259 – Increasing environmental benefits

It is obvious that the budgets of our public environmental programs are small relative to the cost of fixing all of our environmental problems. If we want to achieve greater environmental benefits from our public investments, what, in broad terms, are the options?

I remember seeing a graph last year – I think it was from the Australian Bureau of Statistics – showing the level of concern felt by the Australian community about environmental issues. It looked to have peaked a few years ago, and was pretty flat, or slightly declining. In that context, the prospects for a big increase in environmental spending over time don’t look good, particularly given the general tightness of government budgets. So I was wondering, if we wanted to double the environmental values protected or enhanced by our public programs, what are the options? I was able to identify several. I’ll list them here, and briefly comment on their potential effectiveness, cost and political feasibility.

  1. Double the budget. Effectiveness: high (in the sense that we could actually double the environmental benefits generated). Cost: high. Politics: very unlikely in the foreseeable future. It wouldn’t be my first priority, anyway. Increasing the budget would be more effective if we first delivered some of the strategies below.
  2. Improve the prioritisation of environmental investments. Improve the usage of evidence, the quality of decision metrics (Pannell 2013), and the quality of evaluation of proposals. Effectiveness: high (because most programs currently have major deficiencies in these areas). Cost: low, especially relative to doubling the budget. Politics: Implies a higher degree of selectivity, which some stakeholders dislike. Probably means funding fewer, larger projects. Achievable for part of the budget but the politics probably require a proportion to be spent along traditional lines (relatively unprioritised).
  3. murray_riverEncourage more voluntary pro-environmental action through education, persuasion, peer pressure and the like. Effectiveness: commonly low, moderate in some cases. Cost: moderate. Politics: favourable.
  4. Increase the share of environmental funds invested in research and development to create pro-environmental technologies (Pannell 2009). Note that this is about creation of new technologies, rather than information. Examples could include more effective baits for feral cats, new types of trees that are commercially viable in areas threatened by dryland salinity, or new renewable energy technologies. Feasibility: case-specific – high in some cases, low in others. Cost: moderate. Politics: requires a degree of patience which can be politically problematic. Also may conflict with community desire to spend resources directly on on-ground works (even if the existing technologies are not suitable). There tends to be a preference for research funding to come from the research budget rather than the environment budget, although this likely means that it is not as well targeted to solve the most important environmental problems.
  5. Improve the design of environmental projects and programs. Improve evidence basis for identifying required actions. Improve selection of delivery mechanisms. Improve the logical consistency of projects. Effectiveness: high (because a lot of existing projects are not well founded on evidence, and/or don’t use appropriate delivery mechanisms, and/or are lacking in internal logical consistency). Cost: low. Politics: Implies changes in the way that projects are developed, with longer lead times, which may not be popular. There may be a perception of high transaction costs from this strategy (although they would be low relative to the benefits) (Pannell et al. 2013).
  6. Increase the emphasis on learning and using better information. Strategies include greater use of detailed feasibility studies, improved outcome-oriented monitoring, and active adaptive management. Effectiveness: moderate to high. Would feed into, and further improve, options 2 and 5. Cost: low. Politics: main barrier is political impatience, and a view that decisions based on judgement are sufficient even in the absence of good information. Often that view is supported/excused by an argument that action cannot and should not wait (which is a reasonable argument in certain cases, but usually is not).
  7. Reform inefficient and environmentally damaging policies and programs. Examples include subsidies for fossil fuels, badly designed policies supporting biofuels in Europe and in the USA, and agricultural subsidies. This strategy is quite unlike the other strategies discussed here, but it has enormous potential to generate environmental benefits in countries that have these types of policies. Successful reform would be not just costless, but cost-saving. Effectiveness: very high in particular cases. Cost: negative. Politics: difficult to very difficult. People with a vested interest in existing policies fight hard to retain them. Environmental agencies don’t tend to fight for this, but there could be great benefits if they did.

In my judgement, for Australia, the top priorities should be strategies 2 and 5 followed by 6. Strategy 4 has good potential in certain cases. If these four strategies were delivered, the case for strategy 1 would be greatly increased (once the politics made that feasible). To succeed, strategies 2, 5 and 6 would need an investment in training and expert support within environmental organisations. Over time, in those environmental organisations that don’t already perform well in relation to strategies 2, 5 and 6 (i.e. most of them), there may be a need for cultural change, which requires leadership and patience.

In Europe and the USA, my first choice would be strategy 7, if it was politically feasible. After that, 2, 5, 6 and 4 again.

Further Reading

Garrick, D., McCann, L., Pannell, D.J. (2013). Transaction costs and environmental policy: Taking stock, looking forward, Ecological Economics 88, 182-184. Journal web site

Pannell, D.J., Roberts, A.M., Park, G. and Alexander, J. (2013). Improving environmental decisions: a transaction-costs story, Ecological Economics 88, 244-252. Journal web siteIDEAS page

Pannell, D.J. (2009). Technology change as a policy response to promote changes in land management for environmental benefits, Agricultural Economics 40(1), 95-102. Journal web page ◊ Prepublication version

Pannell, D.J. (2013). Ranking environmental projects, Working Paper 1312, School of Agricultural and Resource Economics, University of Western Australia. IDEAS page ◊ Blog series

10 Comments

  • John Rodger
    3 December, 2013 - 7:23 am | link

    David Pannell’s discussion piece #259 on Increasing Environmental Benefits and his 7 action points are a very useful contribution to thinking about how we find an effective pathway through the competing options for funding and action. The Wildlife Biodiversity CRC bid currently in consideration for funding from 2014 for eight years proposes interdisciplinary research (social sciences, biology disciplines and systems analysis) to address aspects of all seven of these options. In particular we would agree with David’s top priorities for Australia in the wildlife area. That is to improve prioritisation of investments, what we term better policy, improved design of projects and programs, better plans, and increased learning and better information, for better community engagement. We would argue that we cant wait to explore new pro-environmental technologies or we will remain ill-equipped to repair the damage done and meet future challenges.

    • 3 December, 2013 - 8:20 am | link

      Thanks John. I’m not advocating technology development as a general solution, but in certain cases it clearly is the best solution, even if it requires a wait. The classic example is dryland salinity in Australia. The other thing is that it’s not necessarily a case of either/or. If it was feasible to develop improved technologies for feral animal control, we could work on that at the same time as continuing (or even expanding) existing programs based on old technologies. Climate change is another obvious example where technology development needs to be a major part of the strategy. (I’ve just re-read your last sentence, and I’m worried I may have misinterpreted it. Let me know if I have.)

  • Rob Fraser
    3 December, 2013 - 3:41 pm | link

    Good one Dave – but on 1 – if you doubled the budget, but you had been prioritising the existing budget correctly, then you wouldn’t double the exisitng environmental benefits?

    • 3 December, 2013 - 8:15 pm | link

      That’s true. Of course, the existing budget is not prioritised correctly. Even so, I agree, it wouldn’t exactly double, only approximately.

  • 3 December, 2013 - 4:06 pm | link

    Don’t discount Option 7 for Australia too Dave!

    • 3 December, 2013 - 8:10 pm | link

      Fair enough. The problems aren’t as great here, but I agree that they exist.

  • Rob Fraser
    4 December, 2013 - 12:16 am | link

    Thanks Dave – well if it is badly prioritised then you could more than double the benefits becuase you might start funding the good ones!

  • Will
    5 October, 2016 - 12:56 pm | link

    Dear David – interesting to see you link to the work of my former colleagues at ODI on fossil fuel subsidies (in the guardian). You might therefore also be interested in work I did with the same author on subsidies to agricultural commodities linked to deforestation, published in 2015 and also reported on by the guardian.

    https://www.theguardian.com/environment/2015/mar/31/subsidies-to-industries-that-cause-deforestation-worth-100-times-more-than-aid-to-prevent-it

    • 5 October, 2016 - 2:35 pm | link

      Thanks Will. I hadn’t seen that report. Very interesting and important.

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