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The focus of this study is on the development of a novel approach to evaluate the impact of the R4D Alliance at project and program level, including practical guidance to support more effective project design and impact for future R4D investment. A significant limitation amongst many current impact evaluation methodologies is that a narrow set of approaches is often used to evaluate complex development issues. This means that impacts may be only partially described and this is compounded by a lack of clarity around the validation and attribution of impacts to particular interventions - in some cases uncertainties may be larger than claimed benefits! Our mixed methods approach to impact evaluation overcomes many of these challenges, allowing us to evaluate and quantify the impact of the Alliance at program level and at the individual project level in a timely manner, and to the best of our knowledge is the only product of this type currently in use. Our approach demonstrates that with a small additional investment impacts can be successfully tested for at project completion and greater confidence levels for impact pathways can be achieved. These are essential if confidence in the value of R4D investment is to be maintained, and will contribute to the ongoing quality and effectiveness of Australian aid. We anticipate that this approach will raise the bar for future impact evaluations.

Climate variability can induce uncertainty in yields, and threaten long term economic viability of rainfed agricultural enterprises in the absence of effective adaptation strategies. Enterprise mix diversification has been found to be an effective adaptation strategy for mitigating multiple sources of farm business risk in some contexts. The extent to which enterprise mix diversification can mitigate climate induced variability in long term net returns from rainfed agriculture is assessed in this paper. Building on APSIM modelling, the assessment applies Monte Carlo simulation, probability theory, and finance techniques, to assess the potential for enterprise mix diversification to mitigate climate-induced variability in long term economic returns from rainfed agriculture. Five alternative farm enterprise types comprising three non-diversified farm enterprises and two diversified farm enterprises consisting of a correlated mix of rainfed agricultural activities were considered. The decision to switch from a non-diversified agricultural enterprise with the highest expected return to a diversified agricultural enterprise consisting of a mix of agricultural enterprises was analysed. Correlation analysis showed that yields were not perfectly correlated (i.e. are less than 1) indicating that changes in climate variables cause non-proportional impacts on yields. Results show that whilst diversification can reduce the standard deviation of net returns by up to A$122ha-1 and increase the worst probable net loss by A$99ha-1, diversification can reduce the expected net returns by up to A$96ha-1 and reduce the maximum probable net gain by up to A$602ha-1. Further, under non-diversified enterprises, the likelihood of realising net losses higher than the maximum probable net loss under the diversified enterprise was estimated at up to 6%. Conversely, under the non-diversified enterprise, the likelihood of realising net gains higher than the maximum probable net gain under diversified enterprises was estimated at up to 16%.

Climate change and climate variability induce uncertainty in yields, and thus threaten long term economic viability of rain-fed agricultural enterprises. Enterprise mix diversification is the most common, and is widely regarded as the most effective, strategy for mitigating multiple sources of farm business risk. We assess the potential for enterprise mix diversification in mitigating climate induced variability in long term net returns from rain-fed agriculture. We build on APSIM modelling and apply Monte Carlo simulation, probability theory, and finance techniques, to assess the potential for enterprise mix diversification to mitigate climate-induced variability in long term economic returns from rain-fed agriculture. We consider four alternative farm enterprise types consisting of three non-diversified farm enterprises and one diversified farm enterprise consisting of a correlated mix of rain-fed agricultural activities. We analyse a decision to switch from a non-diversified agricultural enterprise with the highest expected return to a diversified agricultural enterprise consisting of a mix of agricultural enterprises. Correlation analysis showed that yields were not perfectly correlated (i.e. are less than 1) indicating that changes in climate variables cause non-proportional impacts on yield production. We conclude that at best, diversification can reduce the standard deviation of net returns by up to about A$110 Ha-1, or 52% of mean net returns; increase the probability of below-average net returns by up to about 4% and increase the mean of 10% of worst probable annual net returns by up to A$54/ha. At worst, diversification can reduce the mean of net returns by up to about A$95 Ha-1, or 46%.

Evaluations of pathogen management options have focussed on assessing relative removal effectiveness as a basis for prioritising alternative management investment decisions. Using a case study of the Myponga catchment, South Australia, this paper presents results of a cost-effectiveness risk analysis of 13 catchment- and treatment-based water quality management alternatives for mitigating Cryptosporidium risk. A range of costs and benefits including set-up and operating costs, farm business costs and benefits, and environmental service benefits are considered in comparing the net cost associated with each management alternative. Considering the broader range of costs and benefits changes the relative cost-effectiveness of water quality management alternatives significantly. Combinations of catchment- and treatment-based management alternatives proved to be relatively more cost-effective at mitigating Cryptosporidium risk. Specifically, the combination of spatially targeted water course management upstream of the catchment with reservoir treatment by ultra-violet radiation provides a cost-effective Cryptosporidium risk mitigation strategy especially when the adoption of dung beetles and treatment by enhanced coagulation are included as complementary low cost alternatives. Considering the broader range of costs and benefits enhances the potential to increase the cost-effectiveness of investment in Cryptosporidium risk mitigation as well as produce a range of significant secondary benefits for water quality, biodiversity, and carbon sequestration.

Human capital investment, especially in education, is a well-known precursor of economic growth in developing countries. In recent years, there has been a proliferation of microfinance programmes, yet evidence on whether microfinance leads to increased educational investment is tenuous at best. We utilise a large-scale cross-sectional household dataset from Bangladesh and geospatial data to study how microcredit participation and increasing microcredit incomes – that is, the extensive and intensive margins of microcredit – affects the probability of children’s school enrolment. The causal influence of microcredit participation on enrolments was estimated by utilising the propensity score matching (PSM) technique – a quasi-experimental treatment effects model. Whilst microcredit participation, the extensive margin, did not significantly influence the likelihood of school enrolment for boys, it increased girls’ enrolment. Further, microcredit income, the intensive margin, had a stronger influence on girls’ and younger siblings’ enrolment than on boys’ and older siblings’ enrolment. Omission of spatial influences can overstate microcredit influence on enrolment; while not utilising PSM can underestimate the influence of microcredit participation on enrolment. Results suggest policies that focus solely on increasing microcredit participation, without increasing the amount of microcredit incomes accessed by households, may be less effective at improving child education outcomes.

Human capital investment, especially in education, is a well-known precursor of economic growth in developing countries. In recent years, there has been a proliferation of microfinance programmes, yet evidence on whether microfinance leads to increased educational investment is tenuous at best. We utilise a large-scale cross-sectional household dataset from Bangladesh and geospatial data to study how microcredit participation and increasing microcredit incomes – that is, the extensive and intensive margins of microcredit – affects the probability of children’s school enrolment. The causal influence of microcredit participation on enrolments was estimated by utilising the propensity score matching (PSM) technique – a quasi-experimental treatment effects model. Whilst microcredit participation, the extensive margin, did not significantly influence the likelihood of school enrolment for boys, it increased girls’ enrolment. Further, microcredit income, the intensive margin, had a stronger influence on girls’ and younger siblings’ enrolment than on boys’ and older siblings’ enrolment. Omission of spatial influences can overstate microcredit influence on enrolment; while not utilising PSM can underestimate the influence of microcredit participation on enrolment. Results suggest policies that focus solely on increasing microcredit participation, without increasing the amount of microcredit incomes accessed by households, may be less effective at improving child education outcomes.

This article presents an econometric analysis of irrigation commodity area and revenue responses to varying commodity prices, water availability and climate conditions for the second half of a decade long drought in the Murray Darling Basin, Australia. We find statistically significant evidence of irrigation area decline with reductions in water allocations and irrigation revenue shrinking with area irrigated. Results also indicate hotter drier weather conditions experienced in the drought effected crops differently: some crop revenues suffered, while higher evapotranspiration and yield potential appeared to support higher revenue outcomes for other crops. Comparison revealed that marginal revenue changes in response to water allocations estimated are much less than those implicit in other economic assessments of water scarcity impacts for the same basin that used different methods. We find that triangulation of results between methods provides confidence in consistent results and reveals possible avenues for future research and methodological development. Refereed/Peer-reviewed

Climate variability, and its increase with climate change, pose substantial economic risks to agriculturalists and hence, limit their ability to respond to global challenges such as food security. Enterprise mix diversification is the most common, and is widely regarded as the most effective, strategy for mitigating multiple sources of short-term economic risk to agricultural enterprises. However, assessments of enterprise mix diversification as a strategy for mitigating climate risks to ensure long term viability of agricultural enterprises are sparse. Using the Lower Murray region in southern Australia as a case study, we combined APSIM modelling with Monte Carlo simulation, probability theory, and finance techniques, to assess the extent to which enterprise mix diversification can mitigate climate-induced variability in long term net returns from rain-fed agriculture. We found that diversification can reduce the standard deviation by up to A$200 ha(-1), or 52% of mean net returns; increase the probability of breaking even by up to 20%, and increase the mean of 10% of worst probable annual net returns (Conditional Value at Risk) by up to A$100 ha(-1). We conclude that enterprise mix diversification can also be an effective strategy for hedging against climate-induced economic risk for agriculturalists in marginal areas. Refereed/Peer-reviewed

Increasingly, water agencies and utilities have an obligation to consider the broad environmental impacts associated with investments. To aid in understanding water cycle interdependencies when making urban water supply investment decisions, an ecosystem services typology was augmented with the concept of integrated water resources management. This framework is applied to stormwater harvesting in a case study catchment in Adelaide, South Australia. Results show that this methodological framework can effectively facilitate systematic consideration and quantitative assessment of broad environmental impacts of water supply investments. Five ecosystem service impacts were quantified including provision of 1) urban recreational amenity, 2) regulation of coastal water quality, 3) salinity, 4) greenhouse gas emissions, and 5) support of estuarine habitats. This study shows that ignoring broad environmental impacts can underestimate ecosystem service benefits of water supply investments by a value of up to A$1.36/kL, or three times the cost of operating and maintenance of stormwater harvesting. Rigorous assessment of the public welfare impacts of water infrastructure investments is required to guide long-term optimal water supply investment decisions. Numerous challenges remain in the quantification of broad environmental impacts of a water supply investment including a lack of peer-reviewed studies of environmental impacts, aggregation of incommensurable impacts, potential for double-counting errors, uncertainties in available impact estimates, and how to determine the most suitable quantification technique. Refereed/Peer-reviewed

Vulnerability assessments have often invoked sustainable livelihoods theory to support the quantification of adaptive capacity based on the availability of capital-social, human, physical, natural, and financial. However, the assumption that increased availability of these capitals confers greater adaptive capacity remains largely untested. We quantified the relationship between commonly used capital indicators and an empirical index of adaptive capacity (ACI) in the context of vulnerability of Australian wheat production to climate variability and change. We calculated ACI by comparing actual yields from farm survey data to climate-driven expected yields estimated by a crop model for 12 regions in Australia's wheat-sheep zone from 1991-2010. We then compiled data for 24 typical indicators used in vulnerability analyses, spanning the five capitals. We analyzed the ACI and used regression techniques to identify related capital indicators. Between regions, mean ACI was not significantly different but variance over time was. ACI was higher in dry years and lower in wet years suggesting that farm adaptive strategies are geared towards mitigating losses rather than capitalizing on opportunity. Only six of the 24 capital indicators were significantly related to adaptive capacity in a way predicted by theory. Another four indicators were significantly related to adaptive capacity but of the opposite sign, countering our theory-driven expectation. We conclude that the deductive, theory-based use of capitals to define adaptive capacity and vulnerability should be more circumspect. Assessments need to be more evidence-based, first testing the relevance and influence of capital metrics on adaptive capacity for the specific system of interest. This will more effectively direct policy and targeting of investment to mitigate agro-climatic vulnerability. Refereed/Peer-reviewed