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Salinity Investment
Framework 3 (SIF3)
Assisting regional NRM planning and policy design
David Pannell
Anna Ridley
UWA
DPI Vic
Aim
Increase NRM outcomes from public
investment
Which projects are worth funding?
Which policy tools to use?
The problem
In most regions, poor targeting of
investment
Poor selection of policy tools
It’s difficult to do well
Integrate diverse information
Lots of knowledge gaps
Spatially variable
Economics often adverse
Small budget relative to the issues
NRM outcomes vs community expectations
How our approach is different
Asset-based (spatially specific)
Distinguish localised and dispersed
assets
Consider public & private net benefits
Full range of policy mechanisms
Build in insights from R&D
Focus on adoptability
SIF3
Public: Private Benefits Framework
Public and private benefits
This framework is embedded in SIF3
Relevant to change on private land
E.g. salinity
Water quality
Clearing
Helps operationalise some key
principles
“Project”
A defined set of changes in a specific
location
Has some level of private net benefits
to the landholder (internal)
Also has some level of public net
benefits (external)
neighbours, downstream water users, city
dwellers interested in biodiverity
Each dot is a set of
land-use changes
on specific pieces
of land = a project.
For any dot
which tool?
• Incentives
• Extension
• Regulation
• New technology
• No action
Lucerne
Farm B
Public net benefits
Possible projects
0
Current
practice
Lucerne
Farm A
Private net benefits
Forestry in
water
catchment
Alternative policy mechanisms
for seeking changes on private lands
Category
Specific policy mechanisms included
Positive incentives
Financial or regulatory instrumentsA to encourage
change
Negative incentives Financial or regulatory instrumentsA to inhibit
change
Extension
Technology transfer, education, communication,
demonstrations, support for community network
Technology
development
Development of improved land management
options, e.g. through strategic R&D
No action
Informed inaction
AIncludes
polluter-pays mechanisms (command and control, pollution tax, tradable permits,
offsets) and beneficiary-pays mechanisms (subsidies, conservation auctions and tenders).
Simple rules
for allocating mechanisms to projects
A
B
Public net benefit
1. No positive incentives for
land-use change unless
public net benefits of
change are positive.
2. No positive incentives if
landholders would adopt
land-use changes without
those incentives.
3. No positive incentives if
private net costs outweigh
public net benefits.
F
0
C
E
D
Private net benefit
Positive incentives only suitable for projects in area A
Simple rules
A
B
Public net benefit
4. No extension unless the
change being advocated
would generate positive
private net benefits (the
practice is ‘adoptable’).
5. No extension where a
change would generate
negative net public
benefits
6. … 10. see web site
F
0
C
E
D
Private net benefit
Extension only suitable for projects in area B
Simple public-private framework
Positiv e
incentiv es
Public net benefit
Extension
Technology
dev elopment
(or no action)
0
No action
(or extension or
negativ e incentiv es)
No action (or
f lexible negativ e
incentiv es)
Negativ e
incentiv es
Private net benefit
BCR ≥ 1
Assumes benefits
must exceed costs.
100
Positive
incentives
Public net benefit ($/ha/year)
More complex
version allowing for
lags to adoption,
learning costs, cost
of extension and
partial effectiveness
of extension.
Extension
50
Technology
development
(or no action)
No action
0
-100
-50
0
No action
(or extension or
negative incentives)
50
100
No action (or
flexible negative
incentives)
-50
Negative
incentives
-100
Priv ate net benefit ($/ha/year)
BCR ≥ 2
This version is more targeted
100
Assumes benefits
must be at least
double the costs.
Public net benefit ($/ha/year)
Positive
incentives
Technology
development
(or no action)
Extension
50
No action
0
-100
-50
0
No action
(or extension or
negative incentives)
50
No action (or
flexible negative
incentives)
-50
Negative
incentives
-100
Priv ate net benefit ($/ha/year)
100
What makes up private net
benefit?
Depends on the farmer’s goals
(i)
(ii)
(iii)
(iv)
(v)
material wealth & financial security
environmental protection and enhancement
social approval and acceptance
personal integrity, ethics
balance of work and lifestyle
• Likely to vary by:
Commercial farmers
Lifestyle landholders
Hybrids
Different elements of private net
benefit
Commercial
Lifestyle
Financial returns
important
Some focused on
environment
Some on aesthetics of
their property
Short of time
Some are short of skills
Large areas of trees
possible, but only if
profitable enough
For those focused on
aesthetics, smallmoderate areas likely,
large areas may be hard
Estimating private net benefit
Economic modelling
Surveys
Observe actual behaviour
In context of phase of adoption
What makes up public benefit?
Any benefits to “others”
neighbours, downstream water users, city
dwellers interested in biodiverity
May include
Financial
Ecological
Social
Estimating public net benefits
Asset value
Workshops
Surveys
Scientific assessment
Judgement of people in the regional NRM body
Threat, feasibility and cost of
protection
Scientific or engineering advice
Economic modelling
Local knowledge
SIF3
The decision-tree approach
SIF3
How should public investor respond to
a particular salinity problem?
Major body of research spanning
economics (farm-level to public policy level)
hydrogeology
social aspects (demographics, land-use change)
farming systems/farm management
policy issues (mechanism design, externalities)
Some very important changes in knowledge
SIF3 description
Relate particular situations to the PPF
Rules of thumb benefit:cost analysis
Rules depend on
type of asset at risk
a set of bio-physical and socio-economic criteria
Can develop a map of ‘best-practice’
investment tool by scenario
Analysis tables for 60 scenarios
Asset types
Salinity impacts on waterways
High value terrestrial assets
e.g. infrastructure, key vegetation/biodiversity
Dispersed assets
agricultural land, remnant veg on farms, flood risk
Salt-affected land
Terrestrial
assets
Salt
input
Groundwater
response
High
High
High
Low
Low
Fresh
runoff
Waterway
Low
Dispersed
assets (e.g.
agric land)
Saltland
Adoptability
+ Exten
- Incent
-- Technology
Recommended responses in all scenarios
Water
Terrestrial assets
Land
Salt land
Extension
Incentives
Regulation/permits
Engineering
Technology
Land retirement
Do nothing
Water
Terrestrial assets
Land
Salt land
SIF3
Water
Terrestrial assets
Land
Salt land
Extension
Incentives
Regulation/permits
Engineering
Technology
NAP
Land retirement
Do nothing
SIF3
Piloting implementation
Piloting implementation
Working with two CMAs
Process
Reviewed existing investments and plans
Data collation
Apply SIF3 decision trees using GIS
Intensive consultation/communication
Focus groups to understand capacity issues
Interviews with lifestyle landholders
Results: localised assets
Results: dispersed assets
Much less use of extension and small
temporary grants
Only where highly adoptable options exist
More use of technology development
Make an explicit decision on level of
investment in dispersed assets
Response
NCCMA board has accepted all
recommendations
Have completely rewritten salinity
implementation plan
Will re-write catchment plan
NCCMA asked us to repeat process for
other environmental issues (INFFER)
Several other CMAs keen as well
SIF3
Lessons and Implications
Lessons/implications
Large potential NRM gains
Programs need a re-focus on NRM
outcomes, not activities
Victoria struggling even after 10 years
Need
A guiding framework (rule some things out)
Data and analysis
Not just judgment
Tighter targeting
A different mix of policy tools
Lessons/implications
Distinguish localised & dispersed assets
Localised
High value per affected ha
Concentrated investments potentially warranted
Use engineering, incentives, extension, regulation
Dispersed:
Lower value per ha, but large area
Investments must be low-cost & highly effective
use technology development, auctions, extension
Lessons/implications
Public: private framework + decision
tree a powerful guide
Rules out many of the options
Quickly gets to a short list using readily
available information
Still need detailed feasibility analysis
But only on a few key prospects
Principles and processes not enough
Lessons/implications
Anticipate adoptability of practices
Economics and social science
Determines feasibility of interventions
Drives choice of policy tools (extension,
incentives, technology development, no action)
Need patience
Good planning takes time
Not just on-ground works
Handling community expectations
Lessons/implications (capacity)
Integration needs strengthening
Major skill gaps in economics and social
Regions do use technical science, but
Which science?
Science quality?
M&E is a weakness
Need targets based on analysis
Need a person to drive/link
Gaps in the Standard
Stronger guiding frameworks to
Rule some things out
Assist with integration, target setting, M&E
Bring BCA mindset to interventions
Asset-based approach
Cause and effect - link actions to outcomes
Solves the scale issue
Localised vs dispersed assets
Adoptability of practices
Public and private benefits - choice of
intervention
www.sif3.org