Tuesday, September 18, 2007

Nest Egg

I spent today around Albury-Wodonga getting informed about an interesting trial of a new auction system for purchasing conservation land from farmers. It is called Nest Egg.

The idea is that conservation scientists do a careful tabulation of the conservation benefits achievable from sites nominated by farmers (the farmer is not told this value) and farmers then bid, via a sealed bid auction, to supply conservation services. Sites are selected according to the highest ratio of benefits/bid subject to the conservation authority budget. In this latter respect the approach is similar to the BushTender scheme practised in Victoria. Both schemes are largely based on encouraging the provision of conservation inputs (e.g. fencing, feral proofing) but Nest Egg alone provides bonuses if conservation objectives and species appearances are achieved. It thus targets outputs as well as inputs.

Although I was sceptical of the scheme initially I came away impressed with its possibilities. Farmers with land that is highly biodiversity productive effectively get paid a stewardship payment for maintaining that biodiversity. Those areas which have with land that can be converted to becoming a biodiversity rich resource at low opportunity cost are also supported. Conservation programs that maintain or enhance biodiversity at minimum cost are thereby realised.

I was particularly interested in variants of the scheme which emphasise connectedness and developing corridors for species to relocate in response to climate change. Locally these can assist attitudinal relocations as temperatures increase. In an interesting two-stage auction design, farmers are initially asked to bid to supply land areas. Once these bids are made, a map of candidate areas is re-presented to the farmers who are then encouraged to form connected habitat corridors and the bid process begins anew. It is very neat.

The species being targeted in NSW are the Plains Wanderer, the Bush Stone Curlew (above) and the Brolga. The Plains Wanderer is a unique species that faces very severe threats. A nice touch to the afternoon was seeing a Bush Stone Curlew in a remnant patch of vegetation north of Albury. These are quite common birds in north eastern Australia but very rare down south. These are flagship species but the intention is to conserve environmental systems as a whole using these as indicators and as a means of gaining publicity and public acceptance.

There are questions about the application of these auctioning systems. Does putting a price on conservation reduce supply by cutting into ‘good citizenship’ motives for conservation? This is analogous to the argument that pricing blood supplies can reduce not increase such supplies because benevolent motivations for donating are destroyed. Also the contracts awarded to farmers last only three years – what happens when they end? Will farmers fail to exercise care of resources they are used to being paid to maintain? Do payments corrupt moral incentives?
My guess is that these problems are minor and that the auction systems developed will play a small, though important, part in maintaining Australia’s threatened biodiversity. I think we still need to drastically expand our public reserve system.

I am in the process of getting informed about these sorts of auction systems – in Victoria they are almost old hat so I am a bit behind the times – and I will post again when I am better informed.


Anonymous said...

who's paying for it, harry?

hc said...

The trial is publicly funded. Budget for bids is $366,000 over 3 years.

Online Auction said...

The new auction system is a good and cost effective way to improve the biodiversity. This system aids in solving the problem of increasingly endangered bird biodiversity.