Australia's national approach to natural resource management emphasizes regional responsibility and community decision making. The Ecosystem Marketplace explores how this has opened the door for more innovative thinking around market-based conservation. In 2000, the Australian government institutionalized natural resource management by channeling billions of dollars into on-the-ground activities addressing the nation's most challenging environmental problems. The new system devolved responsibility to the catchment, or watershed, level by empowering local landcare groups, mobilizing community involvement and setting priorities, namely salinity and water quality. Now, with a focus on landcare innovation and long-term investment, ecosystem services management and market-based solutions are finding their way into regional management plans established under the "National Action Plan for Water and Salinity" (NAP). Announced in 2000, the NAP set aside AU$700 million (plus an equal amount in state matching funds) for activities addressing water quality problems. In 2001, the government announced an additional AU$1 billion for the existing AU$1.7 billion Natural Heritage Trust (NHT) and adopted the NAP model for allocating funds to projects focused on conservation and biodiversity. "The NAP signalled a fundamental change in approaching natural resource management in Australia," says Gerry Smith, a general manager in the Commonwealth's natural resource management team. "There was a purposeful shift toward investing in outcomes as opposed to competitive, grant-based ad hoc projects, and regional management was the most appropriate scale for doing that."
A Good Match
In developing programs, many catchment managers are looking for new ways to deal with the ever-increasing pressures on the landscape, from drought to expanding urban areas. In their search, some have stumbled across the promise of market-based conservation. Australia's focus on catchments, they say, pairs well with the management of ecosystem services and economic incentives. In particular, the system's emphasis on community involvement has required land managers to play a new kind of role. "We are essentially asking private landowners to manage resources on behalf of the community, so we have to be prepared to pay for those services," says Bernie Dunn, land and biodiversity program manager of the Wimmera Catchment Mangement Authority. "We're working with the community to reach regional targets through innovative measures like market-based instruments." "Older farmers get it—they know there are more values to their land than just its agricultural production," says Bill O'Kane, CEO of the Goulburn Broken Catchment Management Authority. "As they begin to think about their legacy and the state in which they are leaving the land, they become willing to try new ways of improving conditions." Fortunately, the system's flexibility allows for some experimentation. While national and statewide targets are set, "the beauty of the model is the local variation," says Col Freeman, regional strategic facilitator for Southeast Queensland (SEQ) Catchments. "The character of catchment bodies in each state is certainly different, which is necessary to be locally relevant." Catchment managers share their local knowledge and success stories at statewide meetings and through informal networks. "The regional bodies are talking to each to each other and learning, further facilitating innovative thinking and continual improvement in implementation," says Smith. The emphasis on shared learning creates an environment where experimental ideas related to markets and ecosystem services can play out. "Since we don't really know what the appropriate prices are, market-based instruments can be an effective mechanism to assess ecosystem values in an efficient way," says Dunn. "We're constantly looking at ways to be more efficient in the work that we do, and we think markets are a good way to do that." Last but not least, the system's focus on long-term investment has led to an interest in attracting private capital and the untapped value of ecological assets. "There is a quiet consensus that this is the direction to move in," says Freeman, "but it's still early days."
Early days or not, catchment management authorities in Australia have already racked up some real experience with market-based conservation. The NAP specifically allocated AU$5 million to the National Market-based Instruments (MBI) Pilots Program, which funded 11 "cutting edge" pilot projects, ranging from cap-and-trade water quality schemes to designing a fund for private investment in land management. A second round of AU$5 million in funding is now underway, although this remains a small percentage of the AU$1.4 billion fund. "We learned a lot from the first round of MBI pilots," says Smith. "Notably, there is still a lot of capacity building to be done as there's not a lot of expertise in these new emerging areas." Emerging experts might be found in the Goulburn Broken Catchment Management Authority (GBCMA), which is pursuing an ecosystem services approach to natural resource management. "We've sort of been on a personal journey to understand how ecosystems function, not just making decisions based on agricultural productivity," says O'Kane. "It's been a strategic shift in how we approach problem solving." For example, in considering floodplain management options, the GBCMA modelled hydrological implications plus the resulting impacts on ecosystem services and productivity. This dual approach to decision making should also eventually incorporate socio-economic considerations and land use change over time, says O'Kane. Wimmera Catchment Management Authority (CMA) is also at the leading edge when it comes to market-based conservation. In February 2006, the CMA launched Catchment Tender, a program aimed at reducing saline recharge in priority areas. The program works like a reverse auction, allowing landowners to submit project bids for revegetation activities. Prices are at landholder's discretion and can include everything from the costs of labour and materials to the opportunity cost of taking land out of production. The CMA then selects which projects it will fund based on a methodology measuring the environmental benefit per dollar. "People saw it as a business opportunity," says Dunn. "They said: if you want us to make land use changes, this is what it's going to cost." The program was successful in its trial run, replanting 350 hectares with 70,000 trees, and a second round of funding has just been announced.
A Regional Future?
The Commonwealth states that the success of the regional delivery model is the ability consider continent-wide challenges and in a uniform, integrated way. A recent federal review known as the Keogh Report concluded that stakeholders generally agree the model is successful and regional management is the best method for addressing the nation's natural resource problems. As problems change, will this remain the case? While the salinity and water quality issues addressed in the NAP remain important issues for Australia, the top of mind questions today are related to water quantity, as Australia is experiencing its worst drought in over 100 years, and climate change. Regional bodies are amending natural resource plans to adapt to these concerns, but it remains to be seen how their front-and-centre role will overlap with Commonwealth efforts to deal with these larger issues. One result may be a stronger emphasis on market-based solutions, as both water markets and carbon trading are being discussed at the state and national levels. Marisa Meizlish is the manager of advisory services at New Forests Pty Limited in Sydney, Australia and regularly contributes to the Ecosystem Marketplace. She can be reached at firstname.lastname@example.org. First published: November 27, 2006 Please see our Reprint Guidelines for details on republishing our articles.