Monthly Archives: March 2008

122 – Effective environmental policy

In PD#121, I talked about the new national environment policy in Australia, “Caring for our Country“. Much of the important detail of how the program will operate is not yet available. Here I will pull together lessons from our research on environmental policy in recent years, to identify key issues that designers and managers of such a program need to address if it is to be effective in achieving environmentally valuable outcomes.

1. Account well for technical knowledge

This means making sure that investments are based on good knowledge about (a) the degree of threat or damage to an environmental asset, and (b) the extent to which this threat or damage can be reduced by particular changes in management. Environmental investments usually do account for the first of these, but it is remarkable how often the second one is overlooked, resulting in investments that produce little or no environmental gains. In many cases, generic knowledge about an issue is not sufficient – we need locally specific knowledge. Environmental managers should be allowed (or indeed encouraged) to invest in research to fill key knowledge gaps.

2. Account well for known behavioural responses to policy interventions

If the works or changed practices needed to protect the asset require changes in behaviour by private land or water managers, ensure that investment decisions consider whether those works will be attractive or unattractive to the people who would have to adopt them. There are many well understood reasons why conservation practices can be unattractive to land and water managers (Pannell et al., 2006). If the practices are highly unattractive, it will be expensive and difficult to get them adopted, and the viability of investing in that asset will be reduced. It is important to appreciate that, even if the works are relatively attractive when implemented at small scale, they may be highly unattractive at large scale. Thus the consideration of this issue needs to factor in the required scale of response, based on the available technical knowledge.

3. If the available responses are unattractive to land and water managers, consider investment in technology development

The idea is to create new potential management responses that are just as environmentally beneficial, but are much more attractive to landholders than the existing options. This can be much more effective than trying to force the adoption of existing practices that are highly unattractive to managers.

4. Ensure that adaptation and informed inaction are adequately considered

Not every environmental problem can or should be fixed. Sometimes the best response is to accept the changed circumstance, and attempt to make the best of it. Throwing money at attempts to fix intractable problems requiring extremely expensive works means that many other more tractable environmental problems will not be addressed.

5. Target environmental investments well

There is a strong tendency for environmental programs to spread their resources across investments of widely differing merits. Some are really worthwhile, and some are not worthwhile at all. The highest priority environmental investments should have at least these four characteristics: (a) particularly valuable environmental assets, (b) facing high threat or high current degradation, (c) with high feasibility of reducing that threat or degradation at reasonable cost, (d) with the required works being reasonably attractive to land or water managers. If even one of these elements is neglected, there is a high risk of selecting poor investments.

6. To achieve 5, use a good integrated decision framework, such as SIF3 or INFFER.

7. Exercise patience

Patience is needed in the planning phase to ensure that good investments are selected. Some environmental programs have a tendency to rush into spending money on on-ground works before the analysis has been done to check whether these works can even make a reasonable difference to environmental outcomes. Patience is also needed in cases where there is a lack of highly adoptable conservation practices, as we wait for our investment in technology development to bear fruit.

8. Take as much care in selecting policy tools as you do in selecting the environmental assets to invest in

Often we make reasonable decisions about which assets to invest in, but then very poor decisions about which policy tool to use. Should it be grants, economic instruments, regulation, technology development, other R&D, communication/education, engineering works, or informed inaction? My Public: Private benefits framework (Pannell, 2008) provides strong advice about these decisions.

9. Set realistic targets that are useful for monitoring and evaluation

Programs often set unrealistic targets. The targets should be consistent with the known bio-physical information about the asset’s response to management, the known behavioural responses of land and water managers to policy interventions, and the resources available under the program. Clearly, you cannot select such targets unless you have already met requirements 1 to 8 above. Mostly we use targets that are, more or less, pulled out of the air.

10. Focus monitoring and evaluation on outcomes, in a way that is linked to decision making

A much stronger focus on outcomes is needed than we have seen in recent programs, and this includes the focus of monitoring and evaluation. Monitoring and evaluation tends to focus on accountability for funds spent, but to neglect the achievement of environmental outcomes. It is important to appreciate that for those environmental problems with long time lags between action and environmental response (e.g. salinity), the only evaluation that makes sense on a management time scale is through computer modeling. It should use the same sorts of analysis tools that were used to plan the investment. Indeed, such evaluation should really be an outgrowth of the planning process – effectively an updating of it, as part of an adaptive management strategy.

11. Be careful that the program is not having unintended adverse consequences

It is all too easy to have unintended adverse consequences. For example, in Australia many trees were planted to try to prevent dryland salinity caused by rising groundwater, but often without regard to their impacts on surface water yields into waterways. Don’t focus the attention of the program too narrowly.

12. Make sure there is a sufficient probability that non-compliance with environmental contracts and regulations will be detected and that penalties for non-compliance are sufficient

There is a strong tendency for enforcement of environmental contracts or environmental regulations to be weak and spasmodic. The cost of good enforcement is high, so there is a balance to be struck, but the levels we usually see are too low.

13. Be careful not to create community expectations that can’t or shouldn’t be met

Australian environmental programs over the past 20 years or so have created expectations among landholders that they should all be able to obtain benefits from the programs. This makes it very difficult for environmental managers to target their investments in a cost-effective way, especially if the programs require environmental managers to consult with the community in selecting their investments. Again there is a difficult balance to be struck, this time between consultation and hard-nosed decision making, but in recent years we have obviously got this balance wrong.

14. Support environmental managers appropriately

Policies inevitably involve someone having to make decisions about where and how the public money should be spent. These are very difficult decisions, and the decision makers need strong support to make them. They need good data; advice about appropriate decision frameworks and principles; access to appropriate skills; time and resources to consult appropriately; and they need to not be rushed into poor decisions to meet political time lines.

15. Make sure that the program creates incentives for environmental managers to pursue environmental outcomes and minimises incentives to do otherwise

The system needs to reward and support those managers who can demonstrate that their investment decisions really are leading to environmental outcomes. In my view, programs should often be tougher in withholding funds from environmental managers who cannot demonstrate this, both on the technical side (e.g. through modeling or other analysis) and on the socio-economic side (e.g. economic evaluation of proposed new practices from the landholder’s perspective). One of the traps that programs often fall into is to create pressures for those making the investment decisions to focus on things other than environmental outcomes – things such as getting the money spent by a certain date, meeting various political or community expectations, accounting for financial expenditures, and spending money on on-ground works even if we lack evidence that those works would achieve anything.

I’ve been writing a critique of the “Natural Action Plan for Salinity and Water Quality” (the NAP, which is coming to an end in June), to present at the International Salinity Forum in Adelaide next week. Sadly, I was able to create the above list of ideal policy characteristics by listing all the features that the NAP did not have. I’m hoping that the new “Caring for our Country” program will learn from the mistakes we have already made. As Peter Cullen regularly said, it’s better to make new mistakes. Early signs are that at least some of the lessons are being picked up, although it is still hard to be confident about this from the published material (as of March 26).

David Pannell, The University of Western Australia

Further Reading

Pannell, D.J., Marshall, G.R., Barr, N., Curtis, A., Vanclay, F. and Wilkinson, R. (2006). Understanding and promoting adoption of conservation practices by rural landholders. Australian Journal of Experimental Agriculture 46(11): 1407-1424. Access paper at Journal web site here. Pre-publication version available here (161K).

Pannell, D.J. (2008). Public benefits, private benefits, and policy intervention for land-use change for environmental benefits, Land Economics 84(2): 225-240. See here.

121 – New environment policy “Caring for our Country”

The new national policy program for the environment and natural resource management has been announced. Details here. What has changed? Which changes are for the better? What is worse?

It is late 2000. I am at a national salinity conference in Bendigo, Victoria. The Australian Government has recently announced a new $1.4 billion program, the National Action Plan for Salinity and Water Quality. All the conference delegates are at a session where officers from the Government are outlining the program. In question time, I’m the first one with my hand up. I describe a few of the program’s fatal weaknesses (Pannell, 2001a), and finish by predicting that, in seven years time, we’d look back at the program and say that it achieved almost nothing. Most of the audience is delighted, not because they agree necessarily, but because I’ve woken the place up. The speaker is dumbfounded. He manages to get out that I’m wrong because … because … well, because there is a lot of money in the program. At coffee break, reactions range from “good on you”, to “you’ve made a big mistake”, to “have you actually read the policy document?” (the latter from another Government officer).

Well, here we are at the end of the program, and we can safely say that it achieved almost nothing against salinity. There are some exceptions, but most of the money was spent on extension to promote practices that were not adoptable at the required scale, and poorly targeted small temporary incentive payments. In most cases, the changes in land management that were prompted were much too small to make a difference and/or were in the wrong places. The Australian National Audit Office reported recently that the program could not prove that it had made a difference (here). That’s being polite.

On March 14, the new Government announced its program that is to replace both the salinity program and the Natural Heritage Trust. With this announcement, the fall of salinity as a high priority environmental policy issue in Australia is complete. The word “salinity” does not even appear in the new documents, except when they refer by name to the old program. Salinity has gone from having a major national program of its own, to being one fifth of the planned program under the previous government, to completely disappearing. Of course it will still be an issue that is addressed under other headings, but the change is still remarkable.

It is probably an over-reaction. Salinity was and is an important problem. But it needed a program that was well designed and which considered the science and the human dimension well.

What about the new program, called “Caring for our Country”?

The announcement of the program was not a moment too soon for the 56 regional Natural Resource Management (NRM) bodies around the country, many of whom have been losing staff, facing financial stresses, and worrying about their futures as we approach June 30.

The regional bodies will be glad that the wait is over, but very unhappy with what has been announced. In PD#119 I suggested that a reduction in funding for regional bodies appeared likely, but the reduction is much greater than I expected it would be. The program includes core funding of $127 million per year for the regions, just over $2 million per region per year, on average. I think this is less than half of what they have been getting, on average.

Beyond that core funding, the regions are able to bid for funds to undertake specific projects determined by the government. From the regional perspective, a lot will hinge on how successful their bidding is. To secure funds that previously would have come straight to them, they will now have to compete with government agencies, local government, non-government organisations, universities, businesses and industry bodies.

This is hard on those regions that were performing well, but overall I think it is a very positive change. Hopefully the competition will drive all involved to lift their performances and allow us to target investments to achieve greater outcomes from the program budgets. There will be considerable transaction costs involved in the bidding process, but this should be more than compensated for by a better focus on outcomes.

A crucial question about this is not answered in the publicity materials: how will the new targets be selected? Some areas of investment have been announced, based on election promises. Now, elections are probably the worst possible times for making important decisions about funding, as political considerations dominate all others. Most of the Labor party’s environmental promises hardly registered in the election campaign, but here they are as core elements of the new program, a grab bag of issues with political resonance:

  • rescue the Great Barrier Reef ($200 million)
  • repair our fragile coastal ecosystems ($100 million)
  • save the endangered Tasmanian Devil ($10 million)
  • improve water quality in the Gippsland Lakes ($5.25 million)
  • fight the Cane Toad menace ($2 million)
  • employ additional Indigenous Rangers ($90 million)
  • expand the Indigenous Protected Area network ($50 million)
  • assist Indigenous Australians enter the carbon trading market ($10 million)”

I wonder where these amounts came from. Some of them look way too small to rescue, repair, save, improve or fight.

These promises plus the core funding for regions amount to about half of the program funding of $2.25 billion. How will investment targets for the rest of the money be selected? The publicity material makes much of a “business approach” and “value for money”, but how will that be achieved? Will funds be targeted more tightly to achieve outcomes? How will policy mechanisms be chosen? How will science be used? How will the human dimension be considered? In short, what investment framework or decision framework will be used? We aren’t told. There is a great opportunity to do better here, but it would also be easy to make a big step sideways, or even backwards given the risks of centralised decision making.

A major problem in the past programs was that science was largely sidelined. Funding of science by regions to fill key knowledge gaps was discouraged, highly constrained, or absolutely prohibited, depending on which state you were in. In any case, the time frames for planning were too fast for science to play a sensible role. The use of science to provide improved technologies for environmental management was not recognised at all. Unfortunately, “science” is another word that doesn’t appear at all in any of the documents for the new program. Perhaps it is implied within “business approach” and “value for money”, but if so, that is worryingly obtuse.

One of the fashionable areas of environmental policy in Australia has been economic policy instruments, known locally as market-based instruments (MBIs). Before the announcement I heard one fear expressed that the Government would be seduced by the MBI fad and would make them the cornerstone of the new program. Instead we got the opposite: no mention of MBIs at all. Perhaps the idea of using markets conflicts with the Ministers’ ideologies (one, at least, is relatively left-leaning). I’m not unhappy about this outcome. Expectations about the benefits of using MBIs have been excessive for some time (Pannell, 2001b). They could perhaps still feature within some of the individual investments.

In one of the documents about the new program it says, “We expect that the regional bodies will be well placed to get a good proportion of the funding [to address centrally determined targets].” It will be interesting to see whether that turns out to be true. Some of the regional bodies act mainly as “middle men”, channeling funds through to service providers such as consultants or state government agencies. If the Australian Government knows its objectives, why wouldn’t they contract directly with the providers? Regional bodies may try to do more things in-house, in order to capture a bigger share of the resources.

Another change from the previous programs is that there is no mention of matching state funding. Previously, state governments had to provide half the funds in order for national funds to flow to their states. If they are indeed stepping away from that approach, I think that is a positive change. The previous system meant that a huge proportion of the public funding eggs got placed in the regional NRM basket. In some cases, state funds were diverted from good programs into a very poor program. More diversity would have been better. If the matching-funds principle has been abandoned, considerable state funds could be freed up. An unintended consequence of that could be that state agencies are even more competitive against regional bodies in the battle for program funds.

With any program, the devil is in the detail. With the National Action Plan in 2000, just enough detail was released for it to be immediately apparent that it would not work. With Caring for our Country, it is much harder to tell. From what is public so far, there are grounds for hope, but equal grounds for concern.

David Pannell, The University of Western Australia

Further Reading

Pannell, D.J. (2001a). Salinity policy: A tale of fallacies, misconceptions and hidden assumptions, Agricultural Science 14(1): 35-37. Full paper (26K)

Pannell, D.J. (2001b). Harry Potter and the pendulums of perpetual motion: Economic policy instruments for environmental management, Connections: Farm, Food and Resource Issues 1: 3-8. (39K)

120 – The Landcare boom

In the 1990s, the centrepiece of policy for natural resource management in Australia was the National Landcare Program. Responses from readers of my last Pannell Discussion have identified various segments within the group of Landcare policy stakeholders, and pointed out that they had different motivations for supporting the policy. These motivations were not always related to the achievement of natural resource outcomes.

Neil Barr, a social scientist from Victoria, provided a detailed response to my comments about Landcare in the last Pannell Discussion (PD#119). This PD is sprinkled with quotes from his email (reproduced with permission).

His comments reinforce my observation that there was a Landcare boom, a wave of unrealistic enthusiasm, which came and went. There is still a National Landcare Program, with its regular conferences and awards for great work, and many regional Landcare coordinators working with farmers. But Landcare is no longer the main plank in the government’s environmental policy, and overall there is much less enthusiasm and more realism than there was.

Neil was one of the earliest public critics of Landcare, including in a conference paper from 1994 (Barr, 1994).

“The paper made some criticisms of Landcare back when it was extremely unfashionable to do so. In fact, it could be bad for one’s career, as a colleague of mine discovered. The paper argued that a number of implicit beliefs about Landcare were myths, including:

Myth 1: Landcare is a universal extension mechanism.

Myth 3: We need to develop a Landcare ethic in the farming community.

Myth 4: Landcare is a mechanism to achieve Integrated Catchment Management

Myth 6: Landcare needs plans but not priorities.”

In PD#119 I pointed out that there had been reservations about the more recent regional model for NRM, but that in general people just got on with trying to make it work. Neil observes that something similar happened with Landcare too:

“I wasn’t the only one thinking these thoughts in the midst of the Landcare boom. I took a private poll of opinions of facilitators and extension staff amongst others as part of this paper. Most were too apprehensive to say anything in public.”

How is it that a program can continue to garner active support even when many stakeholders have reservations about it? Neil astutely breaks down the pool of policy stakeholders into several distinct segments, and points out that they had different reasons for supporting the program:

“1. The passionate enthusiasts who built the rhetoric and the myths with the best of intentions.

2. Policy naïves who generally had no experience of service delivery, but who grabbed Landcare and ran with it, without really questioning the assumptions. I think they fell into a common trap: seeking a cheap solution as a substitute for expensive investment in outcomes. Any inexpensive solution to a complex policy problem is an illusion. Convenient illusions are the most seductive.

3. The quiet doubters who did not believe the myths, based on their own experience on the ground. Often they realised their careers were dependent on the latest policy enthusiasm and felt it best to shut up and get on with it, or to quietly resist.

4. Policy cynics who didn’t believe the claims, but who saw an appearance of belief as necessary to maintain funding.

5. Farm representatives who saw Landcare as a vehicle to defuse urban community concern for the environment. It was a relatively low-cost and unthreatening option compared with regulation.”

My colleague Sally Marsh pointed out that the policy naïves tended to be strong believers in Myth 3 – they had no idea about the weak link between awareness (or even attitudes) and action. Sally also commented that the quiet doubters and policy cynics were crucial in supporting Landcare. They formed a sort of Landcare industry, and they came to rely on the program for resources and employment.

Support for the program by each of these groups tended to reinforce each other, with the result that they swamped the few members of a sixth segment, consisting of the cautious and the skeptics still interested in debating the assumptions behind Landcare.

Relating this to my proposal that there developed a zeitgeist in favour of Landcare, it indicates that any zeitgeist that existed was very complex. It included elements of genuine passion and belief, naïvity, self censorship, security of employment, some empire building, and self defense. Such a mixture of mutually reinforcing interests is hard to counter because there is such a diversity of views and motivations involved. Pointing out weaknesses in the program would not even be relevant to several of the groups – they already knew.

Neil Barr suggests, and I’m inclined to agree, that this sort of thing is not unique to Landcare, but is relevant to other government programs; people and institutions generally will try to fit in with policy directions in order to capture funds:

“We can look back now and see the same sorts of behaviours in the Natural Heritage Trust, the National Action Plan or Salinity and Water Quality and the early water debates.”

In each case, there is a variety of interests with different reasons to support a new program or policy direction, and there is an unwillingness to consider dissenting voices until we reach an appropriate point in the policy cycle (and they are still not particularly welcomed then, of course). To me it highlights how careful policy makers should be when they embark on policy experiments, because the very existence of a program brings about vested interests in its continuation.

David Pannell, The University of Western Australia

Further Reading

Barr, N. (1994). Landcare from inside-out and outside-in. The Australian Farm Manager 5, 2–10.