Cost Sharing Mechanisms for Business Clusters with Strategic Firms

A business cluster is a co-located group of micro, small, medium scale enterprises. Such firms can benefit significantly from their co-location through shared infrastructure and shared services. Cost sharing becomes an important issue in such sharing arrangements especially when the firms exhibit strategic behavior. There are many cost sharing methods and mechanisms proposed in the literature based on game theoretic foundations. These mechanisms satisfy a variety of efficiency and fairness properties such as allocative efficiency, budget balance, individual rationality, consumer sovereignty, strategyproofness, and group strategyproofness. In this paper, we motivate the problem of cost sharing in a business cluster with strategic firms and illustrate different cost sharing mechanisms through the example of a cluster of firms sharing a logistics service. Next we look into the problem of a business cluster sharing ICT (information and communication technologies) infrastructure and explore the use of cost sharing mechanisms.

Barriers to plantation activities in different agro-ecological zones of Southern India

This paper analyses environmental and socio-economic barriers for plantation activities on local and regional level and investigates the potential for carbon finance to stimulate the increased rates of forest plantation on wasteland, i.e., degraded lands, in southern India. Building on multidisciplinary field work and results from the model GCOMAP, the aim is to (1) identify and characterize the barriers to plantation activities in four agro-ecological zones in the state of Karnataka and (2) investigate what would be required to overcome these barriers and enhance the plantation rate and productivity. The results show that a rehabilitation of the wasteland based on plantation activities is not only possible but also anticipated by the local population and would lead to positive environmental and socio-economic effects at a local level. However, in many cases, the establishment of plantation activities is hindered by a lack of financial resources, low land productivity and water scarcity. Based on the model used and the results from the field work, it can be concluded that certified emission reductions such as carbon credits or other compensatory systems may help to overcome the financial barrier; however, the price needs to be significantly increased if these measures are to have any large-scale impact.

Groundwater Management in India:Physical, Institutional and Policy Alternatives

Groundwater constitutes a vital natural resource for sustaining India’s agricultural economy and meeting the country’s social, ecological and environmental goals. It is a unique resource, widely available, providing security against droughts and yet it is closely linked to surface-water resources and the hydrological cycle. Its availability depends on geo-hydrological conditions and characteristics of aquifers, from deep to alluvium, sediment crystalline rocks to basalt formations; and agro-climate from humid to subhumid and semi-arid to arid. Its reliable supply, uniform quality and temperature, relative turbidity, pollution-safe, minimal evaporation losses, and low cost of development are attributes making groundwater more attractive compared to other resources. It plays a key role in the provision of safe drinking water to rural populations. For example, already almost 80% of domestic water use in rural areas in India is groundwater-supplied, and much of it is being supplied to farms, villages and small towns. Inadequate control of the use of groundwater, indiscriminate application of agrochemicals and unrestrained pollution of the rural environment by other human activities make groundwater usage unsustainable, necessitating proper management in the face of the twin demand for water of good quality for domestic supply and adequate supply for irrigation, ensuring equity, efficiency and sustainability of the resource. Groundwater irrigation has overtaken surface irrigation in the early 1980s, supported by well energization. It is estimated that there are about 24 million energised wells and tube wells now and it is driven by demand rather than availability, evident through the greater occurrence of wells in districts with high population densities. Apart from aquifer characteristics, land fragmentation and landholding size are the factors that decide the density of wells. The ‘rise and fall’ of local economies dependent on groundwater can be summarized as: the green revolution of 1980s, groundwaterbased agrarian boom, early symptoms of groundwater overdraft, and decline of the groundwater socio-ecology. The social characteristics and policy interventions typical of each stage provide a fascinating insight into the human-resource dynamics. This book is a compilation of nine research papers discussing various aspects of groundwater management. It attempts to integrate knowledge about the physical system, the socio-economic system, the institutional set-up and the policy environment to come out with a more realistic analysis of the situation with regard to the nature, characteristics and intensity of resource use, the size of the economy the use generates, and the negative socioeconomic consequences. Complex variables addressed in this regard focusing on northern Gujarat are the stock of groundwater available in the region, its hydrodynamics, its net outflows against inflows, the economics of its intensive use (particularly irrigation in semi-arid and arid regions), its criticality in the regional hydroecological regime, ethical aspects and social aspects of its use. The first chapter by Dinesh Kumar and Singh, dwells on complex groundwater socio-ecology of India, while emphasizing the need for policy measures to address indiscriminate over-exploitation of dwindling resources. The chapter also explores the nature of groundwater economy and the role of electricity prices on it. The next chapter on groundwater issue in north Gujarat provides a description of groundwater resource characteristics followed by a detailed analysis of the groundwater depletion and quality deterioration problems in the region and their undesirable consequences on the economy, ecosystem health and the society. Considering water-buyers and wellowning farmers individually, a methodology for economic valuation of groundwater in regions where its primary usage is in agriculture, and as assessment of the groundwater economy based on case studies from north Gujarat is presented in the fourth chapter. The next chapter focuses on the extent of dependency of milk production on groundwater, which includes the water embedded in green and dry fodder and animal feed. The study made a realistic estimate of irrigation water productivity in terms of the physics and economics of milk production. The sixth chapter analyses the extent of reduction in water usage, increase in yield and overall increase in physical productivity of alfalfa with the use of the drip irrigation system. The chapter also provides a detailed synthesis of the costs and benefits associated with the use of drip irrigation systems. A linear programmingbased optimization model with the objective to minimize groundwater use taking into account the interaction between two distinct components – farming and dairying under the constraints of food security and income stability for different scenarios, including shift in cropping pattern, introduction of water-efficient crops, water- saving technologies in addition to the ‘business as usual’ scenario is presented in the seventh chapter. The results show that sustaining dairy production in the region with reduced groundwater draft requires crop shifts and adoption of water-saving technologies. The eighth chapter provides evidences to prove that the presence of adequate economic incentive would encourage farmers to adopt water-saving irrigation devices, based on the findings of market research with reference to the level of awareness among farmers of technologies and the factors that decide the adoption of water-saving technologies. However, now the marginal cost of using electricity for agricultural pumping is almost zero. The economic incentives are strong and visible only when the farmers are either water-buyers or have to manage irrigation with limited water from tube-well partnerships. The ninth chapter explores the socio-economic viability of increasing the power tariff and inducing groundwater rationing as a tool for managing energy and groundwater demand, considering the current estimate of the country’s annual economic loss of Rs 320 billion towards electricity subsidy in the farm sector. The tenth chapter suggests private tradable property rights and development of water markets as the institutional tool for achieving equity, efficiency and sustainability of groundwater use. It identifies the externalities for local groundwater management and emphasizes the need for managing groundwater by local user groups, supported by a thorough analysis of groundwater socio-ecology in India. An institutional framework for managing the resource based on participatory approach that is capable of internalizing the externalities, comprising implementation of institutional and technical alternatives for resource management is also presented. Major findings of the analyses and key arguments in each chapter are summarized in the concluding chapter. Case studies of the social and economic benefits of groundwater use, where that use could be described as unsustainable, are interesting. The benefits of groundwater use are outlined and described with examples of social and economic impacts of groundwater and the negative aspects of groundwater development with the compilation of environmental problems based on up-to-date research results. This publication with a well-edited compilation of case studies is informative and constitutes a useful publication for students and professionals.

Tar characterisation in new generation agro-residue gasifiers - Cyclone and downdraft open top twin air entry systems

This paper deals with the characterisation of tar from two configurations of bioresidue thermochemical conversion reactors designed for producer gas based power generation systems. The pulverised fuel reactor is a cyclone system (R1) and the solid bioresidue reactor (denoted R2) is an open top twin air entry system both at 75-90 kg/h capacity (to generate electricity similar to 100 kVA). The reactor, R2, has undergone rigorous test in a major Indo-Swiss programme for the tar quantity at various conditions. The former is a recent technology development. Tars collected from these systems by a standard tar collection apparatus at the laboratory at Indian Institute of Science have been analysed at the Royal Institute of Technology (KTH), Sweden. The results of these analyses show that these thermochemical conversion reactors behave differently from the earlier reactors reported in literature in so far as tar generation is concerned. The extent of tar in hot gas is about 700-800 ppm for R1 and 70-100 ppm for R2. The amounts of the major compounds - naphthalene and phenol-are much lower that what is generally understood to happen in the gasifiers in Europe. It is suggested that the longer residence times at high temperatures allowed for in these reactors is responsible for this behavior. It is concluded the new generation reactor concepts extensively tried out at lower power levels hold promise for high power atmospheric gasification systems for woody as well as pulverisable bioresidues.

Cultivation of Pleurotus spp. on a combination of anaerobically digested plant material and various agro-residues

Two species of Pleurotus, Pleurotus florida and Pleurotus flabellatus were cultivated on two agro-residues (paddy straw; PS and coir pith; CP) singly as well as in combination with biogas digester residue (BDR, main feed leaf biomass). The biological efficiency, nutritional value, composition and nutrient balance (C, N and P) achieved with these substrates were studied. The most suitable substrate that produced higher yields and biological efficiency was PS mixed with BDR followed by coir pith with BDR. Addition of BDR with agro-residues could increase mushroom yield by 20-30%. The biological efficiency achieved was high for PS + BDR (231.93% for P. florida and 209.92% for P. flabellatus) and for CP + BDR (14831% for P. florida and 188.46% for P. flabellatus). The OC (organic carbon), TKN (nitrogen) and TP (phosphate) removal of the Pleurotus spp. under investigation suggests that PS with BDR is the best substrate for growing mushroom. (C) 2015 Published by Elsevier Inc. on behalf of International Energy Initiative.

A mean-reverting stochastic model for the political business cycle

In this article, we look at the political business cycle problem through the lens of uncertainty. The feedback control used by us is the famous NKPC with stochasticity and wage rigidities. We extend the New Keynesian Phillips Curve model to the continuous time stochastic set up with an Ornstein-Uhlenbeck process. We minimize relevant expected quadratic cost by solving the corresponding Hamilton-Jacobi-Bellman equation. The basic intuition of the classical model is qualitatively carried forward in our set up but uncertainty also plays an important role in determining the optimal trajectory of the voter support function. The internal variability of the system acts as a base shifter for the support function in the risk neutral case. The role of uncertainty is even more prominent in the risk averse case where all the shape parameters are directly dependent on variability. Thus, in this case variability controls both the rates of change as well as the base shift parameters. To gain more insight we have also studied the model when the coefficients are time invariant and studied numerical solutions. The close relationship between the unemployment rate and the support function for the incumbent party is highlighted. The role of uncertainty in creating sampling fluctuation in this set up, possibly towards apparently anomalous results, is also explored.