INFFER _Investment Framework For Environmental Resources_

Document Sample
INFFER _Investment Framework For Environmental Resources_ Powered By Docstoc

(Investment Framework For Environmental Resources)

    Background and Overview
· Budgets small compared to the problems
· Environmental protection more expensive
  than we’ve often allowed for
· Spatial heterogeneity
· Prioritisation is essential but difficult

         Institutional context
· Concerns about outcomes from regional
· Treasury, Australian National Audit Office
  concerns about value for public money from
  NRM investment
· Greater focus on outcomes in Caring for our
  Country and by some state governments

 What does INFFER help with?
· How to get value for money from NRM
· What is realistic/feasible?
· Appropriate delivery mechanisms?
· Project design
· Give confidence to funders

            General emphases
·   Natural assets
·   Outcomes
·   Value for money
·   Multiple threats
·   Multiple asset types
·   Technical & socio-economic (equal emphasis)
·   Policy tools/delivery mechanisms
·   Transparency

       Regional testing and use
· South West (WA)              ·   Northern Rivers (NSW)
· Avon (WA)                    ·   Namoi (NSW)
· South Coast (WA)             ·   North East (Vic)
· Northern Agric (WA)          ·   North Central (Vic)
                               ·   Corangamite (Vic)
· Rangelands (WA)
                               ·   West Gippsland (Vic)
· Perth (WA)
                               ·   East Gippsland (Vic)
· Lachlan (NSW)
                               ·   Goulburn Broken (Vic)
· Central West (NSW)           ·   Port Phillip & Westernport
· Border Rivers/Gwydir (NSW)       (Vic)

         Based on experience
· Builds on lessons from previous frameworks and
  from use by 15 regions
· As simple as possible, but comprehensive
· Highly structured and guided process
  ¨ Template
· Actively supported
  ¨ Help desk
  ¨ Workshops
  ¨ Regular phone-hookup meetings
· Fully documented
  ¨ All documents freely available at

                                       River reach
    Asset types                        •Intact native veg
                                       •Cultural heritage
                                       •Woodland birds

•Listed on register                    Threatened species
•Last of its type                      •Flagship
                                       •Critically endangered

                      Native vegetation
                      •Concentration of threatened species
                      •Near pristine condition
                      •Important location
          What is the output?
· An assessment for each asset
  ¨ Background information about the asset
  ¨ A specific, measurable, time-bound goal
  ¨ On-ground works that will achieve that goal
  ¨ Delivery actions that will result in those works
  ¨ Information about asset value, threats/damage,
    technical feasibility, socio-economic feasibility,
    urgency, cost, risks
  ¨ Benefit:Cost Ratio (comparable across projects)

        What sorts of projects?
· Ones that will deliver NRM outcomes for
  identifiable natural assets, which can be
  ¨ large or small
  ¨ degraded or pristine
  ¨ localised or dispersed
  ¨ any sort of natural asset
· Not
  ¨ Untargeted capacity building
  ¨ M&E not linked to a specific project
  ¨ R&D not linked to a specific asset

INFFER Pre-Assessment Checklist
Asset focus
1. Can you clearly identify the environmental or natural resource
2. Will it be possible to define a goal for the asset that is

3. Is there evidence to indicate that management actions can
   make a real difference?
4. If the desired management actions are mainly on private land,
   is it likely that those actions would be reasonably attractive to
   fully informed land managers when adopted over the required
5. If the project requires change by other institutions is there a
   good chance that this will occur?

North Central


The INFFER Process
            INFFER process
· Can be applied to individual assets
  ¨ Run small number of cherry-picked assets
    through the process
  ¨ Helps with project development
  ¨ Helps assess whether it is worth pursuing the
· Better to be a comprehensive process
  ¨ Community consultation + other info sources
  ¨ A more comprehensive look at the project options

      Comprehensive process
1. Develop a list of significant natural assets in the
    relevant region(s)
2. Apply an initial filter to the asset list, using a
    simplified set of criteria
3. Define projects and conduct detailed assessments
    of them
4. Select priority projects
5. Develop investment plans or funding proposals
6. Implement funded projects
7. Monitor, evaluate and adaptively manage projects

     Rationale for the process
· Starts broad, with far too many assets
· Reduce list somewhat with simplified
  ¨ No point in great sophistication at this
· Few enough make it through to make
  a good assessment practical

      How long does it take?
· New user: around 5 person-days per asset to
  complete Project Assessment Form
· Experienced user: 1-2 days per asset, if
  information and experts accessible
· Could be extended to encompass detailed
  modelling if desired

        What skills needed?
· Ideally, good knowledge of asset(s)
· Able to engage with experts
· Understand NRM projects – some experience
  in implementation
· Capture and interpret technical and socio-
  economic information
· Make judgements based on partial

    INFFER and knowledge gaps
·   Makes the best of the available info
·   Captures key knowledge gaps
·   Ratings for quality of information
·   Possible outcomes
    ¨ Project to fill knowledge gaps
    ¨ Data collection/investigation within the project
    ¨ Feasibility assessment as phase 1 of project
· Captures risks of project failure


Project Assessment Form
    Project Assessment Form
· Completed for every project
· Could be more than one alternative project
  for the same asset
· Guided process to collect the required
· Detailed instruction manual

    Project Assessment Form
· Web-based
  ¨ Instructions hidden until needed
  ¨ Automate calculations
  ¨ Easy navigation
  ¨ FAQs
  ¨ Example responses

                1. The asset
·   Spatial definition of the asset
·   Significance/importance of the asset
·   Key threats
·   Existing projects

            2. Goal, works
· Setting a specific, measurable, time-bound
· On-ground actions to achieve goal
· Actions by other organisations
· Time lags until benefits
· Effectiveness of works
· Risk of technical failure
· Spin-offs (positive and negative)

         3. Socio-economics
· Anticipated adoption of works by private
  land/water managers
  ¨ Encompasses community capacity and
· Risk of practice changes for the worse
· Approvals
· Socio-economic risks

                4. Budget
· Delivery mechanisms
  ¨ Private citizens
  ¨ Other organisations
  ¨ Works, investigation and management
· Costs
  v Up front (3-5 years)
  v Long-term maintenance costs

              5. Project info
·   Project title
·   Project summary
·   Funder’s targets and outcomes
·   Outputs and intermediate outcomes


Public and private benefits
  and choice of NRM policy instruments
 Public: private benefits framework
· Selects the most appropriate policy tool for
  a given circumstance
· Relevant to change on private land

    Public and private benefits
· “Private benefits” relate to the landholder
  making the decisions
· “Public benefits” relate to all others
  ¨ neighbours, downstream water users, city
    dwellers interested in biodiversity

                  Possible projects

Each dot is a set of
land-use changes
on specific pieces       Lucerne
                         Farm B
of land = a project.                          Lucerne
                                              Farm A

Which tool?                        Current
• Incentives
• Extension
• Regulation
• New technology                               Forestry in
• No action                                    water

    Alternative policy mechanisms
                  for seeking changes on private lands

Category                  Specific policy mechanisms included

Positive incentives       Financial or regulatory instrumentsA to encourage
Negative incentives       Financial or regulatory instrumentsA to inhibit change
Extension                 Technology transfer, education, communication,
                          demonstrations, support for community network
Technology change         Development of improved land management options,
                          e.g. through strategic R&D
No action                 Informed inaction

 Includes polluter-pays mechanisms (command and control, pollution tax, tradable permits,
offsets) and beneficiary-pays mechanisms (subsidies, conservation auctions and tenders).

                     Simple rules
            for allocating mechanisms to projects
1. No positive incentives for land
    -use change unless public net
    benefits of change are
2. No positive incentives if
    landholders would adopt land
    -use changes without those
3. No positive incentives if
    overall costs outweigh

Simple public-private framework

               How applied
· Project Assessment Form collects info
· Public net benefits
  ¨ Asset significance
  ¨ Threats, Effectiveness of works
  ¨ Time lags, Risks
· Private net benefits
  ¨ Adoption of the required works
· Does not dictate mechanisms: you choose


Benefit: Cost Ratio
           The BCR

An index of benefits from the project
  Total costs (project and ongoing)

   V´W                A´B               F´P´G                   1/(1 + r)L
 V: asset value      A: adoption         F: feasibility     L: time lag to benefits
W: effectiveness    B: compliance      P: socio-political       r: discount rate
    of works                         G: long-term funding

        Potential      E(prop’n                                Discount
                                             Risk of
         project    ´ of required     ´ (1 -                ´ factor for
                                             failure )
         benefits      adoption)                              time lags
BCR = ──────────────────────────────────────────────────
                                    Project cost

                                C + PV(M+E) ´ G
                                      C: project cost
                               M: annual maintenance cost
                            E: polluter-pays compliance costs
                         PV: summed present value over 20 years
                                   G: long-term funding

· Can compare large and small projects
· Can compare short and long projects
· Allows comparison of projects for different
  types of assets
  ¨ Waterways
  ¨ Wetlands
  ¨ Vegetation
  ¨ Threatened species
  ¨ Agricultural land

       Example BCR ranking
    Project      Benefit: Cost Ratio   Budget

       4                10.0            $3m
       2                 8.1           $13m
       5                 7.2            $1m
       1                 4.0            $0.5
       6                 1.1            $1m
       3                 0.8            $9m

If budget = $17m, preferred projects are 4, 2 & 5

      Advantages of the BCR
· Avoids common problems in metrics used for
  ranking environmental projects
  ¨ Add when they should multiply variables
  ¨ Fail to divide by project costs (e.g. subtract costs,
    or just leave it out!)
  ¨ Omit key variables (common to ignore adoption
    and technical feasibility)
  ¨ All three
· Cost of poor metrics is huge
  ¨ Benefits of investment roughly halved
  ¨ BCR can easily double environmental benefits


Interpretation and use of
      Project assessment report
·   Title, summary, etc.
·   Benefit: Cost Ratio
·   Time lag until benefits delivered
·   Risks of project failure
·   Spin-offs
·   Quality of information
·   Key knowledge gaps

·   The info is an input to decision making
·   BCR is not to be used mechanistically
·   All-things-considered judgement
·   Other things may matter
·   Need a process of QA to give the decision
    makers confidence


· For many environmental managers it’s a
  very different way to do business
· Having to provide comprehensive info
· Particular concepts new to people
· Ideally, need an asset expert with
  comprehensive knowledge

Typical problems for new people
· Difficulties with “asset” and goal
· Poor link between threat and works/actions
· Required land-use changes not quantified
· Tend to stick with comfort zones
· Unrealistic expectations of adoption
· Not adequately costed
· Insufficient detail to judge the project

  Requirements to get through
· Training
· One-to-one support
  ¨ INFFER team offers training and one-to-one
  ¨ Getting to resource limits
  ¨ Vic govt planning to provide a training/support
· Clear signals from government that there
  will be benefits to those managers who do it

Project Examples


Lachlan River

         Upper Lachlan River
· Goal – improve condition and connectivity, protect
· Threats – loss of habitat (riparian and in stream),
  sediments –nutrients, sand slugs
· Management – fencing, grazing exclusion, habitat
  restoration, sediment slug control, gully control,
· Moderate impact on threats

  Upper Lachlan River (cont’d)
· Adoption
  ¨ Little/none without incentives
  ¨ Standard CMA cost sharing ~50% adoption
  ¨ Achievable for some elements, unlikely for larger
    management changes (gully, groundcover)
· Overall cost around $3 million
· BCR 3.6 (pretty good)

Lachlan Ranges

            Lachlan Ranges
· High value, but not a ‘jewel’?
· Goal – high conservation vegetation
  ¨ Maintain extent and condition
· Threats – weeds, invasive native species, ag
  ¨ Reduce threat from high to medium
· Management – grazing management, direct
  weed/pest control, reveg

      Lachlan Ranges (cont)
· Adoption
  ¨ Little/none without incentives
  ¨ Standard CMA cost sharing anticipates >50%
  ¨ Analysis recommended
    stewardship payments
  ¨ 7 landholders
  ¨ Overall cost $1.81 million
  ¨ BCR 4.65

Patho Plains

               Patho Plains
· Very high value
  ¨ Small remnants dispersed over large area
· Goal – high conservation vegetation
  ¨ Maintain extent and condition
· Threats – weeds, over grazing, cultivation
  ¨ Reduce threat from high to medium
· Management – grazing management, direct
  weed control

         Patho Plains (cont)
· Adoption
  ¨ Little/none without incentives
  ¨ Current MBI payments ® 25-50% adoption
  ¨ 100+ landholders
  ¨ Overall cost $5 million
  ¨ BCR 1.75

· Affiliations of the INFFER team
  ¨   University of Western Australia
  ¨   Department of Primary Industries, Victoria
  ¨   North Central Catchment Management Authority
  ¨   Future Farm Industries CRC

· Other key funders
  ¨ Australian Research Council (Federation Fellow Program)
  ¨ Department of the Environment, Water, Heritage and the
    Arts (CERF Program)
  ¨ Department of Sustainability and Environment , Victoria


Shared By: