All in Governance and Markets

Dynamic non market valuation of Ecosystem Services

superuser — Thu, 25 Jun 2009 00:00:12 +0000

We all agree that valuing ecosystem services is crucial for better management of the ecosystem. We don’t seem to agree on how to do it. Current methods do not model the dynamics of economic or ecological systems.

Dr Greg Hertzler’s (USyd) research project developed a dynamic model to value ecosystem services and natural resources. It found natural resource managers (who often value the ecosystem using their preferences and knowledge) are crucial, particularly if they consult widely using citizen juries. Non-market valuations on the other hand, must eliminate their preferences to consume from the estimation of values and include the value of conserving – emphasis on the citizens’ role as owners rather than consumers.

IDs and People

Program:

Innovation

Program Theme:

Innovation Call

Research Type:

Innovation Call

Host Organisation:

The University of Western Australia

Researchers:

Dr Greg Hertzler

Subjects

Subjects:

Governance and Markets

Project Information

Outcomes:

Greg Hertzler provides some useful insights into the target audiences for the research.

1. Economists
For over 50 years natural resource economists have studied and modelled ecological systems such as fish and wildlife populations, river and groundwater catchments, forests, trans-boundary resources and stock pollutants, to give a few examples. Economists who promote non market valuation have usually considered themselves to be environmental economists. They have focused on people as consumers and the environment as a consumer good, with little input from ecology.

Historically, ecologists have been skeptical of economics and critical of economic methods. The economy competes with ecology, often resulting ecosystems being under valued and over exploited. Many ecologists are now collaborating with economists in managing this competition before ecosystems are irreversibly lost.

2. Natural resource managers who usually work in government agencies.

Often they express the view that their job is to weigh up priorities and values for society and to make the hard judgments about the development of the economy versus the conservation of ecosystems. Non market valuation may challenge practice.

Through the project life the audiences remained the same. Outcomes from the project should be easy for both natural resource managers and ecological economists to accept. Their methods of integrating dynamic ecosystems have always focused on owners and resource managers as the conservators for the future. The research adds to their work by specifying how to observe social welfare in a dynamic model.

“Originally, I thought that the research would challenge natural resource managers who value ecosystems. Instead, the results confirm that their knowledge and preferences are crucial, particularly if they consult widely by using citizen juries.”

The preferences of consumers, on the other hand, are to consume rather than conserve. Non market valuation must find ways to eliminate their preferences from the estimation of non market values and focus on the value of conserving for the future.

“As such, the outcomes of the research are likely to be unacceptable to some environmental economists who have spent the last four decades developing contingent valuation and choice modelling surveys based on static consumer theory. Originally it was thought the results would be unpopular with natural resource managers. Now it is thought the results will challenge traditional practitioners of non market valuation”.

Current Activities

Status:

Complete

Mr Gary Stoneham

superuser — Tue, 21 Apr 2009 05:21:46 +0000

Gary Stoneham has played a leading role in developing the use of market-based instruments for allocating scarce resources in natural resource management.

An applied policy economist for more than 25 years, Gary has helped to better harness and target market forces so that they work to reward more sustainable practices by landholders and others. He is currently Chief Economist with the Victorian Department of Sustainability and Environment.

IDs and People

Program:

Innovation

Program Theme:

Senior Research Fellowships

Research Type:

Senior Research Fellow

Researchers:

Mr Gary Stoneham

Subjects

Subjects:

Governance and Markets

Keywords:

market based instruments

Current Activities

Status:

Complete

A virtual farming experience

superuser — Thu, 16 Apr 2009 05:33:57 +0000

Lawry Pitman is a farmer from Corrigin in Western Australia. Lawry served his community for many years at the national, state and local levels on community, industry and government committees covering topics as diverse as land management, farm safety and commodity groups.

IDs and People

Program:

Innovation

Program Theme:

Community Fellows

Research Type:

Community Fellow

Researchers:

Lawry Pitman

Subjects

Subjects:

Landscape Management

Governance and Markets

Project Information

Summary:

Now he’s using all his experience and knowledge, and his own property, to showcase sustainability. ‘To prove that we are sustainable we are attempting to measure and monitor all aspects of sustainability - economic, social and ecological. Benchmarks are being set with the help of Western Australian agencies and R&D corporations.

‘Progress, or deterioration will be communicated to the community through whatever means is required’ says Lawry.

Lawry is producing a CD-ROM describing the annual cycle, and costs and benefits of sustainable farm practice on a real life, working property.

Current Activities

Status:

Complete

Location

State & NRM Region:

Western Australia

Integrated catchment management in the Lake Eyre Basin

superuser — Wed, 15 Apr 2009 23:24:17 +0000

For over four years Kate worked in one of the most isolated parts of Australia with graziers, farmers, tourism operators, government and conservationists to try to reach agreement on how to better manage the vast Lake Eyre Basin.

It wasn’t easy bringing such a disparate group of individuals together. ‘Over the last decade communities and stakeholders of the Lake Eyre Basin moved from a situation of fear and antagonism to working together’ writes Kate.

What began as a challenge, resulted in the creation of the Lake Eyre Basin Coordinating Group and the development of a Basin-wide strategy culminating in the Heads of Agreement between the South Australian, Queensland and Commonwealth Governments.

IDs and People

Program:

Innovation

Program Theme:

Community Fellows

Research Type:

Community Fellow

Researchers:

Kate Andrews

Subjects

Subjects:

Governance and Markets

Catchment Management

Keywords:

2001 2002 Community Fellow

Project Information

Summary:

Kate says the community asked for the story to be written so other groups could learn from the experience -to overcome conflict, face diversity and respect local knowledge and to turn talk and planning into action.

Current Activities

Status:

Complete

Understanding landholder constraints to the uptake of market-based instruments

superuser — Thu, 09 Apr 2009 02:59:46 +0000

IDs and People

Program:

Social and Institutional Research Program

Program Theme:

Sustainable Farming

Research Type:

Research Project

LWA Project Code:

CSU29

Host Organisation:

Charles Sturt University

Researchers:

Professor Mark Morrison

Subjects

Subjects:

Governance and Markets

Project Information

Summary:

Understanding landholder constraints to the uptake of market-based instruments

Current Activities

Status:

Pending

Integration of water and land use planning

superuser — Thu, 09 Apr 2009 02:44:59 +0000

There has been substantial legal reform in natural resource management over the last 15 or more years. This research was concerned with examining the new legal arrangements for catchment and water planning. Legislation was analysed to assess the extent to which the principles of ecologically sustainable development had been incorporated into planning processes. Land use, water and catchment plans were then examined to assess the extent to which reform had flowed into practice.

IDs and People

Program:

Social and Institutional Research Program

Research Type:

Research Project

Research Scale:

National

LWA Project Code:

UWO4

Researchers:

Carla Mooney

Subjects

Subjects:

Governance and Markets

Current Activities

Status:

Complete

Creating Markets for Environmental Goods and Services: A Mechanism Design Approach

superuser — Thu, 09 Apr 2009 01:37:30 +0000

IDs and People

Program:

Social and Institutional Research Program

Program Theme:

Market Based Instruments

Research Type:

Research Project

LWA Project Code:

DSE3

Host Organisation:

Land & Water Australia

Researchers:

Dr Gary Stoneham

Subjects

Subjects:

NRM Processes

Governance and Markets

Project Information

Summary:

Creating Markets for Environmental Goods and Services: A Mechanism Design Approach

Current Activities

Status:

Pending

Breaking through the Equity Barrier in Environmental Policy

superuser — Thu, 09 Apr 2009 01:34:25 +0000

The main hypothesis underlying this study was that judgments of equity or fairness are sensitive to context, but not in a random way. We designed a two-pronged approach for equity judgments regarding water allocation policies in Western Australia.

IDs and People

Program:

Social and Institutional Research Program

Program Theme:

Innovation Call

Market Based Instruments

Research Type:

Research Project

LWA Project Code:

UWA37

Host Organisation:

University of Western Australia

Researchers:

Steven Schlizzi

Subjects

Subjects:

Governance and Markets

Socio-Economic

Project Information

Summary:

Breaking through the Equity Barrier in Environmental Policy

Current Activities

Status:

Pending

Achieving Coordinated Landscape-scale Outcomes with Auction Mechanisms

superuser — Thu, 09 Apr 2009 01:07:33 +0000

This project will apply recent advances in auction theory together with CSIRO’s experience of conservation tenders around Australia to develop principles for auction design that are capable of delivering efficient, coordinated outcomes across landscapes

IDs and People

Program:

Social and Institutional Research Program

Program Theme:

Informing policy and management

Market Based Instruments

Research Type:

Research Project

LWA Project Code:

CSE45

Host Organisation:

CSIRO Sustainable Ecosystems

Researchers:

Dr Andrew Reeson

Subjects

Subjects:

Native Vegetation

Governance and Markets

Project Information

Summary:

The practicality of these principles will be tested with stakeholders using experimental economics techniques and running interactive workshops which can be used to inform and engage with stakeholders.

Outcomes:

1. Develop the next generation of auction (competitive tender) based instruments which deliver superior levels of engagement and coordination in order to achieve landscape scale change.

2. Adapt and further develop combinatorial auction mechanisms, previously applied to other coordination problems, for application in competitive conservation tenders.

Current Activities

Status:

Pending

Encouraging Participation in Market-based Instruments and Incentive Programs

superuser — Wed, 08 Apr 2009 23:30:35 +0000

The project outlines how to improve the design, delivery and communication of Market Based Instruments (MBIs) and incentive programs to increase the participation of landholders.

IDs and People

Program:

Social and Institutional Research Program

Program Theme:

Market Based Instruments

Research Type:

Research Project

LWA Project Code:

CSU29

Host Organisation:

Charles Sturt University

Researchers:

Professor Mark Morrison

Dr Jeanette Durante

Ms Jenni Greig

Dr John Ward

Subjects

Subjects:

Governance and Markets

Project Information

Summary:

Dates: Project completed in June 2007

The project outlines how to improve the design, delivery and communication of Market Based Instruments (MBIs) and incentive programs to increase the participation of landholders.

In terms of who participates in MBIs and incentives, those with the highest socio-demographic status are the most likely to participate, which raises concern about efficiency and equity. It was found that age was negatively related and education was positively related to participation.

Trust, business orientation, information seeking behaviour and connectedness are amongst the best predictors of participation in an MBI or incentive program.

Where landholders hear about a program via direct contact (eg through extension officers) they are more likely to participate. The most effective communication messages emphasise the benefits to landholders and the management of their property and business.

Outcomes:

The objectives of Market Based Instruments (MBIs) and incentive programs differ, and this needs to be considered when interpreting the recommendations. The results suggest that modifying the following features of MBIs and incentives is likely to increase landholder participation:

how the program is delivered;
flexibility in required environmental outcomes and management practices;
amount of paper work required;
availability of technical assistance;
clarity about such things as eligibility and how bids will be assessed;
contract length;
the approach used for monitoring;
the chosen payment schedule; and
the type of program on offer, with landholders having much greater interest in applying for a fixed grant or a variable cost share program rather than a tender.

Designing or delivering MBIs and incentives in the following ways were found to be helpful:

Use Landcare, local CMAs/regional bodies or industry groups to deliver the programs.
Provide technical assistance particularly for identifying potential management actions and ongoing technical assistance.
Provide help writing applications if possible.
Indicate the probability of success with past grants.
For payments, landholders prefer to receive a larger upfront payment with the residual paid in equal yearly payments or payment after each stage has been completed rather than equal yearly payments.
For ongoing projects, contracts of 3-5 years with an optional extension are preferred to projects of fewer years in length.

For monitoring, include site visits half way and at the end of the project rather than just at the end of the project, or sending in photos at key stages.

1. Mix of instruments

Landholders had the highest interest in applying for fixed grants, followed by variable cost-share, with interest in tenders substantially lower than the other two instruments. Consider having a mix of instruments available.

2. Design programs for specific segments

Establish programs aimed at specific segments to improve equity in the distribution of funds or to engage known target groups. For example, programs for properties of specific size eg. focused on hobby farms or mid-sized properties.

3. Develop new instruments to reach segments with low participation

In the USA cross-compliance instruments (eg Sodbusters) have been effective at reaching groups unwilling to participate in NRM programs. These programs may be effective in Australia as a means of promoting behavioural change among particular segments, for example in encouraging the profit-first farmers to participate in NRM programs.

4. Evaluate the efficiency of variable cost-share

Variable cost-share programs may lead to better outcomes than fixed grants and they are preferred to tenders.

5. Preferred program characteristics are as follows:

The following design features of MBIs and incentives are likely to increase participation:

Use Landcare, local CMAs/regional bodies or industry groups to deliver the programs
Provide ongoing technical assistance, particularly for identifying potential management
actions. Provide help writing applications if possible.
Indicate the probability of success with past grants.
Provide payment in the form of a larger upfront payment with the residual paid in equal
yearly payments or payment after each stage has been completed rather than equal yearly
payments.
For ongoing projects, provide contracts of 3-5 years with an optional extension rather than
shorter contracts.
For monitoring, include site visits halfway through and at the end of the project.

6. Communication strategy - what channels to use

In general, use direct contact to encourage participation in MBIs and incentive programs. Use networks and opinion leaders where trust is an issue.

Use workshops, seminars or other community meetings when the program needs to be explained.

Use localised, understandable and relevant advertising to increase the reach of the communication, eg. through the use of case studies.

For difficult to reach segments, such as ‘profit first’ farmers and hobby farmers, choose channels carefully, eg. Rural Press, industry newsletters, Tv, radio, DPI/DNRW publications and networks as well as direct contact.

7. Communication strategy - what message to use

Develop promotional materials that emphasise the benefits to landholders from participation in terms of improved farm management.

8. The importance of social capital

Trust and connectedness were two of the most important predictors of participation. Further work needs to be undertaken to better understand how trust and connectedness can be developed between landholders and those delivering NRM programs.

9. The need to develop human capital in segments with low participation

There is a need to invest in extension and the development of landholder skills, particularly among landholders in segments with low participation. Methods for developing these skills could include extension, short courses and demonstration workshops.

Who is Most Likely to Participate in MBIs and Incentive Programs?

In terms of who participates in MBIs and incentives, trust, business orientation, information seeking behaviour and connectedness are amongst the best predictors of participation in an MBI or incentive program. Those most likely to participate in MBI and incentive programs are those with the highest socio-demographic status, which raises concern about efficiency and equity. It was found that age was negatively related and education was positively related to participation.

Current Activities

Status:

Pending

Background

Project Background:

To understand how to increase landholder participation, three main research questions were asked, namely 1) what are the characteristics of MBIs and incentive programs that encourage participation, 2) who participates in MBIs and incentive programs and 3) how can MBIs and incentives be better communicated to increase participation?

A mixed methods research design was used to provide answers to these questions. This included a literature review (two working papers), 25 expert interviews (one working paper), eight focus groups (one working paper) in four regions of NSW and Queensland, and a quantitative survey of about 6,000 landholders from two Catchment Management Authority (CMA) areas in NSW (Central West and Northern Rivers), two regional body areas in Queensland (Condamine Alliance and Mackay-Whitsundays) and one CMA area in South Australia (Mt Lofty Ranges).

For further information, please contact:

Professor Mark Morrison

School of Marketing and Management, Faculty of Business
Charles Sturt University
Panorama Avenue, Bathurst NSW 2795, Australia

Phone: 61 2 6338 4253
Fax: 61 2 6338 4769
Email: mmorrison@csu.edu.au
Social and Institutional Research Program

Land & Water Australia
GPO Box 2182, Canberra ACT 2601
Phone: 02 6263 6000
Email: enquiries@lwa.gov.au

Building Regional Australia's Capacity to Initiate Markets for Ecosystem Services

superuser — Wed, 08 Apr 2009 23:27:36 +0000

IDs and People

Program:

Social and Institutional Research Program

Program Theme:

Market Based Instruments

Research Type:

Demonstration Project

LWA Project Code:

CSE 12

Host Organisation:

CSIRO Ecosystem Services

Researchers:

Dr Stuart Whitten

Subjects

Subjects:

Governance and Markets

Project Information

Summary:

Building Regional Australia’s Capacity to Initiate Markets for Ecosystem Services

Current Activities

Status:

Pending

Extending Audit outcomes to enhance rural local government environmental capacity

superuser — Wed, 08 Apr 2009 03:58:49 +0000

IDs and People

Program:

Social and Institutional Research Program

Program Theme:

Community Participation

LWA Project Code:

ANU43

Host Organisation:

The Australian National University

Researchers:

Su Wild River

Subjects

Subjects:

Governance and Markets

Project Information

Summary:

Extending Audit outcomes to enhance rural local government environmental capacity

Current Activities

Status:

Pending

Policy integration for sustainable NRM: joint research and policy learning

Wed, 11 Mar 2009 02:22:03 +0000

Sustainable natural resources management requires the integration of economic, social and environmental considerations in policy and decision-making. For example the economic and social advantages of land clearing and irrigation need to be balanced with environmental costs such as salinity and soil erosion.

IDs and People

Program:

Innovation

Program Theme:

Innovation Call

Research Type:

Innovation Call

LWA Project Code:

002582

Host Organisation:

Centre for Resource and Environmental Studies

Researchers:

Andrew Ross

Professor Stephen Dovers

Subjects

Subjects:

Governance and Markets

NRM Regions

Current Activities

Status:

Pending

Changing the ownership-management paradigm in broadacre farming

Wed, 11 Mar 2009 02:18:01 +0000

Anecdotal and survey information reveals that a growing proportion of farmers feel time-pressed. The population of farmers is ageing, farms are getting bigger, rural labour is more scarce and the technological complexity of mixed enterprise farming is increasing. These factors are leading some farmers to opt for convenience-style management of their less important enterprises. In some low and medium rainfall zones this means that some farmers understandably concentrate on crop production rather than animal production. As a result many farmers are not investing in establishing larger tracts of perennials, fodder shrubs and saltland pastures. Rather they continue to run low stocking rate, low productivity, lower profit sheep systems.

IDs and People

Program:

Innovation

Program Theme:

Innovation Call

Research Type:

Innovation Call

LWA Project Code:

002390

Host Organisation:

The University of Western Australia

Researchers:

Dr Ross Kingwell

Subjects

Subjects:

Governance and Markets

Current Activities

Status:

Active

New paradigms to find solutions to intractable NRM problems

Wed, 11 Mar 2009 02:12:55 +0000

When natural resource management (NRM) policy and practice do not address the root causes of targeted problems, they fail and the resource becomes degraded.

IDs and People

Program:

Innovation

Program Theme:

Innovation Call

Research Type:

Innovation Call

LWA Project Code:

002369

Host Organisation:

Murdoch University

Researchers:

Professor Richard Hobbs

Subjects

Subjects:

Governance and Markets

Current Activities

Status:

Pending