S CHOOL OF A GRICULTURAL & R ESOURCE E CONOMICS Making the most of ‘Caring for our Country’: Suggestions for strengthening the program, from a presentation to Outlook 2009 David Pannell ARC Federation Fellow

1. Modify proposal template  The issue  Project assessment criteria (from Business plan) are good, but impossible to apply given the current template  Information collected is insufficient and too unstructured  Doesn’t allow great projects to stand out from weak ones – sends bad signals to proponents  Suggestions  Require a SMART goal for the project, linked to specific asset(s)  What on-ground works are needed to achieve the goal?  Spell out evidence that those works will achieve the goal  Spell out the basis for believing that the project will get those works in place (e.g. through behaviour change or direct action).

2. Expert review of evidence  The issue  Most past projects (in NHT, NAP) have lacked a sound evidence basis  Proponents often make unrealistic assumptions to make project proposals look good  Project assessors don’t have the expertise to know if this has occurred  Suggestions  Relevant technical experts review all projects above a certain budget  Do technical audits of a random sample of smaller projects  Next time, let proponents know that these will be happening  Start process early enough for them to happen

3. Large projects require a phase 1  The issue  Most NRM projects have major uncertainties and knowledge gaps  On closer examination, the project may or may not look good  To deal with this sort of issue, private sector investors in large projects always do feasibility assessments  Suggestions  For large projects, require a phase 1 in which the SMART goal and required works are fine tuned, and project feasibility is assessed  Have a stop-go-modify point after year 1 of project  Scale down or terminate projects that don’t pass phase 1  Signal that smaller projects with a phase 1 will be favoured

4. Larger projects  The issue  NRM is expensive if done properly  Many small projects do not deliver real NRM outcomes  With larger projects it is more feasible to do the technical evaluation (point 2) and feasibility assessment (point 3) that are needed to get projects that will really deliver outcomes  Suggestions  Continue and strengthen the trend towards having fewer larger projects

5. Fund some clear winners  The issue  We don’t have enough examples of Australian Government investment leading to measurable NRM outcomes  Suggestions  From the large project proposals, give particular priority to those that provide good evidence of technical feasibility and socio-economic feasibility  Require the selected projects to include a phase 1 for feasibility assessment (point 3). As part of that, commission new modelling  Update the modelling over time as project progresses

6. Improve CMO performance  The issue  Catchment Management Organisations (CMOs) have not had to undertake rigorous project development, with an asset focus and a strong evidence basis  Most have very low capacity to do so, little or no incentive to do so, and there can be active resistance from staff when the idea is introduced  Suggestions  Provide clear incentives to CMOs to lift their game  Require them to use a standard investment framework, or at least one that meets a strong set of requirements  Reward those that do so to a high standard  Provide training and support to CMOs to develop skills in rigorous project development and assessment (cost-share with states?)

7. Get analysis started early  The issue  Identifying high quality investments in NRM takes much longer than we usually allow for it  The Australian Government needs to build its capacity to identify high priority NRM investments  Recommendation  Commence analysis of priorities several years in advance of next program  Establish a specialist unit to do this  They should develop the required technical skills, tools, databases

8. Invest in R&D to fill key gaps  The issue  There are almost always crucial knowledge gaps  They prevent good investment decision making  You can’t do R&D for all of them  Recommendation  Commission R&D targeted to those NRM assets that appear strong prospects based on desktop analysis using available information  These assets would be identified by the specialist unit (point 7) and the research would be commissioned by them  The key requirement will be (a) research related to the link between possible works and NRM outcomes, and (b) research on what would be required to achieve adoption of those works at the required scale

9. Rethink the 5-year time frame  The issue  CfoC is built around 5-year targets and outcomes  Most worthwhile NRM projects require investment over much longer, and take longer to show outcomes  There is a risk of funding weak projects to meet the 5-year requirement  Recommendation  Rethink the way that a short term (5-year) investment articulates with longer term NRM outcomes  Accept the reality that outcomes take longer  Don’t fall into the trap of pursuing outputs rather than outcomes

Common themes in these points  The suggestions move the Australian Government in the direction of becoming a discerning investor in NRM projects, not just a program funder  A number of the suggestions are about sending signals to proponents that adoption of a more rigorous approach will be rewarded