Monthly Archives: January 2006

68 – Seeking multiple outcomes in environmental programs

In Australian government programs for natural resource management, it is fashionable to seek investments that generate multiple benefits, rather than a single benefit. This fashion can be counterproductive in some cases.

Over the past year or so, in talking to Australian government officers responsible for environmental programs, and to the catchment management bodies they fund, I have been struck by the focus that everyone now has on the achievement of ‘multiple outcomes’ or ‘multiple benefits’ from environmental investments. The basic idea is that funds should be allocated so that each dollar does more than one job: mitigates salinity, protects biodiversity, stops soil erosion, and reduces sediment and nutrients in waterways, all at the same time if possible.

In a talk I gave at a Natural Resource Management conference last October, I said several things that could have been seen as controversial, but the one that got the biggest response by far was to suggest that seeking multiple outcomes is not necessarily the best thing. It seems like the idea has achieved the status of a sacred cow, with the resulting danger that people have stopped thinking critically about it.

I should say up front that I don’t think there is anything intrinsically wrong with going for multiple benefits if it makes sense to do so. But it doesn’t always make sense to do so. I have a number of concerns about the current level of emphasis given to it in Australia.

For one thing, it doesn’t necessarily follow that all investments addressing several environmental issues should be preferred to all investments addressing only one environmental issue. A focus on generating multiple benefits may lead investors away from protecting some very valuable assets that are only facing a single threat. Even if there is only a single threat to an asset, it may be that the severity of that threat is very high – potentially higher than a combination of threats to another comparable asset.

Further, an asset facing several threats is probably less easily protected than another asset facing only one environmental threat. If there are several threats requiring attention, it is highly likely that the asset in question will be especially expensive to protect. Given that budgets are limited, this greater expense tends to reduce the attractiveness of a strategy that would effectively protect that asset at the expense of several other more cheaply protected assets.

In some cases, I see the multiple-output slogan being used as an excuse for some pretty loose decision making about funding of environmental works. Even if going for multiple benefits, it is still important to be able identify what the levels of different benefits are likely to be, but this sometimes seems to be overlooked.

I am particularly concerned with dryland salinity being addressed within a multiple-outcome framework. In most cases, the degree of intervention needed to successfully contain dryland salinity in a location is very high, and requires a very focussed effort. Many of the less-focussed investments in land-use change by catchment management bodies will have little effect on salinity. However, I still hear people speak of salinity as one of the likely benefits. There seems to be too little attention given to quantifying the likely benefits of investments, even in broad terms.

It is useful to compare the issue with a similar problem facing farm managers. Some farming practices involve multiple benefits (and costs) on farm. For example, farmers in a mixed farming system may select to grow pastures in rotation with crops, and generate several types of benefits: feed for livestock, nitrogen fixation by legume pasture plants, increased choice of weed management strategies, reduced crop disease, and diversification of income sources. In considering whether to include a pasture phase, farmers are likely to consider a number of these factors, and ultimately make a decision that generates multiple benefits. However, I would make the following observations:

(a) The farmers probably don’t focus equally on all of the types of benefit. There will probably be one or two overriding considerations, and the other, smaller, benefits will be accepted as welcome bonuses.

(b) For the main benefit types, the farmers strive to have enough information about the likely levels of each type of benefit to make their decision. They don’t invest on the basis on an unquantified, poorly defined collection of benefits.

(c) Farmers undertake a range of practices, some of which are relatively simple, with only one source of benefit, and some of which are more complex, with multiple benefits. They don’t only invest in practices with multiple benefits, but they weigh up all practices based on their overall merits.

One could say almost exactly the same three things about a group of prospective car purchasers. The benefits of a car for me consist entirely of providing transport, but for other people, there are benefits from prestige, engine power, aesthetics, etc. Each of us collects different types of information about the cars we are considering, to suit our particular goals. Even if I seek more than one type of car benefit, I don’t necessarily require all of those benefits in all my car investments. For example, within the family we have a family sedan and a four-wheel drive.

A well-balanced portfolio of environmental investments would also have the above three features. Even where an investment does generate multiple benefits, it is likely to have one or two major types of benefit that should be the main focus, with other benefits being welcome, but not the main focus. For those benefits that are a main focus, the best available information is collected and used. And the investment portfolio includes a mix of single and multiple outcome investments.

I think that the current focus on multiple benefits is overdone. We should gladly accept them if they come along, but seeking multiple benefits per se might easily be counterproductive if there are more valuable single-benefit investment options available.

David Pannell, The University of Western Australia