complex stakeholder considerations. Aither draws on the latest methods in economics and data science to provide clear and actionable evidence for decision makers. Our economic analysis is improving the timing and scale of investments and policy decision making, resulting in better customer and community outcomes.
Aither understands the complexities of economic regulation frameworks and what mechanisms are required to ensure the most appropriate outcomes can be realised. Different frameworks may be necessary for different jurisdictions and/or circumstances.
Aither works with utilities to prepare for new regulatory frameworks and to review and improve pricing and cost recovery arrangements. We also advise regulators and government on potential options for new regulatory frameworks or mechanisms.
Aither are international leaders in market design and analysis, working across natural resource markets such as water and biodiversity. We provide advice on when to introduce markets and how to design markets to achieve the best outcomes for communities. Aither are also experts in market trends and predictions, as well as the impacts of drivers, such as commodity prices, government policies and climate change. Our analysis is backed by advanced quantitative tools and a detailed understanding of natural resource markets.
As the commercial opportunities associated with water markets and infrastructure expand, there is a growing need for rigorous advice grounded in a practical understanding of water markets and infrastructure. Aither are leading providers of commercial advice including:
• Portfolio valuations
• Portfolio strategy
• Due diligence
Selected Project Experience
Optimisation of beach management in Queensland
Aither was engaged (with BMT) by the Sunshine Coast Council to assess adaptation strategies for the Maroochydore Beach related to the timing and scale of beach nourishment and seawall construction. We used an integrated physical and economic model of Maroochydore Beach combined with a sophisticated optimisation technique to assess multiple beach management strategies against numerous climate-drive futures. The assessment found that the current management strategy is delivering significant benefits, however, the optimal management strategy could generate about $15 million of additional net benefits.
Amenity valuation in Victoria
Aither was engaged by Infrastructure Victoria to estimate the value of amenities across Victoria. This involved using hedonic pricing, a non-market valuation technique, to estimate how proximity to amenities affects house prices. A web-based tool was developed to allow users to generate customised estimates of the value of amenities to support the cost-benefit analysis of projects that affect amenities and inform value capture. The tool has subsequently been deployed throughout the Victorian Public Service.
Evaluation of the Regional Growth Fund
Aither was engaged to undertake a full-term evaluation and cost-benefit analysis of $99 million invested through the Regional Growth Fund of the Regional Growth Fund (RGF). This included cost-benefit analysis of a number of regional infrastructure investments, including community, recreational and creative projects, requiring non-market valuations and practical approaches to revealing the data and values required to assist decision makers.
Aither received a ten out of ten from the RDV project manager for this engagement. Specific feedback included: “Aither are great economists, but have a pragmatic approach, this is the service difference”.
South Australia Bushfire Risk Visualisation Initiative Business Case
The South Australian Fire and Emergency Services Commission (SAFECOM) engaged Aither in partnership with the University of Adelaide to develop a Proof of Concept (PoC) of a 3D bushfire visualisation tool, and prepare a business case, to understand the potential for long term improvement in communicating and understanding hazard risk for South Australia. The business case identified the benefits, investment and actions required to realize these benefits.
Economic analysis of the value of floodplain harvesting in the northern NSW Murray-Darling Basin
The NSW Government is establishing a regulatory framework for flood water harvesting which will return floodplain harvesting to back to legal limits, in line with the NSW Floodplain Harvesting Policy, floodplain management plans, water sharing plans and controls on water capture. Aither was engaged to estimate the economic value of floodplain harvesting within legal limits. Aither’s analysis estimated the direct value of floodplain harvesting within legal limits for agricultural production for individuals. It also drew upon REMPLAN analysis to estimate impacts to the broader regional economy.
2020 Price Review – Review of Goulburn-Murray Water’s proposed expenditure and tariff reform for the Essential Services Commission
Aither was engaged by the Essential Services Commission (ESC) to undertake a review of Goulburn-Murray Water’s (GMW) forecast capital and operating expenditure and proposed tariff reform for the upcoming 2020 to 2024 regulatory period. The process included assessing the appropriateness of GMW’s proposed capital and operating expenditure and reviewing the cost drivers underpinning GMW’s proposed tariff reform of its irrigation delivery infrastructure charges, water storage charges and its service point charges to ensure the proposed tariff reforms were cost reflective. Aither’s review informed the ESC’s 2020 determination on the allowable prudent and efficient expenditure for GMW (underpinning the approved revenue requirement) and assisted the ESC to ensure that GMW’s proposed tariffs met the requirements of the relevant ACCC and WIRO pricing principles. Aither’s expenditure review report, tariff review report and supplementary service point report are available here.
Economic analysis of water allocation mechanisms in New Zealand
Aither was engaged (with Land Water People) by the New Zealand government to model the benefits of different water allocation mechanisms, including water trade. This involved a comprehensive analysis accounting for thousands of catchments across the country, and significant hydrological and economic complexity. The project has helped the New Zealand government develop a pathway for rural water reform, with our modelling suggesting the potential for billions of dollars in gains.
Strengthening Victoria’s urban water sector
Aither was engaged by VicWater to investigate the water sector’s ability to maintain or improve services and outcomes, while continuing to address affordability and price concerns under the existing economic model or framework guiding the industry. The project entails providing a clear an independent assessment of these challenges and to unite the sector around a set of long-term opportunities to improve outcomes for customers and the Victorian community. It includes modelling the economic impacts of future challenges, and the potential benefits and impacts from options and solutions in response. The project was to assist VicWater and its utility members in improving their own performance as well as identify improvements that could be made to policy and regulation.
Commercial and pricing arrangements for the Water for Lockyer project
Seqwater engaged Aither to identify and assess, pricing mechanisms and commercial terms available to Seqwater to recover costs from prospective customers. The pricing mechanisms were assessed in the context of National Water Initiative pricing principles, Seqwater’s corporate objectives and the risks associated with the prospective project. Aither considered these factors in providing recommendations to Seqwater on how costs should be allocated to the Water for Lockyer entity or other parties and reflected in prices. The outputs of this engagement were designed to inform Seqwater’s negotiations with the Water for Lockyer stakeholders.