Innovative tools to address drought risk in grazing lands

Drought spells can impose severe impacts in most vulnerable farms. It is well known that uninsured exposure exacerbates income inequality in farming systems. However, high administrative costs of traditional insurance hinder small farmers? access to risk management tools. The existence of moral hazard and systemic risk prevents the implementation of traditional insurance programs to address drought risk in rural areas. Innovative technologies like satellite images are being used to derive vegetation index which are highly correlated with drought impacts. The implementation of this technology in agricultural insurance may help to overcome some of the limitations of traditional insurance. However, basis risk has been identified as one of the main problems that hinder the acceptance of index insurance. In this paper we focus on the analyses of basis risk under different contract options in the grazing lands of the Araucanía region. A vegetation index database is used to develop an actuarial insurance model and estimate risk premiums for moderate and severe drought coverage. Risk premium sharply increases with risk coverage. In contrast with previous findings in the literature, our results are not conclusive and show that lowering the coverage level does not necessarily imply a reduction in basis risk. Further analyses of the relation between contract design and basis risk is a promising area of research that may render an important social utility for most vulnerable farming systems.

Estrategias innovadoras para la gestión del riesgo de sequía en sistemas ganaderos extensivos

La vulnerabilidad de los sistemas ganaderos de pastoreo pone en evidencia la necesidad de herramientas para evaluar y mitigar los efectos de la sequía. El avance en la teledetección ha despertado el interés por explotar potenciales aplicaciones, y está dando lugar a un intenso desarrollo de innovaciones en distintos campos. Una de estas áreas es la gestión del riesgo climático, en donde la utilización de índices de vegetación permite la evaluación de la sequía. En esta investigación, se analiza el impacto de la sequía y se evalúa el potencial de nuevas tecnologías como la teledetección para la gestión del riesgo de sequía en sistemas de ganadería extensiva. Para ello, se desarrollan tres aplicaciones: (i) evaluar el impacto económico de la sequía en una explotación ganadera extensiva de la dehesa de Andalucía, (ii) elaborar mapas de vulnerabilidad a la sequía en pastos de Chile y (iii) diseñar y evaluar el potencial de un seguro indexado para sequía en pastos en la región de Coquimbo en Chile. En la primera aplicación, se diseña un modelo dinámico y estocástico que integra aspectos climáticos, ecológicos, agronómicos y socioeconómicos para evaluar el riesgo de sequía. El modelo simula una explotación ganadera tipo de la dehesa de Andalucía para el período 1999-2010. El método de Análisis Histórico y la simulación de MonteCarlo se utilizan para identificar los principales factores de riesgo de la explotación, entre los que destacan, los periodos de inicios del verano e inicios de invierno. Los resultados muestran la existencia de un desfase temporal entre el riesgo climático y riesgo económico, teniendo este último un periodo de duración más extenso en el tiempo. También, revelan que la intensidad, frecuencia y duración son tres atributos cruciales que determinan el impacto económico de la sequía. La estrategia de reducción de la carga ganadera permite aminorar el riesgo, pero conlleva una disminución en el margen bruto de la explotación. La segunda aplicación está dedicada a la elaboración de mapas de vulnerabilidad a la sequia en pastos de Chile. Para ello, se propone y desarrolla un índice de riesgo económico (IRESP) sencillo de interpretar y replicable, que integra factores de riesgo y estrategias de adaptación para obtener una medida del Valor en Riesgo, es decir, la máxima pérdida esperada en un año con un nivel de significación del 5%.La representación espacial del IRESP pone en evidencia patrones espaciales y diferencias significativas en la vulnerabilidad a la sequía a lo largo de Chile. Además, refleja que la vulnerabilidad no siempre esta correlacionada con el riesgo climático y demuestra la importancia de considerar las estrategias de adaptación. Las medidas de autocorrelación espacial revelan que el riesgo sistémico es considerablemente mayor en el sur que en el resto de zonas. Los resultados demuestran que el IRESP transmite información pertinente y, que los mapas de vulnerabilidad pueden ser una herramienta útil en el diseño de políticas y toma de decisiones para la gestión del riesgo de sequía. La tercera aplicación evalúa el potencial de un seguro indexado para sequía en pastos en la región de Coquimbo en Chile. Para lo cual, se desarrolla un modelo estocástico para estimar la prima actuarialmente justa del seguro y se proponen y evalúan pautas alternativas para mejorar el diseño del contrato. Se aborda el riesgo base, el principal problema de los seguros indexados identificado en la literatura y, que está referido a la correlación imperfecta del índice con las pérdidas de la explotación. Para ello, se sigue un enfoque bayesiano que permite evaluar el impacto en el riesgo base de las pautas de diseño propuestas: i) una zonificación por clúster que considera aspectos espacio-temporales, ii) un período de garantía acotado a los ciclos fenológicos del pasto y iii) umbral de garantía. Los resultados muestran que tanto la zonificación como el periodo de garantía reducen el riesgo base considerablemente. Sin embargo, el umbral de garantía tiene un efecto ambiguo sobre el riesgo base. Por otra parte, la zonificación por clúster contribuye a aminorar el riesgo sistémico que enfrentan las aseguradoras. Estos resultados han puesto de manifiesto que un buen diseño de contrato puede tener un doble dividendo, por un lado aumentar su utilidad y, por otro, reducir el coste del seguro. Un diseño de contrato eficiente junto con los avances en la teledetección y un adecuado marco institucional son los pilares básicos para el buen funcionamiento de un programa de seguro. Las nuevas tecnologías ofrecen un importante potencial para la innovación en la gestión del riesgo climático. Los avances en este campo pueden proporcionar importantes beneficios sociales en los países en desarrollo y regiones vulnerables, donde las herramientas para gestionar eficazmente los riesgos sistémicos como la sequía pueden ser de gran ayuda para el desarrollo. The vulnerability of grazing livestock systems highlights the need for tools to assess and mitigate the adverse impact of drought. The recent and rapid progress in remote sensing has awakened an interest for tapping into potential applications, triggering intensive efforts to develop innovations in a number of spheres. One of these areas is climate risk management, where the use of vegetation indices facilitates assessment of drought. This research analyzes drought impacts and evaluates the potential of new technologies such as remote sensing to manage drought risk in extensive livestock systems. Three essays in drought risk management are developed to: (i) assess the economic impact of drought on a livestock farm in the Andalusian Dehesa, (ii) build drought vulnerability maps in Chilean grazing lands, and (iii) design and evaluate the potential of an index insurance policy to address the risk of drought in grazing lands in Coquimbo, Chile. In the first essay, a dynamic and stochastic farm model is designed combining climate, agronomic, socio-economic and ecological aspects to assess drought risk. The model is developed to simulate a representative livestock farm in the Dehesa of Andalusia for the time period 1999-2010. Burn analysis and MonteCarlo simulation methods are used to identify the significance of various risk sources at the farm. Most notably, early summer and early winter are identified as periods of peak risk. Moreover, there is a significant time lag between climate and economic risk and this later last longer than the former. It is shown that intensity, frequency and duration of the drought are three crucial attributes that shape the economic impact of drought. Sensitivity analysis is conducted to assess the sustainability of farm management strategies and demonstrates that lowering the stocking rate reduces farmer exposure to drought risk but entails a reduction in the expected gross margin. The second essay, mapping drought vulnerability in Chilean grazing lands, proposes and builds an index of economic risk (IRESP) that is replicable and simple to interpret. This methodology integrates risk factors and adaptation strategies to deliver information on Value at Risk, maximum expected losses at 5% significance level. Mapping IRESP provides evidence about spatial patterns and significant differences in drought vulnerability across Chilean grazing lands. Spatial autocorrelation measures reveal that systemic risk is considerably larger in the South as compared to Northern or Central Regions. Furthermore, it is shown that vulnerability is not necessarily correlated with climate risk and that adaptation strategies do matter. These results show that IRESP conveys relevant information and that vulnerability maps may be useful tools to assess policy design and decision-making in drought risk management. The third essay develops a stochastic model to estimate the actuarially fair premium and evaluates the potential of an indexed insurance policy to manage drought risk in Coquimbo, a relevant livestock farming region of Chile. Basis risk refers to the imperfect correlation of the index and farmer loses and is identified in the literature as a main limitation of index insurance. A Bayesian approach is proposed to assess the impact on basis risk of alternative guidelines in contract design: i) A cluster zoning that considers space-time aspects, ii) A guarantee period bounded to fit phenological cycles, and iii) the triggering index threshold. Results show that both the proposed zoning and guarantee period considerably reduces basis risk. However, the triggering index threshold has an ambiguous effect on basis risk. On the other hand, cluster zoning contributes to ameliorate systemic risk faced by the insurer. These results highlighted that adequate contract design is important and may result in double dividend. On the one hand, increasing farmers’ utility and, secondly, reducing the cost of insurance. An efficient contract design coupled with advances in remote sensing and an appropriate institutional framework are the basis for an efficient operation of an insurance program. The new technologies offer significant potential for innovation in climate risk managements. Progress in this field is capturing increasing attention and may provide important social gains in developing countries and vulnerable regions where the tools to efficiently manage systemic risks, such as drought, may be a means to foster development.

Adapting micro-economy of energy corporations to macroeconomy policies aiming at a sustainable economy

Esta Tesis surgió ante la intensidad y verosimilitud de varias señales o “warnings” asociadas a políticas dirigidas a reducir el peso del petróleo en el sector energético, tanto por razones económicas, como geopolíticas, como ambientales. Como tal Tesis se consolidó al ir incorporando elementos novedosos pero esenciales en el mundo petrolífero, particularmente las “tecnologías habilitantes”, tanto de incidencia directa, como el “fracking” como indirecta, del cual es un gran ejemplo el Vehículo Eléctrico (puro). La Tesis se definió y estructuró para elaborar una serie de indagaciones y disquisiciones, que comportaran un conjunto de conclusiones que fueran útiles para las corporaciones energéticas. También para la comprensión de la propia evolución del sector y de sus prestaciones técnicas y económicas, de cara a dar el servicio que los usuarios finales piden. Dentro de las tareas analíticas y reflexivas de la Tesis, se acuñaron ciertos términos conceptuales para explicar más certeramente la realidad del sector, y tal es el caso del “Investment burden”, que pondera la inversión específica (€/W) requerida por una instalación, con la duración del período de construcción y los riesgos tanto tangibles como regulatorios. Junto a ello la Tesis propone una herramienta de estudio y prognosis, denominada “Market integrated energy efficiency”, especialmente aplicable a dicotomías. Tal es el caso del coche térmico, versus coche eléctrico. El objetivo es optimizar una determinada actividad energética, o la productividad total del sector. Esta Tesis propone varias innovaciones, que se pueden agrupar en dos niveles: el primero dentro del campo de la Energía, y el segundo dentro del campo de las corporaciones, y de manera especial de las corporaciones del sector hidrocarburos. A nivel corporativo, la adaptación a la nueva realidad será función directa de la capacidad de cada corporación para desarrollar y/o comprar las tecnologías que permitan mantener o aumentar cuota de mercado. Las conclusiones de la Tesis apuntan a tres opciones principalmente para un replanteamiento corporativo: - Diversificación energética - Desplazamiento geográfico - Beneficiándose de posibles nuevos nichos tecnológicos, como son: • En upstream: Recuperación estimulada de petróleo mediante uso de energías renovables • En downstream: Aditivos orientados a reducir emisiones • En gestión del cambio: Almacenamiento energético con fines operativos Algunas políticas energéticas siguen la tendencia de crecimiento cero de algunos países de la OCDE. No obstante, la realidad mundial es muy diferente a la de esos países. Por ejemplo, según diversas estimaciones (basadas en bancos de datos solventes, referenciados en la Tesis) el número de vehículos aumentará desde aproximadamente mil millones en la actualidad hasta el doble en 2035; mientras que la producción de petróleo sólo aumentará de 95 a 145 millones de barriles al día. Un aumento del 50% frente a un aumento del 100%. Esto generará un curioso desajuste, que se empezará a sentir en unos pocos años. Las empresas y corporaciones del sector hidrocarburos pueden perder el monopolio que atesoran actualmente en el sector transporte frente a todas las demás fuentes energéticas. Esa pérdida puede quedar compensada por una mejor gestión de todas sus capacidades y una participación más integrada en el mundo de la energía, buscando sinergias donde hasta ahora no había sino distanciamiento. Los productos petrolíferos pueden alimentar cualquier tipo de maquina térmica, como las turbinas Brayton, o alimentar reformadores para la producción masiva de H2 para su posterior uso en pilas combustible. El almacenamiento de productos derivados del petróleo no es ningún reto ni plantea problema alguno; y sin embargo este almacenamiento es la llave para resolver muchos problemas. Es posible que el comercio de petróleo se haga menos volátil debido a los efectos asociados al almacenamiento; pero lo que es seguro es que la eficiencia energética de los usos de ese petróleo será más elevada. La Tesis partía de ciertas amenazas sobre el futuro del petróleo, pero tras el análisis realizado se puede vislumbrar un futuro prometedor en la fusión de políticas medioambientales coercitivas y las nuevas tecnologías emergentes del actual portafolio de oportunidades técnicas. ABSTRACT This Thesis rises from the force and the credibility of a number of warning signs linked to policies aimed at reducing the role of petroleum in the energy industry due to economical, geopolitical and environmental drives. As such Thesis, it grew up based on aggregating new but essentials elements into the petroleum sector. This is the case of “enabling technologies” that have a direct impact on the petroleum industry (such as fracking), or an indirect but deep impact (such as the full electrical vehicle). The Thesis was defined and structured in such a way that could convey useful conclusions for energy corporations through a series of inquiries and treatises. In addition to this, the Thesis also aims at understating la evolution of the energy industry and its capabilities both technical and economical, towards delivering the services required by end users. Within the analytical task performed in the Thesis, new terms were coined. They depict concepts that aid at explaining the facts of the energy industry. This is the case for “Investment burden”, it weights the specific capital investment (€/W) required to build a facility with the time that takes to build it, as well as other tangible risks as those posed by regulation. In addition to this, the Thesis puts forward an application designed for reviewing and predicting: the so called “Market integrated energy efficiency”, especially well-suited for dichotomies, very appealing for the case of the thermal car versus the electric car. The aim is to optimize energy related activity; or even the overall productivity of the system. The innovations proposed in this Thesis can be classified in two tiers. Tier one, within the energy sector; and tier two, related to Energy Corporation in general, but with oil and gas corporations at heart. From a corporate level, the adaptation to new energy era will be linked with the corporation capability to develop or acquire those technologies that will yield to retaining or enhancing market share. The Thesis highlights three options for corporate evolution: - diversification within Energy - geographic displacement - profiting new technologies relevant to important niches of work for the future, as: o Upstream: enhanced oil recovery using renewable energy sources (for upstream companies in the petroleum business) o Downstream: additives for reducing combustion emissions o Management of Change: operational energy storage Some energy policies tend to follow the zero-growth of some OECD countries, but the real thing could be very different. For instance, and according to estimates the number of vehicles in use will grow from 1 billion to more than double this figure 2035; but oil production will only grow from 95 million barrel/day to 145 (a 50% rise of versus an intensification of over a 100%). Hydrocarbon Corporation can lose the monopoly they currently hold over the supply of energy to transportation. This lose can be mitigated through an enhanced used of their capabilities and a higher degree of integration in the world of energy, exploring for synergies in those places were gaps were present. Petroleum products can be used to feed any type of thermal machine, as Brayton turbines, or steam reformers to produce H2 to be exploited in fuel cells. Storing petroleum products does not present any problem, but very many problems can be solved with them. Petroleum trading will likely be less volatile because of the smoothing effects of distributed storage, and indeed the efficiency in petroleum consumption will be much higher. The Thesis kicked off with a menace on the future of petroleum. However, at the end of the analysis, a bright future can be foreseen in the merging between highly demanding environmental policies and the relevant technologies of the currently emerging technical portfolio.

Discrete Multi-Criteria Methods for lands use and conservation planning on La Colacha in Arroyos Menores (Río Cuarto, Province of Córdoba, Argentina)

The study area is La Colacha sub-basins from Arroyos Menores basins, natural areas at West and South of Río Cuarto in Province of Córdoba of Argentina, fertile with loess soils and monsoon temperate climate, but with soil erosions including regressive gullies that degrade them progressively. Cultivated gently since some hundred sixty years, coordinated action planning became necessary to conserve lands while keeping good agro-production. The authors had improved data on soils and on hydrology for the study area, evaluated systems of soil uses and actions to be recommended and applied Decision Support Systems (DSS) tools for that, and were conducted to use discrete multi-criteria models (MCDM) for the more global views about soil conservation and hydraulic management actions and about main types of use of soils. For that they used weighted PROMETHEE, ELECTRE, and AHP methods with a system of criteria grouped as environmental, economic and social, and criteria from their data on effects of criteria. The alternatives resulting offer indication for planning depending somehow on sub basins and on selections of weights, but actions for conservation of soils and water management measures are recommended to conserve the basins conditions, actually sensibly degrading, mainly keeping actual uses of the lands.

Approach to the potential production of giant reed in surplus saline lands of Spain

Growing energy crops on marginal land has been promoted as a way of ensuring that biomass production involves an acceptable and sustainable use of land. Saline and saline-prone agricultural lands represent an opportunity for growing energy crops avoiding the displacement of food production and contributing to restoration of degraded land. Giant reed (Arundo donax L.) is a perennial grass that has been proposed as a promising energy crop for lignocellulosic biomass production while its tolerance to salinity has been proved. In this work, the identification of surplus saline lands that could be irrigated with saline waters for growing tolerant-energy crops (giant reed) in the mainland of Spain and the assessment of the agronomically attainable yield in these limiting growing conditions were undertaken. To this purpose, a GIS analysis was conducted using geodatabases related to saline areas, agro-climatic conditions, irrigation water requirements, agricultural land availability, restrictions regarding the range of electrical conductivity tolerated by the crop, competition with agro-food crops and irrigation water provisions. According to the approach developed, the irrigated and saline agricultural area available and suitable for biomass production from giant reed amounted up to 34 412 ha. The agronomically attainable yield in these limiting conditions was estimated at 12.7 – 22.2 t dm ha−1 yr−1 and the potential production of lignocellulosic biomass, 597 338 t dm yr−1. The methodology followed in this study can be applied to other target regions; it allows the identification of this type of marginal lands, where salinity-tolerant plant species could be grown for bioenergy purposes, avoiding competition with agro-food crops, and where soil restoration measurements should be undertaken.

Induced Damping on Vibrating Circular Plates Submerged in still Fluid

When a structure vibrates immersed in a fluid it is known that the dynamic properties of the system are modified. The surrounding fluid will, in general, contribute to the inertia, the rigidity and the damping coefficient of the coupled fluid-structure system. For light structures, like spacecraft antennas, even when the fluid is air the contribution to the dynamic properties can be important. For not so light structures the ratio of the equivalent fluid/structure mass and rigidity can be very small and the fluid contribution could be neglected. For the ratio of equivalent fluid/structure damping both terms are of the same order and therefore the fluid contribution must be studied. The working life of the spacecraft structure would be on space and so without any surrounding fluid. The response of a spacecraft structure on its operational life would be attenuated by the structural damping alone but when the structure is dynamically tested on the earth the dynamic modal test is performed with the fluid surrounding it. The results thus are contaminated by the effects of the fluid. If the damping added by the fluid is of the same order as the structural damping the response of the structure in space can be quite different to the response predicted on earth. It is therefore desirable to have a method able to determine the amount of damping induced by the fluid and that should be subtracted of the total damping measured on the modal vibration test. In this work, a method for the determination of the effect of the surrounding fluid on the dynamic characteristics of a circular plate has been developed. The plate is assumed to vibrate harmonically with the vacuum modes and the generalized forces matrix due to the fluid is thus computed. For a compressible fluid this matrix is formed by complex numbers including terms of inertia, rigidity and damping. The matrix due to the fluid loading is determined by a boundary element method (BEM). The BEM used is of circular rings on the plate surface so the number of elements to obtain an accurate result is very low. The natural frequencies of the system are computed by an iteration procedure one by one and also the damping fluid contribution. Comparisons of the present method with various experimental data and other theories show the efficiency and accuracy of the method for any support condition of the plate.