Rational Resource Economics
The economics of environment and engineering
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Here are some of the resource economic models I've been involved in building over the years. Get in touch with me if some of them catches your interest.

Waste Management: SWEEP

SWEEP (Solid Waste Economically Efficient Planning) is a tool for investment planning and feasibility and cost/benefit analysis in the solid waste sector. SWEEP can help you analyse costs and environmental impacts from using different treatment technologies, collection options and transport patterns now as well as in the future.

With the tool you will get both an excellent overview and a detailed break-down of all contributions to costs and environmental impacts that stems from your waste stream. The definition of system boundaries are generic, so it is up to the user of the tool to decide the scope and level of detail to be modelled.

The tool tries to cater both to economists doing financial and cost/benefit analysis, as well as environmental engineers caring about Life Cycle Assessment (LCA). The data inputs and output breakdowns are strongly rooted in the engineering aspects of treatment and collection technologies, making it easy for mechanical engineers to provide and assess input, assumptions and results of the analysis.

SWEEP works by performaing a minimisation of costs stemmeing from collection, transport, transfer, treatment and final disposal of waste or recycling of recoverd materials. Optionally, external cost and taxes may be added as well depending on the aim of the analysis. The optimisation is constrained by mass balances of the waste flows, treatment plant capacities. Additionally, the aging and investment dynamics of the treatment assets and possible environmental constraints can be added.

By using optimisation to find a minimum cost solution within the constraints, SWEEP ensures that comparison between the different options analysed is fair and neutral. SWEEP is thus very well suited to analyse the economic and environmental consequences of different technical and political approaches to balancing economic costs and environmental impacts in waste management systems. SWEEP and its predecessors has been used in (among others) the following projects:

  • Egypt National Solid Waste Management Plan, where possible locations for transfer stations and treatment plants as well as options for either landfills or sorting plants were carried out for the Gharbya and Kafr-El-Sheik provinces. The analysis idenfied both cost impacts and carbon footprints of the different options.
  • Analysis of integrated sustems for presorting, transport and centralised sorting of dry materials, where possible locations and plant technology and collection options for pre-sorting facilities, transfer stations and centralised sorting plants were analysed for 47 municipalities on the Danish island of Sealand.
  • Municipal solid waste planning - advantages and disadvantages of liberalisation, where the potential consolidation over time of smaller Danish incineration and deposit plants into larger facilities might provide cost savings due to increased reliance on economics of scale.

Water / Food / Energy Nexus: WHAT-IF

WHAT-IF (Water / Hydropower / Agriculture Tool for Investment and Financing) is a tool for investment planning and feasibility analysis within river basin management.

This tool will model the impact of investments in water infrastructure such as reservoirs, hydropower turbines, canals and irrigation, but also in other energy infrastructure which may have positive synergies with hydropower and reservoirs. The strength of WHAT-IF is that it will thoroughly analyse both postivie and negative synergies between different types of infrastructure.

This has proven very useful in transboundary water basin settings, where the actions of upstream countries can easily affect the possibilities of the downstream countries both with respect to timing and quantity of water use.

WHAT-IF tries to combine the most useful features from water basin management models such as WEAP with agricultural economic features from models such as IFRI's IMPACT (e.g. yield water response), and energy system features (peak and base load) from models such as e.g. OSeMOSYS. Additionally, as an optimisation mode WHAT-IF lends itself easily to cost/benefit and financial analysis.

It is quite on purpose that WHAT-IF caters to experts within water, agriculture, energy and economics. In many cases, these sectors 'compete' for the water (in the most difficult cases, the competition may even be transboundary), so having all sectors well represented within the same model is much more likely to foster respectful and open multi-disciplinary dialogue on how to use the scarce water resources. WHAT-IF has been used in (among others) the follwing river basins:

  • The Yellow River, where it was used to assess refurbishment of the existing canal system in a large irrigation area near Bayannur near the Mongolian border in the middle section of the river.
  • The Zambezi River, where the Zambezi River Commission analysed a multitude of investment projects in irrigation, water supply and and hydropower.
  • Syr Darya in the Aral Sea basin, where the Kazakh government together with OECD analysed investments into irrigation, drainage and reservoirs.
  • The Aral Sea Basin, where USAID and others helped 5 countries in the Aral Sea basin to cooperate with regards to new infrastructure, such as the Rogun dam in Tajikistan.

District Heating: DHAT

DHAT (District Heating Assessment Tool) is used for investment planning and feasibility analysis within district heating. The tool calculates scenarios on servicing an area with district heating composed of production from different technologies and fuels. The costs and emissions can be compared across scenarios, and also with scenarios with individual heating, allowing calculations of e.g. CO2 shadow prices. The tool has been utilised in:

  • Turkey, where it was used assess a national strategy of utilising excess heat from electricity production as a way to provide cheap and emission deducing heat.

Cash Flow at Risk tool

Cash Flow at Risk modelling can be used for investigating the risk of companies defaulting because of insolvency, and how companies through e.g. pricing can mitigate such risks. One interesting use of this in resource economics is the use of auctions for subsidies or taxation of renewable energy resources such as e.g. area for wind or solar farms

  • Undisclosed project on different auctions types for wind farm areas resulting in different public finance cash flow profiles and internal rate of return targets of the bidding companies.