School of Agricultural & Resource Economics Salinity Investment Framework 3 David Pannell UWA Anna Ridley DPI Vic

School of Agricultural & Resource Economics The questions  Which projects are worth funding?  Which policy tools to use?

School of Agricultural & Resource Economics The problem  It’s important to do well  Small budget relative to the issues  Big changes required - expensive  Economics often adverse  It’s difficult to do well  Integrate diverse information  Lots of knowledge gaps  Spatially variable  NRM outcomes vs community expectations  Lack of capacity

School of Agricultural & Resource Economics SIF3: What is it?  Decision frameworks  on paper, not computerised  Participatory process  Multi-disciplinary team  Quick scan of options  short list  detailed feasibility assessment  Technical, social and economic

School of Agricultural & Resource Economics SIF3 Public: Private Benefits Framework

School of Agricultural & Resource Economics Public and private benefits  This framework is embedded in SIF3  Relevant to change on private land  e.g. Salinity, water quality, clearing  An advance on cost-sharing

School of Agricultural & Resource Economics “Project”  A defined set of changes in a specific location   private net benefits (internal)  Economics, risk, complexity   public net benefits (external)  Neighbours, downstream water users, city dwellers interested in biodiverity

School of Agricultural & Resource Economics Possible projects Each dot is a set of land-use changes on specific pieces of land = a project. Lucerne Farm A Lucerne Farm B Current practice Which tool? Incentives Extension Regulation New technology No action

School of Agricultural & Resource Economics Simple public-private framework

School of Agricultural & Resource Economics SIF3 The decision-tree approach

School of Agricultural & Resource Economics SIF3 description  Relate particular situations to the PPF  Rules of thumb  Benefit:cost analysis mindset  Develop a map of ‘best-practice’ investment response by scenario x 60

School of Agricultural & Resource Economics High value terrestrial assets Waterways Dispersed assets (e.g. agric land) Saltland Asset types

School of Agricultural & Resource Economics Waterway Salt input HighLow High Low Groundwater response HighLow Fresh runoff Adoptability Extension + − Incentives −− Technol. Devel. Positive incentives Technology development Private net benefit No action Extension No Action Negative incentives Public net benefit

School of Agricultural & Resource Economics SIF3 Piloting implementation

School of Agricultural & Resource Economics Piloting implementation  Worked with two CMAs  North Central region Victoria  South Coast WA  Elements  Communication  Apply SIF3 decision trees  Focus groups to understand capacity issues  Interviews with lifestyle landholders  Evaluation

School of Agricultural & Resource Economics

School of Agricultural & Resource Economics Results: localised assets

School of Agricultural & Resource Economics Results: dispersed assets  Less use of  Extension and small temporary grants  (should mainly use where viable options exist)  More use of  Technology development

School of Agricultural & Resource Economics Response  NCCMA accepted recommendations  Completely rewrote salinity implementation plan  Fast tracked application of the approach to their entire portfolio  South Coast NRM likely to do similar  Five regions now signed up

School of Agricultural & Resource Economics National impact  Senate recommendation  Standing Committee/Ministerial Council  Meetings with senior policy groups in each state (with DAFF support)  Partnerships with NRM bodies and state agencies  Good links to DAFF & DEWHA

School of Agricultural & Resource Economics SIF3 Lessons and Implications

School of Agricultural & Resource Economics Four essential elements  Asset value  Threat/impact (level and urgency)  Technical feasibility of reducing threat/impact (cause and effect relationships)  Adoptability of the desired practices Sometimes missed Often missed Usually missed Usually included

School of Agricultural & Resource Economics Choice of mechanism  Choice of mechanism is at least as important as choice of environmental asset

School of Agricultural & Resource Economics “Needs” for better decisions  A re-focus on NRM outcomes  A guiding framework (rule things out)  Ease and understandability  Support for NRM managers  Data and analysis, not just judgment  Tighter targeting  A different mix of policy tools  Patience

School of Agricultural & Resource Economics Challenges we faced  The difficulty of the analysis task  Program constraints  Insane time lines  Requirement for “on-ground” work  Community expectations - fear of backlash  Battling vested interests  Huge communication costs  Low technical/economics capacity available  Agency schizophrenia

School of Agricultural & Resource Economics Questions from organisers  How does approach compare internationally?  Seems to be unique  How have we been supported by agencies and research organisations?  Funds, in-kind, info, moral support, advocacy, …  Ignored, resisted, abused, attacked  How to measure success?  Justified expectation that it will actually lead to more cost-effective NRM outcomes

School of Agricultural & Resource Economics Funding acknowledgements ARC CERF Future Farm Industries CRC DSE, DPI, DAFWA, DEC, DoW CMO partners