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.

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