EcoTender is designed to address multiple environmental outcomes.
Land and native vegetation management can result in a number of different types of environmental outcomes, including habitat for native animals, protection of ecosystems and biodiversity, improved water quality, changes in the quantity of water in streams and rivers, prevention of salinity and carbon storage or sequestration. The extent to which native vegetation management can provide these services depends on factors including location, and the extent and quality of native vegetation.
At a catchment or bioregional scale, the challenge for public NRM investors is to understand, and optimise the multiple outcomes that flow from land management actions that occur at the landholder’s paddock scale.
The design of EcoTender builds upon the design of BushTender, Victoria’s auction for a single outcome, terrestrial biodiversity. EcoTender expands the concept to account for the multiple environmental outcomes produced by land and native vegetation management.
The challenge for EcoTender is to:
- estimate the quality and quantity of multiple environmental outcomes that result from individual landholder actions
- reveal those landholders who can provide quality environmental outcomes at low cost
- ensure landholders undertake the agreed land management actions despite the difficulty monitoring individual actions
- ensure any negative environmental impacts of land management are accounted for.
EcoTender uses the Victorian habitat hectare methodology to estimate biodiversity benefits. In addition, the Catchment Modelling Framework (CMF) is used to estimate the impact of an action with respect to water quantity and quality impacts, carbon and saline land. The CMF can assess and account for the differences in environmental impacts between farms. The information provided by the CMF is used to determine the Environmental Benefit Index (EBI) for each land holder’s bid.
EcoTender involves a competitive tender process that creates the incentive for landholders to reveal the cost to them of undertaking the actions in their bids. Landholders' bids are assessed as a function of the environmental benefits they offer and the cost of their bid. Contracts are offered to those who produce the most environmental value for money.
EcoTender involves a series of key steps.
- Expressions of interest: In EcoTender, land managers are invited to submit bids to enter into a conservation contract. Land managers register an expression of interest in the project through field officers.
- Site assessments: Field officers assess each site and provide advice on environmental significance, as well as advising on native vegetation management and revegetation options for landowners. Landholders are informed of the expected environmental impacts, including with respect to carbon biosequestration. EcoTender treats carbon biosequestration produced by landholders as a private good, and connects landholders with a third party purchaser of carbon credits.
- Development of management plans: Landowners identify proposed actions and field officers prepare management plans which form the basis of each bid.
- Submission of bids: Landowners submit management plans and their bid price for undertaking the actions.
- Bid assessment: The EBI is estimated for each bid, and contracts are then offered to those landholders who offer the highest EBI per dollar.
- Management agreements: Successful bids are formalised through signed management agreements. Management contracts involve design features such as progress payments based on actions being undertaken, self reporting and random monitoring to provide the incentive for landholders to continue to undertake the management actions and produce the environmental outcomes.
- Payments and reporting: Payments are then made against completion of actions outlined in management agreements. Landholders are also required to report on contracted actions undertaken.
EcoTender demonstrated that multi-outcome tenders offer significant advantages over single-outcome tenders, provided there was sufficient scientific and modelling capability to reliably inform the process.
EcoTender made it possible to achieve better and more cost-effective outcomes than would be possible under either a single-outcome auction approach, or a number of single-outcome auctions (i.e. separate tenders for salinity, biodiversity, water quality and carbon services associated with native vegetation).
The tender process also created an incentive for landholders to reveal the true cost to them in undertaking the actions in their bids. Much of this information was not previously available to policy and program managers.
The EcoTender pilot project generated proposals covering 84 sites on a total of 40 farms. Of these bids, 46% proposed revegetation and 72% were assessed as benefiting two or more different environmental outcomes. In addition to providing biodiversity conservation benefits, 72% of proposals provided an aquatic function benefit, while 8 per cent demonstrated salinity benefits.
Ultimately, 31 bids were successful, (62% of total), and 97% of the accepted bids demonstrated two or more environmental outcomes. Funded projects will deliver 259 hectares of protected native vegetation (revegetation 76 hectares, management of extant native vegetation 183 hectares), and sequestration of an estimated 10,078 tonnes of carbon.
The EcoTender pilot also demonstrated that a price for carbon offsets can substantially reduce the cost to government of achieving other environmental outcomes including terrestrial biodiversity, aquatic function and saline land. In the initial pilot, a price of $12 per tonne of carbon sequestered was offered to land managers. Results indicated that the cost to government to procure the same amount of environmental outcomes without a price for carbon would be 26% higher. |