Reimbursing the future: an evaluation of motivational, voluntary, price-based, property-right, and regulatory incentives for the conservation of biodiversity
Biodiversity Series, Paper No. 9
M.D. Young, N. Gunningham, J. Elix, J. Lambert, B. Howard, P. Grabosky and E. McCrone
CSIRO Division of Wildlife and Ecology, the Australian Centre for Environmental Law, and Community Solutions
Biodiversity Unit, Department of the Environment, Sport and Territories, 1996
ISBN 0 642 24429 4
Chapter 8: Opportunities and recommendations
The purpose of this chapter is to bring together the themes and concepts found in the preceding chapters, suggest guidelines for the greater use of incentives, and identify opportunities for action. In fulfilment of the terms of reference of this project, it also makes Specific Recommendations about existing programs, policies and mechanisms in the context of the National Biodiversity Conservation Strategy.
As Australia is still losing biodiversity, it is clear that as a nation we have been under-investing in biodiversity conservation and over-investing in activities that threaten biodiversity. Without further investment in biodiversity conservation, the long-term consequences – both economic and ecological – may be disastrous. This report addresses this situation by making proposals for removing barriers and highlighting opportunities to do this in accordance with the criteria developed in Chapter 6.
8.1.2 On and off Reserve conservation
There are two fundamental components to biodiversity conservation. The first is the use of "protected areas [as] an essential means for saving biological diversity."390 The core of this component is the construction of a comprehensive, adequate and representative protected area network for Australia's marine and land-based resources. Despite expansion of the protected area network in the past decade, Australia's existing system of National Parks, marine protected areas and other reserves does not adequately protect a representative sample of our rich diversity of ecosystems.
The second component is the protection of biodiversity 'off-reserve'. The threats to biodiversity extend across tenure and administrative boundaries. With more than two-thirds of Australia managed by private landholders, the conservation of biodiversity "requires integrated and consistent approaches across freehold and leasehold and other Crown lands."391 Urban development is also responsible for the generation of two of the biodiversity's greatest threats – climate change and pollution. Accordingly, strategies for protecting biodiversity 'off reserve' are fundamentally important. Unfortunately, existing strategies have proved insufficient to meet Australia's biodiversity conservation objectives.
This report concentrates on biodiversity protection 'off reserve' together with consideration of the implications of using attributes of biodiversity. Our principal concern has been to develop of a set of incentive arrangements that will reduce threats and where possible, encourage ecologically sustainable forms of resource use.
8.1.3 This report
Two types of recommendations, or opportunities for action, are put forward in this report. General Recommendations canvass the broad direction to be undertaken in addressing biodiversity protection. Specific Recommendations focus on more detailed proposals for action, many of which are capable of immediate implementation.
This chapter provides a summary of the key concepts emerging from the preceding chapters. It then proposes goals and guidelines for 'off-reserve' conservation embodying the principles that emerge from the consultations, case studies and literature review. In particular, this chapter looks at three core areas: building institutional capacity, expanding the range of incentive instruments, and financing biodiversity conservation. The chapter concludes with a vision for Australia's approach to biodiversity protection.
While this report focuses on the use of incentives in an 'off-reserve' context, their effectiveness is crucially dependent on the implementation of comprehensive strategies for biodiversity protection within reserves as well as outside them. The following recommendations, while not a direct result of this report, provide the overall framework within which succeeding recommendations will effectively operate.
General recommendation 1
That consistent with agreed government policy, Commonwealth and State Governments develop and implement a plan of action to expand the terrestrial and marine protected areas network so that it is comprehensive, adequate and representative of Australia's biodiversity.
As set out in the Prime Minister's Statement on the Environment in December 1992 and the NBCS, the target date set by governments for completion of this network is the year 2000.
Specific recommendation 1.1
That the target of completing the protected area network by the year 2000 be maintained and that funds be set aside to complete this task.
Recognising that some parts of the existing protected area network are not managed adequately, many participants stressed the need to set aside sufficient funds to manage the existing network and its proposed expansion.
Specific recommendation 1.2
That funds be set aside to manage the existing protected area network and that the budget for its expansion include an allocation for adequate management.
General recommendation 2
That Commonwealth, State and local governments develop an integrated package for the conservation of biodiversity "off-reserves" that makes use of incentive instruments and mechanisms and contains implementation timelines that support and stimulate community-based initiatives.
General recommendation 3
That in the formulation of Commonwealth, State, regional and local development programs, protection of biodiversity is recognised explicitly as a goal which is as important as economic development.
8.3.1 In Chapter 1
Australia is the only developed nation in the world that is classified as 'megadiverse' because of the number of unique and diverse species and ecosystems it contains. Chapter 1 introduces Australia's biodiversity, which is the variety of all life forms – the different plants, animals and micro-organisms, the genes they contain, and the ecosystems of which they form a part. Biodiversity conservation provides the basis for economic opportunity; both direct, through the growth of industries like nature-based tourism, and indirect, by maintaining the life support systems on which we depend. Apart from the obvious benefits for national productivity and the long-term security of the ecosystems that support us, there are also aesthetic and ethical arguments in favour of preserving biodiversity. In the end, biodiversity conservation is essential to the maintenance of life on earth and is vital for an ecologically sustainable society.
But despite this recognition, the alteration of ecosystems, species loss and declines in genetic diversity continue at rates far greater than that which occur naturally. More than half of all the major biogeographic regions in Australia are not represented or are poorly represented in national parks or nature reserves. The problem is not merely historical – half of all animal extinctions in Australia have occurred this century. Six animal species have become extinct in the last 50 years. More than 5 million hectares of native vegetation were cleared in the decade between 1983 and 1993.
The International Convention on Biological Diversity, the National Biodiversity Conservation Strategy, the National Strategy for Ecologically Sustainable Development and the Intergovernmental Agreement on the Environment commit us to take action to halt the erosion of biodiversity values. Any attempt to comprehensively protect Australia's biological resources must look at integrating management of the relatively small percentage of conservation areas directly under the control of government with conservation measures applied across the landscape.
This move to include off-reserve areas in biodiversity conservation has philosophical as well as practical underpinnings. As a large proportion of biological resources are found only on privately-owned land and in unprotected marine areas, new ways must be found to conserve it. Biodiversity conservation is a precondition for the ecologically sustainable use of natural resources and the environment. Biodiversity conservation requires attention to the role that community and industry takes in conserving biodiversity, the development of a mix of policy instruments and programs that will facilitate biodiversity conservation, removal of barriers to conservation, and mechanisms to meet the cost of conserving biodiversity.
8.3.2 In Chapter 2
Current biodiversity problems are often a consequence of decisions made by people other than land managers. Those who manage and use Australia's natural resources seek recognition that the whole community must take responsibility for the causes, processes and outcomes of biodiversity loss. The factors that may ultimately threaten biodiversity values are termed fundamental causes, underlying causes, and threatening processes.
At the international level, research by the OECD suggests that fundamental causes of declines in biodiversity values include: population pressure; a strong desire for economic development; economic and social inequality; and the short-term livelihood requirements held by those most disadvantaged in any nation. Conflict between short-term orientation of the world's economy and the long-term need to achieve ecologically sustainable forms of development is another fundamental cause of decline.
Underlying causes of biodiversity loss arise from: lack of knowledge about the function of biodiversity; the failure of markets to value all biodiversity considerations; incomplete specification of property rights; poor institutional arrangements; failure to distribute information; perverse (unintended) policy effects; economic pressures placed upon those who derive income directly from our marine and land based resources; the scarcity of resources allocated to biodiversity conservation; and a general lack of awareness of the value of biodiversity. Often the gap between market and social values is not known.
Threatening processes identified in the National Biodiversity Conservation Strategy as most likely to lead to declines in biodiversity values are: clearance of native vegetation and other forms of habitat modification; failure to control pollution; altered fire regimes; climate change; and introduction of alien and genetically-modified organisms. Associated with these threats are the inability to rehabilitate degraded landscapes, and failure to assess environmental impacts adequately. Loss or decline in ecosystems, direct loss of species and loss of genetic diversity must all be addressed.
This chapter identifies the instruments and mechanisms that are being used to address Australia's biodiversity problems. In recent years, all levels of government have begun to give greater attention to the conservation of biodiversity in landscapes used for purposes such as agriculture, forestry and urban development. The array of mechanisms used involves many institutional, motivational, voluntary, property rights-based, pricing and regulatory instruments. Much overseas experience parallels that in Australia. Opportunities which could be pursued further but not taken up in Australia include: the greater use of non-government organisations for the delivery of programs and policies; the reimbursement of the costs incurred by those who contribute positively to the conservation of biodiversity; innovative taxation arrangements; and the use of property-right mechanisms as a means to reduce threats to biodiversity.
8.3.3 In Chapter 3
While government decision makers set policy frameworks, it is in local communities and on individual properties that actions will take place to protect biodiversity off reserves. Chapter 3 provides a 'snapshot' of views from rural and metropolitan communities, reflecting many of the factors most important in providing incentives to ensure the conservation and ecologically sustainable use of Australia's biodiversity.
The enhancement of community understanding and appreciation of biodiversity, the need for recognition of the role that local communities and industries play in biodiversity conservation and the need to increase funding available for biodiversity conservation were among the key factors identified in the 13 consultation forums held around the country.
Voluntary and motivation incentives were favoured to combat most biodiversity threats, although participants recognised that regulatory incentives were important in providing a framework for action, and for controlling the recalcitrant few.
In general, market-based incentives were supported, as long as they were easy to access, and provide a real financial advantage to those who use or might threaten biodiversity. There were mixed views on the use of property-right mechanisms as a mechanism to bring about change. Opinions varied on whether or not transferable emission rights to control pollution and tradeable quotas are effective as a means to keep use within the limits necessary to protect biodiversity.
That ecotourism should become an 'ethic' among all parts of the tourism industry and should guide that industry in its interaction with the natural environment was a widely held view.
While local involvement in planning, decision making and implementation of biodiversity conservation was seen to be critical to successful outcomes, it was recognised that communities cannot act alone. Generally people are of the view that information and resourcing, as well as leadership and the development of national strategies for action, must come from government, with each level of government having a different role to play.
The consultation forums supported the establishment of partnerships involving those directly responsible for land use and management, together with governments, scientists and others in the community. Precisely how those partnerships might best be developed and how they might bring together Aboriginal and non-Aboriginal perspectives of land stewardship was not clearly articulated.
8.3.4 In Chapter 4
The case studies summarised in Chapter 4 and presented in Appendix 2 demonstrate that there is a wide range of opportunities to protect biodiversity which have yet to be fully explored. The case studies present 144 policy opportunities to assist in conserving biodiversity values, and emphasise that specific mixes of instruments will be required to address specific sets of threats. They indicate an untapped potential of community goodwill and ideas that are practical and applicable at a grass roots level.
A lack of information is frequently mentioned as a barrier to the understanding of threats and the appreciation of biodiversity values. In most of the case studies, however, the threat to biodiversity values and the necessary actions to address those threats are sufficiently well understood, at least by experts, to clearly demonstrate that a precautionary approach to development should be taken. It is the distribution of information, rather than the lack of it, that is a barrier to more individual and community action. For the most part, it appears that deficiencies in institutional and social organisation present a very pervasive barrier to the conservation of biodiversity.
There are considerable opportunities for greater community and industry contributions to the protection of biodiversity. These involve superimposing non-interventionist and financially-attractive incentives on a set of precautionary standards. The complexity of threats to biodiversity values and the range of objectives for its use and protection, mean that no one policy approach is going to offer a general solution. To be effective, each element in the policy mix needs to be targeted to a separate threat. For administrative efficiency, the mix needs to 'nest' different considerations within each other and empower the constellation of institutional structures accountable for the protection of biodiversity to act in concert with each other. State-wide species conservation requirements, for example, might be achieved in a more cost-effective manner if targeted so as to simultaneously protect species and reduce local dryland salinity problems. Property-right mechanisms – like the fishery-share system being introduced in NSW, the allocation of water to the environment, and tradeable development rights – emerge as a potential means of encouraging communities to define the targets necessary to protect biodiversity whilst encouraging industry to find the most efficient, effective and innovative ways to deliver these targets. Consultations indicate that property-right mechanisms will, however, only be effective when there is adequate information, and when the community and government are willing to set targets which are capable of providing real protection to biodiversity. In all cases, these mechanisms need to be supported by other instruments. There is no single solution.
The emergence of an ecotourism industry presents a chance to learn from the mistakes of older industries and use incentive instruments and mechanisms to prevent this industry from becoming its own worst enemy.
8.3.5 In Chapter 5
This chapter addresses the core issue of how to build an institutional framework conducive to the conservation and ensure its use is ecologically sustainable – building institutional capacity. In doing this it is necessary to include all sectors who have an interest in the conservation of biodiversity, which requires the developing of co-operative and co-management structures involving community, industry and government. Each of these sectors has a vital role to play if institutional frameworks are going to be all encompassing and ultimately effective.
While the findings of this report do suggest that community involvement in conservation should be encouraged as much as possible, it is also recognised that there are necessary tasks which can only be carried out by government. These include:
- setting the agenda of broad policy objectives to be achieved;
- protecting broader public interests in ensuring, for example, that the many small decisions made at the local level do not result in an ecosystem type becoming threatened or endangered;
- providing resources and distributing funds;
- building a safety net which can take over when local processes fail to conserve biodiversity;
- coordinating policy, in particular inter-regional, state and national plans and strategies on biodiversity (which have had community input during development);
- ensuring biodiversity input into other government programs eg salinity, timber, mining, telecommunications;
- resourcing biodiversity research where that information is unlikely to be provided through the market;
- regulation, changes to property rights and price signals (with community input into design);
- monitoring and accountability (keeping in mind the vital role community groups can have in this area); and
- establishing necessary institutional arrangements which will ensure meaningful community participation.
At the same time, community and industry also have unique and invaluable roles to play in biodiversity conservation. Community-initiated biodiversity protection harnesses local knowledge, which can be provided at minimal cost and can sometimes be invaluable. Community involvement also creates ownership and pride in the solution to a problem. Greater efficiency in resource use can be achieved because more detail can be considered as solutions are developed. Generally, rules made by the parties affected directly will be based on more information than rules imposed from outside. Because these rules are developed against a richer information base they are likely to result in more efficient outcomes. The probability of compliance with those rules is also much higher, since people are more willing to acquiesce in solutions they have helped devise. Finally, the considerable leverage that community based-initiatives provide compares very favourably with central government directives in cost-benefit terms. Community-based initiatives often involve considerable contribution in the form of voluntary labour and privately financed investment while at the same time developing land-user awareness and motivation.
Issues addressed include means by which processes which integrate community, industry and government sectors can attain legitimacy; whether the framework should use and adapt existing structures or, alternatively, build new ones (of these two approaches, we conclude the former are likely to be most effective); whether these new or existing bodies are to have an advisory or decision-making role, and how such bodies are to be made accountable, both to the public and to other levels of the decision making structure. The chapter identifies opportunities to give local government a stronger role but acknowledges that, in some circumstances particularly those involving land use decisions, the possibility of corruption and capture by vested interests needs to be dealt with. The principles that emerge in building institutional capacity are that:
- community-initiated and industry-initiated responses to declines in biodiversity value are likely to be more effective than government-initiated ones;
- there is a role for the Commonwealth Government and State Governments in building the institutional structures that empower local communities, providing access to the instruments necessary for their operation and in fixing problems when local initiatives fail;
- community planning and implementation processes will only be effective if they have legitimacy. In this respect, representation of stakeholder groups, direct community involvement, transparency and accountability will be crucial;
- community-based decision-making is likely to be most effective if it begins at regional level;
- in implementing policies at the regional level it would be efficient, where practicable, to build on existing decision-making structures rather than create new ones;
- a community-oriented approach cannot succeed, nor can it gain legitimacy, unless it is fully resourced;
- communities and industries must be given incentives to initiate their own biodiversity conservation programs;
- other incentive-based mechanisms, must, of necessity, be administered by the Commonwealth Government and State Governments; and
- when designing institutional structures and processes, the motivational and information efficiency benefits of subsidiarity - the transfer of authority and responsibility for biodiversity to the lowest level that it can be exercised – should be recognised.
8.3.6 In Chapter 6
The impact of the various instruments and mechanisms can be measured against a wide range of criteria. Guidelines and the recommendations presented in this chapter have been evaluated against:
- Dependability or certainty – the instrument mix will deliver the desired biodiversity target, even when knowledge about likely responses is uncertain;
- Precaution – the instrument avoids the possibility of serious or irreversible consequences especially when there is lack of full scientific uncertainty about possible adverse outcomes;
- Economic efficiency – having regard to implied and actual values, the chosen trade-off between production and conservation is achieved at least cost (productive efficiency) and no reassignment of property rights would improve production or biodiversity objectives without making some-one worse off (allocative efficiency);
- Dynamic and continuing incentive – the mechanisms used continue to encourage technical innovation, improvement of biodiversity beyond the official policy target; and automatically adapt to changing technology, prices and climatic conditions;
- Equity – no group of people, including future generations, is unfairly disadvantaged or favoured by the policy mix;
- Administrative feasibility and cost – monitoring and information costs are minimal (low information cost); government enforcement is cost effective, can be financed from available revenue and self enforcement is encouraged (low administrative cost); the instrument's requirements are simply explained (Communicative simplicity) and the decision-making processes associated with the instrument can be understood by all parties (transparency); and
- Community and political acceptability – the policy mix motivates the community to ensure that biodiversity conservation objectives are achieved; is perceived as being legitimately formulated and delivered; adds to social harmony; is consistent with government commitments; and attracts bipartisan support.
The instruments examined are classified under five major headings: motivational, educational and information instruments; voluntary instruments; property-right instruments; price mechanisms and regulation. The virtues and failings of each of these mechanisms are examined, together with the role of each in contributing to biodiversity conservation and examples of each are provided. The impacts of perverse incentives and the place of cross-compliance in biodiversity conservation are also examined. General principles for their use are developed.
This chapter also looks at the significant role that pricing mechanisms might play in revealing the cost of preventing and controlling adverse impacts on biodiversity values, as well as raising the revenue required for biodiversity conservation in an equitable manner. However, it goes on to note that to date this potential has rarely been realised. Thus market-based approaches may be less appropriate than regulation where the threatened loss of biodiversity is irreversible or where ecosystems are nearing the limits of their ability to respond to stress.
8.3.7 In Chapter 7
This chapter points out a number of compelling reasons for developing policy mixes rather than 'single instrument' approaches, and argues that what is needed is not simply the introduction of a broader range of policy tools, but the matching of tools with the particular set of environmental and resource management problems at issue, with the party or parties best capable of implementing them, and with each other. The crucial question thus becomes: how, in what circumstances, and in what combinations, can the main classes of policy instruments and institutional arrangements achieve an optimal policy mix at each location where biodiversity needs to be conserved?
In addition to the seven evaluation criteria identified in Chapter 6, four guidelines are paramount in designing policy mixes that promote the active conservation of biodiversity and its ecologically sustainable use. These are that (all things being equal):
- as far as possible, policy changes should seek to reduce underlying causes of threats to biodiversity such as institutional failure, market failure or incompletely specified property-right structures, as well as the direct threatening processes;
- preference should be given to mixes that motivate communities and industry to conserve biodiversity;
- less interventionist instruments should be preferred to more interventionist instruments; and
- where ongoing and active contributions to the conservation of biodiversity are desired, financially-attractive instrument mixes should be preferred to ones that reduce the net welfare of those asked to conserve biodiversity.
This chapter then goes on to discuss the ways in which the instruments outlined in Chapter 6 can be combined to achieve optimal results. It is argued that motivational instruments and mechanisms are so fundamental to a successful incentives-based biodiversity conservation package that they should be invoked in almost all circumstances, and incorporated in almost all policy mixes. Issues of reimbursement, compensation and cost internalisation are discussed. The most effective mix of instruments at any location will involve the interaction of a set of mechanisms implemented by different organisations and individuals. Another important finding is that, for dependability, it is necessary for multiple strategies to be pursued. It should never be assumed that any single instrument will work in all circumstances.
Unfortunately the budget for biodiversity conservation is not infinite, with the consequence that attention to the cost of alternative policy mixes is critical. The issue is complicated by the fact that some, but not all, of the benefits from biodiversity conservation are public in nature and involve non-market as well as market considerations. Notions of equity and efficiency suggest that, wherever possible, beneficiaries and users should pay for the cost of providing benefits and services to them and preventing threats associated with their actions When the benefits are of a widespread public nature, however, a proportion of costs should be met from public sources.
The cost of implementing these guidelines will be less if underlying causes of declines in biodiversity value are removed. The chapter draws attention to the OECD's Polluter-Pays Principle, suggests that wherever possible the cost of controlling threats should be made part of normal production costs but that those who are asked to work to provide non-marketable benefits to society should have those costs reimbursed. The notion of using compensating mechanisms as circuit breakers that change community norms while maintaining motivation is introduced. Whilst the above framework provides some useful guidelines, it is difficult to find an objective baseline from which to choose when to reimburse the cost of providing non-marketable benefits to society, when to pay compensation and when to make those who use attributes of biodiversity pay for the full costs associated with protecting biodiversity. The chapter proposes that payments for the production of biodiversity services should be limited to those that can not be brought within market processes or tied to an existing property-right. Adequately funded educational, informational and motivational incentives, combined with economic instruments, can do much for the conservation of biodiversity, but to increase dependability, these must be underpinned by a safety net of regulation
The National Biodiversity Conservation Strategy provides guidance for local, State and Commonwealth government approaches toward biodiversity conservation over the next decade. The Intergovernmental Agreement on the Environment, to which all Australian governments have agreed, is precautionary in its approach to development that threatens biodiversity. The parties to that agreement acknowledge that biodiversity is a major and valuable component of the environment and while recognising that information on biodiversity is incomplete, accept that actions need to be taken to protect it. This project's terms of reference require identification of a set of broad objectives for:
- integrated planning for the conservation of biodiversity and ecologically sustainable use of its components at different spatial scales (especially the bioregional scale);
- conservation and protection of biodiversity;
- ecologically sustainable management of bio-resources and biodiversity components; and
- the management and control of threatening processes.
8.4.1 National goals
In developing National goals and guidelines, the project team has focused on the use of incentives to protect biodiversity and encourage its use in ways which are sustainable, while ensuring that these goals are consistent with the National Biodiversity Conservation Strategy, the Intergovernmental Agreement on the Environment and other relevant initiatives. It is suggested that:
- biodiversity conservation is a necessary precondition for ecologically sustainable development and the implementation of the precautionary principle;
- responsibility for maintaining biodiversity is shared between government, community and industry in a transparent manner;
- appropriate incentives are put in place to encourage the protection of biodiversity and to encourage its use only in ways which are ecologically sustainable;
- appropriate mixes of incentives are developed and appropriate weightings given to motivational, voluntary, property-right, price-based, and regulatory instruments in ways which vary according to the biodiversity threat and bioregional and social characteristics;
- the institutional capacity at all levels of government and within the non-government sector is capable of supporting a national approach to biodiversity protection through the use of incentives; and
- the Australian community as a whole – as well as users and beneficiaries of biodiversity - contribute towards the provision of incentives to land managers charged with primary responsibility for biodiversity protection.
8.4.2 National guidelines
The following guidelines have been developed to assist decision making about appropriate incentive mixes, and improving institutional capacity:
When considering trade-offs
- as information about biodiversity is uncertain and adverse consequences may be irreversible, the emphasis in choosing between efficiency, equity and ecological considerations should be on ensuring that maintenance of biodiversity values is the priority;
With regard to institutional considerations
- biodiversity conservation should be fully integrated into regional plans and sectoral plans such as those for forestry, agriculture, coastal zones and rural development;
- rather than expecting accountability to result simply from reporting mechanisms and processes, accountability structures should also be built into the funding mechanisms available at all levels of government;
- authority and accountability for implementing the various aspects of biodiversity conservation strategy should be given to the lowest level of government at which it can be effectively exercised (the subsidiarity principle);
With regard to the instrument mix
- fundamental to any policy mix to address threats to biodiversity are motivational incentives which work to involve communities and industries in biodiversity protection and ecologically sustainable use, at planning; decision making and implementation levels;
- precautionary standards, enforced by regulation, are a necessary underpinning of any incentive mix;
- each level of government should set precautionary standards for biodiversity protection, and no level of government should be empowered to undermine any standard set by another level of government, a community or an industry;
- since no single instrument or type of instrument has high dependability, more than one instrument and instrument type will usually be necessary;
With regard to financial considerations
- the Australian community as a whole should take financial responsibility for protecting biodiversity when the costs of doing so cannot be recovered by the use of market mechanisms applying to biodiversity users or those threatening biodiversity;
- the cost of controlling and preventing threatening processes should be borne primarily by those who cause these processes (the User-Pays Principle underpinned by the Polluter-Pays Principle);
- all those who benefit from non-market dimensions of biodiversity conservation, either directly and indirectly, should contribute to the cost of its maintenance (Non-Market Beneficiaries Pay Principle);
- in using the attributes of biodiversity, provision must be made for ongoing management to control the threats that will arise from that use;
- landholders who draw attention to the presence of an endangered species or other attribute of biodiversity not previously identified on their land should be eligible for compensation for commercial opportunities foregone;
- as most property ownership embodies a speculative dimension, compensation for the loss of a private land development option should be used only as a transitional measure when absolutely necessary to obtain community acceptance of a change in property rights; and
- when compensation is paid it should be associated with a clear change in property rights guaranteeing the protection of biodiversity values in perpetuity via a conservation covenant or other similar mechanism.
This report presents strong arguments for increasing community, non-government and industry involvement in actions aimed at biodiversity protection. It is clear from the consultation process that community involvement in both decision making and implementation of biodiversity protection programs is crucial to their success. There is also strong evidence that community-initiated and industry-initiated and/or implemented programs are likely to be more cost effective than those enacted primarily by centralised government authorities.
General recommendation 4
That governments devolve greater responsibility for biodiversity protection to local communities and industries.392
8.5.1 The role of government
In consultation with industry and community, Governments have a central role to play in both setting and implementing policies and programs which will bring about biodiversity protection. However, policies and programs which support and encourage co-operative partnerships and joint decision making with local Government, non-Government Organisations, community groups and industry are also considered to make an essential contribution.
State and Commonwealth governments have important roles in setting broad objectives, coordinating policy, providing resources, distributing funds, managing interregional issues and ensuring that the precautionary principle is applied to decisions which may prove to have irreversible outcomes for biodiversity.
One of the key roles for the Commonwealth Government is to build the national processes necessary to support State, community and industry commitment to biodiversity conservation. It also has a role, through its taxation responsibilities, in financing the truly national and broad public interest aspects of biodiversity conservation. In addition, the Commonwealth government has a responsibility to ensure that Australia's international agreements are honoured. It is the role of State and Commonwealth governments to:
- build administrative structures that empower local communities and industries to protect biodiversity;
- provide access to instruments necessary for local government, non-government organisations, community and industry to protect biodiversity in a cost-effective and equitable manner;
- address problems where local or industry initiatives fail or are incomplete; and
- give consistent signals about the importance of conserving biodiversity to resource users and consumers;
- enforce regulations and provide legal redress and adjudication in cases of dispute.
8.5.2 A focus on underlying causes – utilise existing structures
Most of the underlying causes of biodiversity loss arise from decisions made by existing bodies. Consequently, it is institutionally and financially efficient to recommend that existing structures be used and where necessary, adapted to implement off-reserve conservation policies. In some circumstances, considerable adaptation of existing structures may be necessary to ensure that biodiversity objectives are effectively rather than tokenistically adopted by existing bodies. Nevertheless, we perceive that this approach will be more efficient than any new arrangement that seeks to offset the adverse effects of other policies on biodiversity.
General recommendation 5
That governments at all levels use and adapt existing administrative structures to include explicit consideration of the protection of biodiversity.393
8.5.3 Improved co-ordination and interaction
The report's case studies and community consultations reflect a need for greater coordination between levels of government and between government departments. Coordination is necessary to reflect the nature of biodiversity values, which are not constrained by government boundaries. There is also a need for coordination between biodiversity protection programs and programs focusing on the ecologically sustainable use of natural resources. For any form of resource use to be ecologically sustainable, a biodiversity protection component must be included.
Governments themselves need to develop better processes of interdepartmental communication in order that their involvement in decision making is as effective as possible. Biodiversity conservation must be integrated into every day decision-making at all levels of government, in the community and in industry. Existing programs need to incorporate biodiversity considerations, especially where such programs are directed towards community involvement. In particular, the objectives of programs – such as the Department of Housing and Regional Development's Regional Development Program and ATSIC's Regional Planning Framework and the review of the Department of Primary Industry and Energy's Landcare program – should each place more explicit emphasis on the conservation of biodiversity. It is within programs such as these that the greatest opportunities exist for the conservation of biodiversity through the co-operative efforts of governments, local communities and industry. In addition, new programs and policies need to consider their implications for biodiversity protection at the earliest stages and at the highest levels of decision-making.
General recommendation 6
That Commonwealth, State and local governments review existing and proposed community-based and regional development programs to ensure that, consistent with the principles of ESD, each makes explicit the need to maintain biodiversity values.394
Since biodiversity conservation is a necessary precondition for ESD, this consideration must become part of the normal policy review process.
Specific recommendation 6.1
That, as biodiversity conservation is one of the 3 core objectives agreed for ecologically sustainable development, the Commonwealth government require explicit consideration of biodiversity implications in all Commonwealth Cabinet proposal papers and that it encourage States to adopt the same practice.
Multi-disciplinary approaches to biodiversity problem solving should be encouraged. For example, better integration of extension messages delivered by state agriculture and conservation agency advisers may assist in promoting the benefits of remnant vegetation and the conservation of other aspects of biodiversity. Training for existing agricultural, farm management, and soil conservation extension officers in remnant native vegetation and other biodiversity management requirements and the values of remnants may help a shift in attitude away from a production orientated point of reference. These staff would then be better prepared to integrate biodiversity conservation principles into sustainable agriculture extension messages. Staff transfers between government agencies may improve the communication and understanding between professionals working in related but different disciplines. Encouragement of multi-disciplinary approaches to address a problem which requires an integration of sustainable agriculture and biodiversity conservation could be facilitated with staff secondments or transfers.
Specific recommendation 6.2
That governments at all levels encourage staff transfers between government agencies to improve communication and understanding between professionals working in related but different disciplines, and to encourage multi-disciplinary approaches to biodiversity problem solving.
8.5.4 Involving all stakeholders
Inclusion of stakeholders in decisions about biodiversity can effectively occur through appointment of their representatives to decision making and advisory bodies. As illustrated in the NSW fishery case study, the most effective are strong co-management structures which require the different interest groups to make decisions jointly and accept responsibility for their implementation. This approach is suitable for the involvement of groups as diverse as pastoral land managers, water management authorities and fishery management agencies with community groups and government bodies. It also allows the participation of small and large landowners and managers, and various community and conservation groups with an interest in biodiversity.
General recommendation 7
That government agencies at all levels develop biodiversity conservation programs which involve members of the community and industry in initiating, designing and implementing projects.395
Specific recommendation 7.1
That governments at all levels make far greater use of co-management structures as a means to make decisions about resource use.
If community and industry groups who have a close association with biodiversity have greater involvement in decision making, these groups should ensure that their own internal processes of decision making allow real opportunities for involvement of those at the 'grass roots' level. One way of doing this is to develop protocols that commit groups to work with people at each level of administration to achieve agreed biodiversity objectives. Significant opportunities exist to do this in the agriculture, fishing, forestry, road construction and maintenance, and nature-based and eco-tourism industries.
Specific recommendation 7.2
That in anticipation of greater devolution of responsibility to industry, peak resource industry bodies develop protocols and structures which encourage members at all levels in their structure to interact with both communities and other industries affected by biodiversity considerations.
Specific recommendation 7.3
That through the Council of Australian Governments, the Australian Local Government Association and the Municipal Conservation Association, Regional Organisations of Councils (ROCs) be encouraged to include the conservation of regional biodiversity among their priority objectives.
8.5.5 Increasing participation
A major barrier to voluntary involvement in planning and management for biodiversity conservation is the costs involved to those participating. Travel expenses, phone and other communication charges act as a disincentive to taking action.
Specific recommendation 7.4
That governments at all levels reimburse community representatives for the costs of formal participation in consultation processes associated with biodiversity protection.
A bioregional focus
Not only is co-management by government, industry and the community necessary for the conservation of biodiversity, but so too is increased collaboration between levels of government and between governments having responsibility for management of natural resources which cross existing boundaries.
There is growing agreement that the focal point for formulation of most appropriate 'unit' for biodiversity policies and co-ordination of decision-making protection and management is a 'bio-region':
an area ... large enough to maintain the integrity of its biological communities, habitats and ecosystems, ... having cultural identity and a sense of home to its local residents; ... a mosaic of land or aquatic uses; [and having] ... components that are dynamic and interactive.396
For this bioregional focus to be successful, however, the institutional structure must recognise that biodiversity transcends fixed boundaries – birds fly between continents; fish swim across oceans, and ecosystem processes interact with one another. This means that international, national and state-wide considerations need to be accommodated.
General recommendation 8
That both within its own programs and in collaboration with State and local governments, the Commonwealth Government encourage the delineation of bioregional boundaries appropriate to the various aspects of planning within each region.397
Specific recommendation 8.1
That bioregions be used as the basis on which to develop the information necessary to ensure that ecosystem biodiversity is protected.
Specific recommendation 8.2
That bioregions be used as the basis on which to develop the information necessary to ensure that ecosystem biodiversity is protected.
8.5.6 Expand the role of local government
This report emphasises the role that local government can play in biodiversity protection and establishes a guideline that organisations should be made financially accountable for biodiversity conservation. Local government boundaries, while rarely consistent with bio-regional boundaries, provide an important base on which stronger biodiversity protection programs can be established. Local government also has a close, identifiable tie with the community. Properly structured and with checks to avoid corruption and dominance by vested interests, local government can make greater use of information and have the potential to achieve the same outcome as more central levels of government, but in a more flexible, equitable and efficient manner.
General recommendation 9
That much greater emphasis be given to the role of local government in conserving biodiversity, and this be achieved by making them more accountable for the effects of their decisions on biodiversity.398
Giving a greater role to local government means that the Commonwealth Government and State Governments must become much more explicit about the nature of state-wide, national and international biodiversity objectives and obligations. This will require them to develop mechanisms that set limits to the powers of local government. The most effective mechanism available is one whereby the Commonwealth and States set targets for the conservation of biodiversity and indicate in what areas and in what circumstances they must be consulted.
Specific recommendation 9.1
That the Commonwealth and State governments specify which areas require special management arrangements and set formal targets for the conservation of biodiversity at the local level.
One financial mechanism likely to bring about change on the ground is a change to the 'formula' used in allocating resources to local governments. At present, there is no means for reimbursing local governments for the costs of protecting biodiversity. The State Local Government Grants Commission process, in fact, gives a perverse (unintended) signal to local governments that they should give preference to economic development rather than the conservation of biodiversity. If biodiversity were included as a consideration in the 'formula' used by the Grants Commission, local governments would be provided with a financially-attractive incentive to encourage and support the protection of biodiversity.
Specific recommendation 9.2
That the formulas used to allocate money to local government be reviewed with a view to reimbursing them for some of the costs of conserving biodiversity in their area. The revised formula should take into account:
- area within the national park system;
- area under a conservation covenant or easement;
- area of roads that contain relatively undisturbed native vegetation and adjoin a conservation covenant or easement on private land; and
- the number of threatened, rare or endangered species in the area and outside the national park system that are being protected under a council endorsed and state approved management plan.
Specific recommendation 9.3
That local governments be asked to provide annual biodiversity audits which demonstrate their progress towards protection of biodiversity, and that the data generated be used in the development of the Commonwealth Government Grants Commission funding 'formula'.
8.5.7 Use of non-government organisations
Experience in other parts of the world indicates that, in certain circumstances, non-government organisations have the capacity to conserve biodiversity in ways not available to government. Australian research shows that because non-government organisations can harness altruistic behaviour, investment in mechanisms that enhance the capacity of non-government organisations can have large multiplier effects.
General recommendation 10
That non-government organisations be adequately resourced to enable their greater use as a cost effective means to implement biodiversity conservation programs.399
As the National Biodiversity Conservation Strategy recognises, local communities, those having primary responsibility for the day-to-day protection and management of biodiversity and those in community groups with an ongoing interest in biodiversity conservation, all have a legitimate place in conserving biodiversity. However, as many in the community consultations highlighted, these people are often poorly resourced, and ill-equipped to participate in government processes.
Specific recommendation 10.1
That government agencies, both State and Commonwealth, ensure that adequate resourcing is provided by way of research support, travel costs, sitting fees and other cost reimbursement, to enable community participation in all aspects of policy development and implementation for the conservation of biodiversity.
As illustrated in consultations with the Aboriginal community at Charleville (Chapter 3) and in Case Study work described in Chapter 4 and Appendix 2.7, Aboriginal perspectives on land management and nature have much to contribute in the conservation of biodiversity. Both individuals and communities can contribute to biodiversity conservation objectives.
Specific recommendation 10.2
That funding bodies support Aboriginal people who are carrying out biodiversity conservation initiatives, by removing the disincentive of funding only communities but not individuals.
Specific recommendation 10.3
That ATSIC funding for land management and tourism plans be provided on a 3-5 year basis (rather than annually) and that ecological sustainability criteria be included in those plans.
Specific recommendation 10.4
That Aboriginal tourism programs funded by ATSIC, DEET and the Department of Tourism be linked with other regional programs in which biodiversity conservation forms a basis, such as the innovative 'Land and Learning' and Galtha Rom multimedia projects used to teach school children in east Arnhem Land.
This report identifies a wide range of policy instruments and mechanisms that should be available for use by all organisations. Each organisation makes a different contribution so that in concert with one another, the composite outcome is more likely to be one that conserves biodiversity. While recognising the guideline that they can not work to undermine one another, each needs the capacity to act to conserve and protect the attributes of biodiversity for which it is accountable. It requires that a wide range of instruments be available to all levels of government. For biodiversity to be protected effectively, the policy mix in any circumstance will need to accommodate a vast array of ecological, political, institutional social and economic factors. Moreover, as considerations of scale dominate biodiversity, it will rarely be possible for one agency to have total responsibility for biodiversity conservation. Instead, each will have to add their set of incentives which, in aggregate and in concert with all the others, act to conserve biodiversity in a dependable manner.
Policy design and assessment are complex tasks. As indicated in Chapter 6, the core criteria for instrument choice are dependability or certainty in achieving biodiversity targets; precaution in the face of uncertainty; economic efficiency; equity; administrative feasibility and cost; and community and political acceptability. However, in practice there are frequently conflicts between these objectives, with the result that trade-offs are inevitable.
Incentives for consideration in the packages fall generally into five categories (see Chapter 6): motivational, voluntary, property-right based, regulatory and price based.
8.6.1 Motivational incentives
Incentives aimed at increasing levels of knowledge and understanding are based on the presumption that environmentally responsible behaviour is far more likely to result when people have a basic knowledge of the issues at stake. Low administrative cost is a key attraction of these motivational incentives. They have a role in generating knowledge, creating awareness, and lowering the cost of implementing other parts of the policy mix. As motivational measures do not involve coercion, they are generally equitable. One of the most powerful motivational incentives, already discussed, is the involvement of industry and community in decision making and policy implementation.
Lack of knowledge about the role of biodiversity in sustaining ecosystems and enabling their use is a fundamental cause of biodiversity loss. As summarised in Chapters 1 and 2 and illustrated in all our case studies, we often do not fully understand ecological processes. Moreover, even in cases where species are known, the function of genetic and ecosystem diversity is rarely understood with confidence. With better information, more efficient, more equitable and safer decisions can be made. The need for precaution is thus reduced.
General recommendation 11
That where information is lacking, instruments which increase the extent and relevance of research be used as one of the main mechanisms to enhance dependable, efficient and equitable biodiversity conservation.400
Within Australia, research and development corporations are used to fund research on natural resource use. These organisations are funded jointly by industry and government on a dollar for dollar basis. At present, most research focuses on efficient ways to increase production from a sustained-yield perspective. With the exception of a joint program between the Land and Water Resources Research and Development Corporation (LWRRDC) and the Australian Nature Conservation Agency, corporation-sponsored research on biodiversity conservation is limited. The institutional structure is such that biodiversity research is not seen as part of the core business of any corporation.
Specific recommendation 11.1
That the terms of reference of the Land and Water Resources Research and Development Corporation and other relevant R&D Corporations be expanded to include biodiversity criteria among those used to allocate research funds.
There are strong arguments for a specialised research facility to focus on biodiversity. The community consultation process indicated that protection of biodiversity is firstly, a national responsibility and secondly, the responsibility of those who benefit directly from its use. Therefore, as with other corporations, funding from industry and government would be justified. As many of the benefits arising would be of a non-market or a public-good nature, a higher than normal government contribution is appropriate. For the purpose of progressing discussions, it is suggested that around 80% of funds could come from government and 20% from industry. Options for levies to raise the industry proportion are discussed later in this chapter.
Specific recommendation 11.2
That a Biodiversity Research and Development Corporation be established under the auspices of the Commonwealth Environment portfolio to expand the allocation of funds directed to biodiversity research and to work in collaboration with other R&D Corporations.
Creating ownership of research
A related issue raised in consultations is the need to establish firmer links between research and those who will be expected ultimately to use the results of that research. Support for biodiversity conservation would be stronger if the people expected to use the results of that research are involved both in the formulation of research agendas and the conduct of that research.
Specific recommendation 11.3
That local extension and State agency staff be encouraged to have a greater involvement in bringing end-user views to the setting of research priorities, and as members of research teams.
Motivating privately funded research on biodiversity
Many smaller firms use attributes of biodiversity as their prime means of making money although their knowledge about the ecological systems they use may be lacking. However, the tax benefits available to big industry for syndicated research are not available to these small firms. If support for small scale research was forthcoming, industry would have an incentive to participate in biodiversity research, would own the conclusions and would be more likely to incorporate them into their management plans. The motivational dimension of offering fishers and foresters, for example, the chance to get involved in this activity could be substantial.
Specific recommendation 11.4
That the $500,000 limit on the amount of money necessary to obtain a 150% tax deduction for syndicated research be lowered to $100,000 for research projects on matters related to the protection of biodiversity and approved by the Minister for Environment.
The community consultation undertaken as part of this report concluded that access to information is an important component of motivating involvement in biodiversity conservation. However, the information needs to be provided in a form that is relevant to those charged with protecting and managing biodiversity. Similarly, the WA wheatbelt and rangeland case studies observe that lack of understanding of biodiversity values is an impediment to improved management and altruistic action. If land managers had access to standardised procedures for assessing the nature conservation values of remnant vegetation on their properties, then they would be more likely to conserve it.
Where information is available, this report shows that it is frequently centralised, and collected at levels inappropriate for use at the local level. A general problem is the centralised nature of information about biodiversity and strategies and techniques for its conservation. Access to information is also one of the necessary conditions for markets to operate in an economically efficient manner.
General recommendation 12
That information on biodiversity be made accessible and relevant at the local level and, wherever possible, delivered by people having credibility with the target audience.401
Informing resource users
As the National Biodiversity Conservation Strategy observes "The involvement of all Australians is vital to the conservation of biological diversity. Initiatives already being taken at the community level can be catalysed by a variety of integrated measures that increase awareness and involvement. The meaning of biological diversity and the consequences of its decline should be communicated in locally relevant terms. Extending that awareness to the development of a sense of community involvement and action is an essential progression..." (p.54). As the National Strategy goes on to suggest, this involvement should take the form of both meaningful public participation in planning and environmental impact assessment and increased community involvement in research and management activities. In some cases, the language used convey the importance of conserving biodiversity is not conducive to the development of partnerships with community and industry. Some people, for example, find discussions about threats to biodiversity conservation threatening.
Specific recommendation 12.1
That the Commonwealth, in association with the states, fund a biodiversity awareness campaign, to include:
- a review of the terminology they use with a view to drawing attention to the importance of conserving biodiversity;
- a major effort to teach the benefits of biodiversity conservation in schools which might include revised curricula, education packs and the organisation of 'wilderness camps' so that urban children can learn more about biodiversity;402 and
- a major effort to increase awareness about the means to obtain access to the incentive programs available for the conservation of biodiversity.
Both government officials and local communities involved in the consultation process repeatedly identified a need for biodiversity information to be made accessible at a level appropriate to local use. At present, too much information is centralised, developed only at a broad scale and available only to those with access to sophisticated computer technology.
Specific recommendation 12.2
That the existing work of both ERIN and NRIC be extended to provide an information base on ecosystem status at the bioregional and local level, and that it be made compatible with existing state government databases and made available for incorporation as an integral part of the planning process from an early stage.
Specific recommendation 12.3
That the Commonwealth Government continue to resource the Community Biodiversity Network and other community-based networks seeking to expand public awareness of and participation in biodiversity conservation.
Encouraging community monitoring
An important part of any awareness campaign is the collection of the information necessary to make people aware of the value of diversity. Monitoring by government is expensive but in many cases can be supplemented by community organisations.
Specific recommendation 12.4
That State and local governments encourage the creation of local biodiversity monitoring groups, and the participation of other community groups in monitoring activities by employing biodiversity extension officers with a mandate to undertake this work.
As demonstrated by Victoria's Land for Wildlife program, extension officers have a vital role to play in disseminating information. Typically, such programs supply information about regional strategies, suitability of sites for various alternatives, design requirements, maintenance requirements and the indicative financial costs and possible returns. The community consultation process has also highlighted the fact that the credibility of the channel through which the information is conveyed is as important as the information itself, and this has been reinforced in the case studies. Chapter 5 suggests that where information is uncertain, community and industry initiated processes are likely to be more effective than centralised and bureaucratic top-down processes. For this to occur, however, information must be made available to these groups in a succinct manner.
Specific recommendation 12.5
That the Commonwealth government support the long-term employment of biodiversity extension officers by state and local governments on a cost sharing basis.
Enhancing the value of biodiversity
Opportunities exist for Australia to gain economic benefit from its unique and diverse plant species. A concern is that 'others' will be quicker to seize the initiative in the use of this resource. It is recognised that funds are available and work is underway to investigate the potential of native plant species, but it is still important to encourage infant industries that are using native flora, and to promote potential economic benefits of native vegetation as a sustainable resource.
Specific recommendation 12.6
That existing research and extension programs be expanded to highlight the economic value of local native species as saleable products, as well as the benefits of remnant vegetation to the farming system.
Awards and prizes
Although not seen as a high priority by participants in the community consultation forums, there is evidence that prizes and awards can play a role in raising awareness of biodiversity issues and changing attitudes and, through this, reshaping community processes. The value of awards and prizes is reinforced in the findings of the Top End Case Study, which highlights their importance to the Manyallaluk community. Typically, these programs are low cost, but powerful in their capacity to bring about changes in community attitudes. The main benefit derives from the free publicity that surrounds their delivery and the foci produced by the nomination process. They can, for example, be effective in drawing attention to areas overlooked by existing arrangements.
General recommendation 13
That award programs which extend community awareness and understanding be expanded to encourage communities to protect, develop and restore biodiversity values.403
Specific opportunities to use awards and prizes as a means to increase awareness are many and need to be included in most packages. They include awards to councils for management of roadside vegetation and to farmers who make a substantial contribution to the conservation of biodiversity. Those projects in which landholders, governments and local communities come together to conserve biodiversity deserve special attention.
8.6.2 Voluntary incentives
Any separation of voluntary and motivational incentives is arbitrary. As defined in this report, the main characteristics of voluntary incentives are that government contribution to the total cost is small and people are free to choose whether or not they should participate. The degree of intervention is low. Within the community, voluntary approaches are generally regarded as equitable, and socially acceptable. Those that cover partial costs are relatively inexpensive to set up and administer. Where costs are covered only partially, however, there is little opportunity for accountability mechanisms to be built in, and without effective targeting they can be cost ineffective in solving site-specific problems. Therefore, voluntary incentives should mainly be used in circumstances where it is possible to target them – probably in circumstances where applicants manifestly have a genuine interest in protecting biodiversity, and little interest in obtaining a financial concession for themselves. Voluntary mechanisms are also likely to have value in circumstances where they can be effectively monitored at low cost and where the issue is one of enhancing value. However, consultations suggest that voluntary mechanisms cannot be depended upon to conserve biodiversity. They will only ever form part of the total package.
General recommendation 14
That governments at all levels establish, sponsor and develop and extend voluntary mechanisms for biodiversity protection, particularly in circumstances where these can be targeted and involve low monitoring costs.404
Even where there is a considerable gap between the public interest in biodiversity and the private interests of individual landholders, there is still scope for creative action, taking account of altruism and respect for broad conservation objectives on the part of some, while also addressing the more pragmatic concerns of others. Schemes such as the Land for Wildlife Scheme in Victoria have already achieved substantial biodiversity protection at modest administrative cost.
Specific recommendation 14.1
That governments develop and extend programs which give ongoing encouragement and advice to landholders who are committed to biodiversity conservation, and which make uncommitted landholders aware of the social, environmental and economic benefits which can be obtained from biodiversity conservation.405
Property management planning
Property management planning is gaining prominence as a management tool and as a prerequisite for some forms of government assistance. Recognition by land managers of biodiversity management requirements could be improved if these plans were to incorporate management requirements for remnant native vegetation and other biodiversity values. This may assist in placing remnant vegetation as part of the farm system in the minds of landholders and government agency staff.
Specific recommendation 14.2
That property management plans, used as a prerequisite for some forms of government assistance, be required to include specific actions to prevent the loss of biodiversity values.
Accreditation and codes of practice
Another simple incentive is accreditation, often accompanied by self-regulatory industry codes of practice of people and businesses that meet prescribed standards. The major limitation of self-regulation is that, in the large majority of circumstances, there is a considerable gap between the public interest of biodiversity conservation and the private interests of individual land users. These mechanisms should be targeted at circumstances where the gap between public and enlightened self-interest is minimal.
The National Landcare Advisory Committee is part of a process that is investigating strategies for advancing productive agriculture and sustainable environments. Part of a suggested strategy includes the development of a set of self assessment criteria that would encourage landholders to apply for formal accreditation. Accreditation by qualified assessors would deem the applicant eligible for participation in government programs associated with the ecologically sustainable use of natural resources. The idea is to use a stepwise assessment and accreditation process to recognise and provide incentives to leading land managers. Provided the accreditation process is properly conducted and monitored, this approach has the merit of reducing the cost of program participation. It is important that biodiversity criteria are part of such an accreditation procedure.
Specific recommendation 14.3
That an accreditation process, which includes biodiversity criteria, be used to reduce the costs for land holders who wish to participate in drought assistance and other programs that affect biodiversity values and generally to provide incentive and encourage to Australia's leading land managers.
Industry accreditation schemes and voluntary codes of practice could be developed in areas such as eco-tourism, environmental labelling and advertising. Innovatively, the Victorian Tourism Operators Association has negotiated a significant public liability insurance discount for its accredited operators. Mechanisms of this kind provide a financial incentive for operators to participate. Such measures are also subject to the consumer protection and 'truth in advertising' provision of trade practices legislation. This legislation provides a safety net of minimum acceptable standards on which can be built more demanding, voluntary and self-regulatory schemes focusing on quality and information standards.
Specific recommendation 14.4
That the eco-tourism industry develop accreditation schemes and voluntary codes of practice which include criteria relating to the conservation of biodiversity and which offer financial advantage to participating operators.
A voluntary roadside program
Roadside vegetation represents an important aspect of remnant biodiversity in places as diverse as the wheatbelt of south-western Australia and Kangaroo Island. Efforts to conserve such corridors vary widely both within local communities and in the extent of government support provided. As indicated in the Kangaroo Island case study, roadside verges are of immense value to the tourism industry. Commonwealth funding through the Save the Bush and Corridors of Green programs provides financial incentives for community based retention of streamside vegetation along the Murray River, but submissions to this project indicate that transport authorities and others charged with responsibility for infrastructure development show little regard for the need to conserve remnant vegetation corridors on roadway easements and adjacent waterways.
Specific recommendation 14.5
That the Commonwealth and States jointly develop a roadside vegetation and corridor enhancement program.
8.6.3 Property-right mechanisms
Essentially there are two types of property-right mechanisms: those such as covenants and management agreements which can not be separated from the resource with which they are associated, and those such as licences to catch fish, shoot kangaroos and use water which, with many caveats, which can be moved from one location to another.
Effectively, a management agreement is a contract to undertake work in return for payment. Management agreements can be used to reimburse people for the costs of feral animal or weed control that cannot be recovered through normal market processes. Agreements of this nature are likely to be most valuable when the standard required to maintain biodiversity values is higher than that necessary for agricultural production. In such cases, there is a case for reimbursing the difference between the cost applicable to farmers who adopt best agricultural practice and that needed for the unique attributes at the site. Management agreements can be used also to reimburse a landholder for the cost of fencing out an area of high biodiversity value.
General recommendation 15
That management agreements be used as the prime mechanism for reimbursing people for the cost of site specific works of a non-market nature.406
Specific recommendation 15.1
That management agreements be used as a transitional means to obtain voluntary acceptance of the need to conserve biodiversity but, wherever possible, be phased out once this transition has been achieved.
Managing small nature reserves and low-use parks
In certain circumstances, local landholders can perform biodiversity management operations on crown land at less cost than government employees. Often the work required is in the nature of special fencing, and feral animal and weed control measures. Cost efficiencies are especially likely in situations like the fragmented wheatbelt landscape where remnants are small in size, dispersed, and distant from government agency branches. Opportunities to implement such arrangements exist both on National Parks and Reserves. In remote parts of the Northern Territory, for example, some pastoralists are being given the opportunity to collect camping fees in return for an agreement to manage the area.
Specific recommendation 15.2
That state conservation agencies investigate the use of management agreements with local landholders to undertake specified management actions within public conservation reserves.
Reducing the threat of feral animals and weeds
As illustrated by our pastoral case study, land that surrounds conservation areas is a source of feral animals and weeds which threaten biodiversity values located within the area. Through the use of voluntary management agreements, one option available to park managers is to use the surrounding area as a buffer zone. In the case of Mallee Fowl in Yathong Nature Reserve, for example, fox control on surrounding pastoral lands has provided a buffer zone of low fox density around the core conservation area.
Specific recommendation 15.3
That state conservation agencies investigate the use of management agreements with local landholders to undertake specified management actions on private land adjacent to public conservation reserves.
In Australia the most common covenant is one that prevents an area of land from being cleared. Usually conservation covenants are attached to a land title and restrict that area from being used in a manner which diminishes its conservation value. When they are attached to the land title, the obligations associated with them transfer from owner to owner. Use of conservation covenants (Heritage agreements) is widespread in South Australia and is being introduced to varying degrees in other states. Rate rebates are offered in several states to people who accept a conservation covenant over their land. As summarised in Appendix 1, introduction of clearing controls has substantially reduced the cost of acquiring conservation covenants. Experience is showing that a significant number of landholders are now willing to have a covenant attached to their land on a voluntary basis.
As indicated in the case studies, conservation covenants are particularly effective in protecting remnant vegetation and ensuring that the benefits of biodiversity conservation actions will accrue to future generations. They provide a useful platform for the development of management agreements that require periodic renegotiation.
General recommendation 16
That conservation covenants be used to underpin management agreements to ensure that the long-term benefits of work implemented under an agreement are realised.407
Specific recommendation 16.1
That, as many of the benefits of biodiversity conservation are long term, all conservation covenants should be in perpetuity.
Correcting perverse (unintended) rating system effects
Most land rating systems are based on 'unimproved capital value' or 'site value' which is market value less the value of built improvements. In deriving this value it is usually assumed that most agricultural land will be cleared and put to its most profitable agricultural use. This approach to valuation provides a perverse incentive for people to clear land that can be offset by offering rate and land tax rebates for land under a conservation covenant. (Earlier we recommended a framework whereby Local Government would be compensated for these costs via a modification to the formula used to allocate Commonwealth Government funds.)
Specific recommendation 16.2
That the perverse effects of rating systems on vegetation clearance be reduced by recording the presence of conservation covenants and easements in land valuation data files and indicating on land valuation notices that the valuation has been adjusted to account for this.
Specific recommendation 16.3
That where land tax or rating systems can not be adjusted to recognise restrictions on use or clearance of native vegetation, land holders be reimbursed for the difference between the assumed and actual land-use potential. This rebate should be in proportion to the difference between the rated value and the actual value of the land. If the restrictions are changed then the value of the rebate should be repaid to government. Wherever possible, rate rebates should only be paid for land protected by a conservation covenant or other similar mechanism.
Sharing the cost of providing non-market benefits
As indicated in earlier chapters, the cost of conserving biodiversity needs to be shared by all people in proportion to expected benefit, whilst maximising opportunity to recover these cost through market processes. Equitably, those costs that can not be recovered through the market need to be met by the Commonwealth Government, State Governments and local governments. As there has been under-investment in off-reserve conservation, there is a case for direct action to provide States with a strong incentive to protect biodiversity on private land. From a Commonwealth Government perspective, this can be done either through untied grants to states or, alternatively, through tied grants which create a direct incentive for biodiversity conservation. Our consultations indicate a strong preference for the latter approach. It could be implemented via a scheme which reimburses States for part of the cost of increasing the area protected by conservation covenants on a proportional basis.
Specific recommendation 16.4
That the Commonwealth government fund State conservation-covenant acquisition and management agreement programs on a cost sharing basis.408
In other parts of the world, it is common for non-government organisations to acquire conservation covenants and enter into management agreements on behalf of their members. The international experience suggests that they can negotiate and, with government assistance, enforce these agreements in an efficient manner. In other parts of this chapter we recommend measures to give these organisations the opportunity to contribute to biodiversity conservation on an equal footing. For maximum benefit, non-government organisations need to be able to acquire conservation covenants and management agreements. Local government should have the same opportunity.
Specific recommendation 16.5
That state governments implement and where necessary enact legislation that empowers local governments and non-government organisations to acquire and hold conservation covenants and easements and enter into management agreements. Dealings of this nature should be exempt from stamp duty.
Improving licensing, leasing and permit systems
When the interface between biodiversity and economic activity is very close, licence, leasing and permit systems are often used to control the impact of this activity on biodiversity. Examples examined in the case studies include fishing licences, kangaroo shooting, pollution permits, ecotourism operator licences and clearing licences. One of the advantages of these mechanisms is that conditions attached to each licence can be tailored to local circumstances.
It is not the role of this report to recommend which form of licence is appropriate in any specific circumstance. Nevertheless, arising from our Wheatbelt, Fishing and Wet Tropics case studies, some general recommendations can be made to improve the effectiveness of licences. In particular, we stress that biodiversity conservation should be seen as a precondition to the ecologically sustainable use of natural resources.
General recommendation 17
That in the design of licence systems, emphasis be placed on dependability in protecting biodiversity in an efficient and equitable manner.409
Tradeable licences and permits
Of special interest are tradeable-licence systems. Although tradeable property-right mechanisms are often advocated by economists, few have succeeded in maintaining biodiversity values. Moreover, the benefits of transferable rights are more apparent in areas where one can trade equivalent units (eg fisheries) then where one cannot (eg wetland mitigation). Chapter 6 concludes that over-simplistic design and a failure to link them to periodically-revised management plans are the main impediments to success of tradeable rights. Where biodiverse resources are used for commercial purposes, tradeable rights have a place but should never be seen as the sole solution. In virtually all cases, they need to be supported by an appropriate network of regulatory, financial and institutional mechanisms. Institutional arrangements, such as the co-management options recommended earlier, are important for success. One advantage of some tradeable right systems is that they force communities (and government) to define the ecological targets and precautionary standards necessary for biodiversity protection and formulating them into management plans. Well developed plans consider possible impacts on ecosystem and genetic diversity as well as species diversity. As new information becomes available, these plans need to be adapted periodically. Coupled to these plans, tradeable-right systems can be used in a cost-effective manner to keep industry within the constraints set.
Specific recommendation 17.1
That tradeable licence and permit systems be linked to periodically revised bioregional or ecosystem management plans and be designed to maximise the incentive to protect biodiversity.
One barrier to the introduction of tradeable licences and permits is the uncertainty about the capital gains tax implications associated with implied property rights that are embodied as part of the value of a business. When these implied rights are excised from that business and formalised in another business, the resulting property right becomes liable to capital gains tax. Much of the tax-liability uncertainty that may be associated with the introduction of new property rights could be removed with a simple amendment to legislation. This amendment should make it clear that property rights issued to a business that was operating prior to 20 September 1985 (when capital gains tax provisions were introduced) would be classified as being in existence prior to that date and not subject to capital gains tax.
Specific recommendation 17.2
That for the purpose of raising acceptance of the use of property-rights systems as a means to protect biodiversity values, the Taxation Commissioner make it unequivocally clear that any new individually-tradeable property rights associated with property held before 20 September 1985 will be exempt from capital gains tax.
Resource security and biodiversity
A related issue is the means by which property rights are defined. As a general proposition, the economic incentive for resource users to take a long-term view of resource management issues is greatest when they have a guaranteed financial interest in the future value of a resource. One way of strengthening the incentive for biodiversity conservation is to limit this guarantee to those who comply with conditions expressed in licence conditions and periodically-revised management plans. For fishing, forestry and pastoral land management, it is critical that rights be conditional and capable of adaptation through time as new information about biodiversity becomes available.
Specific recommendation 17.3
That licences, leases and permits to use biodiverse resources be conditional, and resource security be limited to those who comply with these conditions.
Improving water management
Allocations of resources and their definition also needs to reflect the nature of social expectations for those resources. As illustrated by the Macquarie Marshes case study, many irrigation rights were allocated in a time when environmental considerations were less understood and valued. Today, it is being recognised that the allocation of sufficient water to the environment is a pivotal part of biodiversity conservation.
Specific recommendation 17.4
That the mechanisms being developed for the establishment of water allocations for the environment under the National Water Industry Reforms adequately reflect the need to maintain biodiversity values.
One underlying cause of biodiversity loss is the incomplete specification of property rights. Regulation of catchment water flows to supply towns and irrigation water for agriculture, for example, has led to competition for a limited supply of water between irrigation demands and the needs of the environment. As illustrated by our Macquarie Marsh case study, much of the controversy associated with these debates arises because of the uncertainty surrounding the extent of flows actually received by the environment versus those required to maintain river health and wetlands to a determined size and quality.
Specific recommendation 17.5
That additional funding be provided to current research programs to ensure scientific determination of adequate timing and volume of water flows to be delivered to the environment.
A conservation easement may enable nature based tourism operators to have special access to privately owned areas of high biodiversity value. Private agreements between landholders and tour operators may involve the specification of payments to landholders for right of access. The landholder in return agrees to maintain the area of biodiversity value. This approach is of particular relevance for the tourism industry, and represents a method whereby tourism can provide incentive to landholders to protect areas of biodiversity value.
Specific recommendation 17.6
That conservation easements be promoted as a mechanism to enable tourist access to private land and provide incentives to the landholder to maintain biodiversity values.
8.6.4 Regulatory incentives
Despite the emphasis in this report on motivational, social and market based incentives, there remains an important role for regulation because, acting alone, bundles of less interventionist, financially positive and suasive instruments may not be sufficient to protection biodiversity in all circumstances. Regulations provide an essential safety net in a way that other instruments may not. Many regulations have in fact developed in sophistication to the point that they embody mechanisms that mimic market processes in the face of uncertainty. Regulations on producers also have a function in making the costs of complying with them tax deductible.
Dealing with the recalcitrant few
The community consultation process indicated strong support for an underlying set of regulations to catch the recalcitrant few who seek to 'free ride' on the positive actions of the majority. In fact, failure to provide a regulatory safety net to catch the recalcitrant few can result in failure of the entire incentive mix because those who act voluntarily may start to perceive that their actions are not worth the effort.
General recommendation 18
That all incentive mixes be underpinned by a set of 'safety net' regulations to catch the recalcitrant few not persuaded by positive instruments.410
Precautionary standards and regulations
Regulations also have a role in indicating where precaution is necessary. One clear role for regulations is in establishing processes that force the assemblage of all information and consideration of the interests of all people. The 1995 Western Australian clearing regulations, for example, set a precautionary standard that at least 20% of each local government area and each property should remain uncleared. Permission is required to clear and, for those who wish to clear beyond the 20% standard, the onus is on the landholder to show why clearing will not compromise the broader interests of society. In setting such standards, it is necessary to consider the subsidiarity guideline developed in chapter 6 and introduce mechanisms that prevents one level of government from undermining the biodiversity protection intentions of another.
General recommendation 19
That each level of government set precautionary standards and use precautionary regulations to protect those aspects of biodiversity for which it is accountable.411
Specific recommendation 19.1
That no level of government should undermine the precautionary standard set by another level of government, or a community or industry.
Another is the use of precautionary standards as a means to shift the onus and cost of assembling information from the government to the developer.
Specific recommendation 19.2
That the onus and cost of providing the information necessary to assess whether or not precautionary standards are achieved be placed on the party proposing action that may threaten biodiversity values.
Chapter 6 proposes principles for designing regulations - they should be fair, reasonable, imposed in a graduated fashion after non-regulatory incentives have been trialed and accompanied by severe and public punishment for recalcitrants. In accordance with the guidelines listed earlier, moves towards 'lowest common denominator' regulation should be resisted.
Ecosystem and habitat diversity
A barrier to existing regulatory processes is a failure to consider biodiversity from an ecosystem or habitat perspective. Most environmental impact assessment procedures, for example, focus on species diversity. Furthermore, the majority of planning decisions are made not in association with environmental impact assessment but rather on a case-by-case basis through decisions by local government.
Regulatory incentives also provide protection against the fact that not all members of target groups will respond as desired or expected. As a biodiversity problem approaches irreversibility, regulation is probably the most dependable strategy.
Specific recommendation 19.3
That the Commonwealth introduce Biological Diversity Conservation legislation, using the model developed by the Australian Committee of IUCN as a basis for consultation.
Specific recommendation 19.4
That the Commonwealth and state governments amend existing legislation to ensure that development proposals consider the impacts on endangered and vulnerable species and ecological communities, and that cumulative impacts of development on other aspects of biodiversity within a region are also considered as part of comprehensive environmental impact assessment.
Specific recommendation 19.5
That endangered and vulnerable species, endangered ecological communities and threatening processes within the marine environment be added to the schedules of the Endangered Species Protection Act 1992.
Regulations that control vegetation clearance are changing rapidly. In the past year, three states – Western Australia, Queensland and New South Wales – have began processes that seek to reduce the rate of clearing in Australia. The reasons for this are complex, but primarily associated with the impact of clearing on biodiversity, dryland salinity and the threat of climate change. Recommendations set out elsewhere suggest:
- the setting of precautionary standards requiring people who wish to clear land to show that, by doing so, they will not compromise biodiversity values;
- a strong but not exclusive role for local communities and local government in making decisions about which habitats may be cleared or in the case of coastal areas, drained or subject to other forms of development;
- the use of compensation for the loss of a (speculative) land development option but only as a circuit-breaking transitional measure and only when it is necessary to gain community acceptance or when a proposed policy change is very inequitable;
- there is a special case for compensation to encourage people to reveal the presence of an endangered species or other unique attribute; and
- the preferred mix of instruments will include use of perpetual conservation covenants, and management agreements coupled with a land tax and rating system that recognises the limited production opportunities on uncleared land.
The community is a major stakeholder in biodiversity decision making, yet in many contexts, under present legislation, decisions are made without any opportunity for challenge by interested parties other than the resource users themselves. The model adopted in a number of pieces of New South Wales legislation, which provides a right for members of the public to object to development proposals or permits granted, addresses this concern. The evidence is that broader standing provisions contribute to better decision making and are very rarely misused. Moreover, as many decisions in relation to biodiversity can not be reversed, often community concerns can be addressed only before these decisions are made.
General recommendation 20
That 'any person' be allowed to appeal against contestable decisions made under biodiversity conservation legislation.412
One of the questions that this report addresses is the degree to which the proposed incentives should be funded from general revenues collected by all levels of government; how much should be financed by imposing costs on those who use or benefit directly from attributes of biodiversity; and how much should be made a part of the normal costs of production. Many of the above recommendations make biodiversity conservation part of the normal costs of production through the creation of conservation covenants, establishment and adaptive management of property rights, the imposition of regulations and creation of new opportunities to use attributes of biodiversity. In the remaining section we deal with opportunities to reduce the need to finance biodiversity and then with ways to raise the money when necessary.
8.7.1 Price-based mechanisms
Many of the benefits of biodiversity conservation have no market and, hence, no price. Related market transactions therefore, occur without recognition of biodiversity values. The value of biodiversity conservation is assumed to be zero. Market failure is one of the underlying causes of biodiversity loss which can be redressed, to some extent, by removing perverse market incentives, making polluters pay and making users pay for the costs of resource use. When prices reflect the risks imposed by threats to biodiversity, industry is encouraged to search for efficient ways to reduce the threatening process.
General recommendation 21
That in the interests of biodiversity conservation Commonwealth, State and local governments make greater efforts to apply the Polluter-Pays and User-Pays Principle.413
Our fishery case study indicates that one of the biggest threats to estuarine and marine biodiversity is pollution from both point and non-point sources. Options to reduce this threat include changes to the licence system so that licence conditions reward pollution reduction. The other is through attention to price arrangements.
Specific recommendation 21.1
That some of the money collected through pollution charges be allocated to biodiversity conservation.
Pricing for biodiversity
A related issue is the cost of access to natural resources. If, for example, irrigation water is made available at less than full cost then irrigators have an incentive to irrigate a larger area and use water less efficiently. Because water is cheap they overvalue production and undervalue conservation.
Specific recommendation 21.2
That water prices be adjusted to reflect the full cost of supply.
Financing the non-market dimension
The community consultative forums indicated a strong view that the biodiversity protection was a national community responsibility, and should not become an additional cost burden solely for the users or beneficiaries of biodiversity. As some biodiversity conservation is a public good, the literature suggests that at least the non-marketable public good portion should be borne by national governments. At the same time, however, as much as possible should be made part of the normal costs of economic activity.
General recommendation 22
That wherever necessary, industry and community contributions to the costs of protecting biodiversity be supplemented by those supplied from government sources.414
8.7.2 Levy-based mechanisms
Contributions from industry
Both community and industry have a role in contributing towards the cost of biodiversity conservation. Where possible, this is most efficiently achieved through market mechanisms but for many issues that relate to biodiversity this is not possible, and specific levies will be necessary.
Levies are already used in some cases to contribute to biodiversity conservation. Our Wet Tropics case study illustrates, for example, how a levy on tourists to the Great Barrier Reef is used to finance biodiversity research. Similarly, farmers through contributions to LWRRDC are contributing to the cost of research on remnant vegetation. Whilst not commonly used in Australia, levies also have a role in making users of biodiversity aware of the cost of their activities.
General recommendation 23
That levies and charges be used so that identifiable direct beneficiaries of biodiversity conservation recognise the full costs of supplying services to them.415
Controlling and preventing damage from ecotourism
In many areas there is potential for private land holders to develop nature-based tourism facilities. However, where no fees or very low fees are charged for entry to nearby public reserves, it is difficult for private nature based enterprises to compete. Entry fees to many National Parks and reserves which do not reflect the cost of service provision act as a disincentive to private enterprise to supply conservation benefits. This is an argument to raise fees at public sites to levels that would provide an incentive to private providers of conservation benefits.
Specific recommendation 23.1
That levies and charges be used as the main means to recover the cost of providing access to nature based and ecotourism.
Specific recommendation 23.2
That entrance fees to public National Parks and Nature Reserves should at least reflect the cost of supplying visitor facilities and infrastructure but the cost of supplying non-use benefits should not be levied against visitor fees.
Maintaining roadside verges
Australia's roadside verges contain remnants of vegetation and examples of species not represented elsewhere. Used by us all, there is an opportunity to finance maintenance and enhancement of this asset via a general levy on the main threat to its survival by road maintenance, road construction and communication infrastructure development. Only a very small levy would be necessary. A 0.01% levy on road works, for example, would produce much of the revenue necessary to conserve the vast network of roadside vegetation that is not yet represented in Australia's protected area network.
Specific recommendation 23.3
That a Roadside Vegetation and Corridor enhancement program, be developed by State and Commonwealth governments and be financed through a levy on funds directed to road and other infrastructure development and maintenance.
Reducing the impact of perverse incentives
A perverse incentive is one that induces behaviour resulting in loss of biodiversity or creating a threat to biodiversity conservation. Often perverse incentives occur because the government has intervened in the market to secure social or economic ends without fully understanding or considering their implications for biodiversity conservation. Governments need to ensure that policy and publicly-funded assistance programs avoid perverse effects. One excellent illustration of this type of problem is the adverse effects of price support for agriculture in both the United States of America and the European Union. Examples of Australian assistance programs are limited, but some do exist. In virtually all cases the most efficient means to address perverse incentives is to remove the underlying cause of the problem, rather than add further distortions which may also contain unintended consequences.
General recommendation 24
That perverse incentives be removed or mitigated as a precursor to the introduction of a range of positive incentive mechanisms.416
Maximising benefits from government programs
Some government programs have produced unintended declines in biodiversity values. One example of this are drought policies that seek to maintain livestock numbers in times of ecosystem stress. Another is price support for industry. In the same way that failure to charge users for the full cost of natural resources like water or forest timber, price support also encourages expansion into areas that, without that support, would have remained under native vegetation.
Specific recommendation 24.1
That publicly-funded assistance programs %nd such as those used for drought assistance, rural adjustment and production support for sugar – use cross-compliance mechanisms to ensure that these programs do not have perverse effects on biodiversity conservation.
Specific recommendation 24.2
That the existing opportunity for land holders to claim a 20% rebate on expenditure on prevention of land degradation be restricted to that identified in an approved management plan which also considers opportunities to protect biodiversity and the means to reduce threats to biodiversity values.
Recognising development as a capital improvement not cost
For a large part of this century taxation provisions have encouraged land clearing as a means to develop an agricultural base for Australia's economy. That era has now past, and most taxation concessions which accompanied this development ethic have been removed. Nevertheless, as they are one of the underlying causes of threats to biodiversity, the removal of those that remain is appropriate. One opportunity is to treat capital expenditure as a production cost.
Specific recommendation 24.3
That when vegetation is cleared using a farmer's own equipment and labour, these 'land development' costs be depreciated in a manner similar to other capital developments and not written-off in the year that expenditure occurs.
Expanding recognition of farmer contributions
Perverse incentives can operate in both directions. Under-pricing can cause as many problems for biodiversity conservation as over-pricing. In particular, two tax mechanisms need attention.
Specific recommendation 24.4
That the list of eligible land care expenditure be expanded to include the cost of habitat rehabilitation and tree planting off-farm so farmers are encouraged to contribute to the cost of controlling threats like dryland salinity and its upland source.
8.7.3 Financing mechanisms
Increasing support for levies
As shown in consultations and chapter 6, acceptance of the imposition of price mechanisms is likely to be greater if the funds collected from any charges, levies or other fundraising techniques are used in a transparent manner. Hypothecation, giving those who are paying charges and levies the right to determine how the resultant resources are spent, often has the benefit of increasing acceptance of those same charges and levies. The community consultations undertaken for this report reveal that, despite the Treasury Department arguments against hypothecation, communities and industry are willing to pay such levies when they know how that money will be spent. There has been some increase in the use of hypothecated levies to finance biodiversity conservation.
General recommendation 25
That revenue raised for the purpose of financing biodiversity conservation be placed in conservation funds managed by the community or industry that raised that money.417
Specific recommendation 25.1
That revenue raised through the use of charges and levies as a means to pay for pollution control and prevention costs be allocated to that purpose in a transparent manner.
Specific recommendation 25.2
That revenue raised through charges and levies on industry for the purpose of biodiversity conservation be allocated to that purpose in a transparent manner.
Increasing the role of non-government organisations
Communities have a strong preference for actions and activities that they initiate themselves. One of the most effective ways of encouraging communities to initiate programs is to provide strong tax incentives for individual donations to non-government agencies who aim to conserve biodiversity. As indicated in Chapter 5, the monetary value of such donations is often multiplied many times. With appropriate constraint, the taxation arrangements can be used to motivate individual people to contribute to biodiversity conservation in a very efficient manner. Many hobby farmers and owners of rural retreats, for example, are very open to mechanisms which would make it possible for them to make a significant contribution to biodiversity conservation. Tax mechanisms are, however, imperfect as the benefits form such mechanisms are skewed towards those with higher taxable incomes. Nevertheless, such tax mechanisms are effective and widely used in Australia as a means to encourage donations to support actions in the public interest.
General recommendation 26
That taxation incentives be recognised as the most cost-effective means of encouraging altruistic investments in biodiversity conservation by the private sector, especially when implemented in association with non-government organisations.418
Taxation arrangements are complex and involve intricate considerations, so recommendations in this area need to be detailed.
Specific recommendation 26.1
That the 20% rebate for the cost of work on buildings and structures recorded on a prescribed heritage list and approved by the Minister for Communication and the Arts be extended to include work approved by the Minister for the Environment on the rehabilitation or protection of areas identified as being of significance for biodiversity conservation.
Specific recommendation 26.2
That donations of land to approved environmental organisations and for the purpose of extending Australia's conservation network be deductible from assessable income irrespective of the date when the land was purchased.
Specific recommendation 26.3
That the Income Tax Assessment Act 1936 be amended to include donations of conservation covenants or easements to the Nation of Australia or an organisation listed on the Register of Environmental Organisations.
The more we get out of the world the less we leave, and in the long run we shall have to pay our debts at a time that may be very inconvenient for our own survival.
—Norbert Weiner, The Human Use of Human Beings, 1954
Australia's future holds enormous prospects if we can harness the wealth of our biodiversity, and prevent it being squandered on short term and unwise investment. Australia's community today has the opportunity to firmly establish biodiversity as a valued natural resource, allowing its full potential to be realised and its contribution to an ecologically sustainable future to be given the fullest reign. Biodiversity conservation is a necessary precondition for ecologically sustainable resource use.
The Australian community of the next generation, and future generations, will benefit from development processes that integrate biodiversity protection and sustainable development at the earliest possible stages. Community and industry participation will occur at all levels of government decision making and will become an essential part of day to day management of the natural environment. Incentives for biodiversity conservation will be embedded in economic policy. Industries which use biodiversity resources, and the institutions that guide them, will have adopted approaches to biodiversity protection which ensure that its use is within the limits that allow for the needs of current and future generations. Use will occur only within limits necessary to preserve future options. Non-government organisations will be actively involved in managing assets of special value to the nation.
Planning and decision making will be based on the available scientific information about biodiversity values and threats and ways to overcome the threats at a regional, catchment and local level. Where information is not available, actions with irreversible consequences will be avoided. Rather than biodiversity being an issue of conflict, stakeholders will work together to develop common goals and strategies. The approach will be strategic and adaptive. Partnership arrangements between the stakeholders will be developed in response to specific biodiversity needs and the aspirations of local communities. Protection of biodiversity will be the priority consideration in future planning for economic development, and this will be enacted at the highest levels of government, and implemented at every level of government. A precautionary approach will underpin all development, which in itself takes into consideration precautionary standards for biodiversity protection.
390. World Resources Institute; World Conservation Union and the United Nations Environment Program (1992) Global biodiversity strategy: Guidelines for action to save, study and use Earth's biotic wealth, sustainably and equitably. Paris, France.
391. ANZECC Task Force on Biological Diversity (1993) National strategy for the conservation of Australia's biological diversity. Department of the Environment, Sport and Territories, Canberra, p16.
392. See sections 1.6.2, 3.2.2, 3.4.1, 3.4.2, 4.7, 4.7, 5.2.5, 5.2.7, 5.2.3, 7.3 & 7.4.
393. See sections 3.4, 4.2 & 5.2.6.
394. See sections 1.4, 1.5, 3.4, 4.2, 5.2, 6.3, 6.4, 7.3 & 7.4.
395. See sections 3.1, 3.2.2, 3.4, 3.5, 4.2, 4.6, 4.7, 4.8, 4.9 & 5.2.
396. World Resources Institute; World Conservation Union and the United Nations Environment Program (1992) Global biodiversity strategy: Guidelines for action to save, study and use Earth's biotic wealth, sustainably and equitably. Paris, France.
397. See sections 3.2 & 5.2.
398. See sections 2.4.2, 3.2.2, 3.4.2, 6.3.5 & 6.6.6.
399. See sections 2.5.6, 3.2, 3.5, 3.6, 4.9 & 5.2.
400. See sections 3.2.1, 4.6, 4.8, 5.2, 5.3 & 6.3.2.
401. See sections 3.2, 3.3, 3.5.3, 4.2, 5.2, 6.3, 6.4 & 7.4.
402. See the case study on the Western Australian Wheatbelt, Appendix 2.1.
403. See sections 2.4.2, 3.2, 3.3, 3.4, 5.2, 6.3.4, 6.3.4, 6.4 & 7.4.
404. See sections 3.2, 4.2, 6.4 & 7.3.1.
405. On the particular attributes of Land for Wildlife in this regard, see Platt, S.J. and Ahern, L.D. (1994) Nature conservation on private land in Victoria, Australia: The role of Land for Wildlife. Department of Conservation and Natural Resources, Melbourne.
406. See sections 2.4.5, 2.5.2, 4.2, 4.3, 4.4, 4.5, 4.6, 4.8, 6.4, 6.5 & 7.5.
407. See sections 2.4.5, 2.5, 4.2, 4.3, 4.4, 4.5, 4.6, 4.8, 6.5, 7.4 & 7.5.
408. As South Australia has already established a widespread network of Heritage Agreements, this state may require special consideration.
409. See sections 4.6, 6.5, 7.4 & 7.5.
410. See sections 3.2, 6.7, 7.4 &7.7.
411. See sections 2.4, 3.2, 3.6, 6.5, 6.6, 6.7, 7.3.4 & 7.4.
412. See sections 3.2, 6.7 & 7.4.
413. See sections 4.2, 4.6, 4.8, 6.6, 7.4 & 7.5.
414. See sections 2.5.6, 3.2.3, 6.6 & 7.4.
415. See sections 2.4.6, 2.5.6, 3.3, 3.2.3 & 6.6.2.
416. See sections 2.2, 4.5, 4.8, 6.6.5 & 7.4.
417. See sections 2.4, 3.2, 3.3, 4.8.4, 6.6 & 7.4.
418. See sections 2.5.6, 3.2, 3.3, 4.3, 4.8, 6.6 & 7.4.