A policy analysis of market-based mechanisms to effect natural resource management in the SW region of WA

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• A policy analysis of market-based mechanisms to
  effect natural resource management in the SW
  region of WA
• A case study of emissions trading of carbon
  offsets

Helen Allison Frank Murray Richard Hobbs
School of Environmental Science
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Outline

• The problem
• Research question
• Hypotheses
• Synergy solutions
• Integrating resilience theory the adaptive
  cycle SD
• Modeling methods
• Model boundary chart
• Reference modes
• Causal loop diagrams
• How do I.?

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The crux of the problem

• Be careful with practices like mitigation and
  carbon markets, which are equilibrium solutions
  (in a non-equilibrium world) and which usually
  rebound to the detriment of the natural
  environment.
• A major challenge is to protect and conserve the
  natural environment in spite of the political/
  economic power status quo, not to implement
  policies within the framework of, and
  reconfirming, that status quo.
• Pers. Comm. Kenyon De Green 2001

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Extent of land clearing in the south west region
of Western Australia
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• The problem
• Past policies have caused present resource
  degradation
• Complex interactions are acknowledged between
  physical, biological, economic and social
  processes
• However, proposed policies are based on resource
  accounting, benefit-cost analysis market-based
  mechanisms

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Salinity development - the future
Risk for shallow groundwater for SW region in 2030
Perth
RISK High Medium Low risk
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Synergy Natural resource restoration climate
change
CHO
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Potential carbon sink activitiesTradeoff
between high water use,yield, and carbon

• Prevention of further clearing
• Perennial plant species e.g. Lucerne
• Farm forestry
• Commercial plantation
• Conservation planting
• Soil carbon

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Research question

• How can industrys need to offset carbon dioxide
  emissions be linked to agricultures need to
  address the multiple objectives of economic
  viability and natural resource management?
• Example objectives
• Mitigating salinity
• Improving water quality
• Maintaining biodiversity

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Hypotheses

• Natural resource degradation in the south west
  region of Western Australia has been caused by
  policy resistance
• Policy resistance in natural resource management
  is the result of systemic causes including
  Government policy intervention, economic growth
  as the primary objective and differences in fast
  and slow moving variables
• There is a lack of understanding of the feedback
  loops between the social, ecological and economic
  systems
• Market-based mechanisms are economic equilibrium
  solutions that will produce unintended effects
  in a non-equilibrium system
• The management of long term natural resource
  problems requires overarching value laden policy
  goals

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Integrating system approaches

• System dynamics
• Complex adaptive system theories
• Resilience ideology theory
• Understanding the characteristics of the
  interactions between human and natural systems

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Model boundary chart
Endogenous Exogenous Excluded
Farm profit National economy Interest rates Natural resource condition Area of revegetation Forestry policy NRM policy Farmer numbers and age Intergenerational transfer Technology Infrastructure Rainfall Commodity prices Terms of trade Price of carbon credits Climate change policy Global economy
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Reference modes ofagriculture in WA1889-2002

• Land use change
• Land clearing and forestry establishment
• Structure and social change
• Farmer median age and farmer numbers
• Economic
• Terms of trade
• Natural resource condition
• Area affected by salinity

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Time horizons of area cleared and forestry in the
WA
Plantations Australia policy objective
Year
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Time horizons of median age and numbers of
farmers in Australia
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Farmer terms of trade and natural resources
Farmer terms of trade The ratio of the index of
prices received by farmers to the index of prices
paid by farmers. Reference year 1997/1998 100
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Internal oscillation with information delay
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Exponential decay of natural resources
100
60
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Salinity and revegetation causal loop
diagram Negative loop showing the goal and delays
?
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Causal loop diagram
?
?
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How do I?

• The rule of hand - which are the driving
  variables?
• Scale - How to deal with hierarchies?
• Qualitative values - how to deal with values and
  attitudes?
• when there are 2 or more qualitative values
• 0.5 x 0.5 0.25
• Aggregation - data rich/data poor

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Concluding remarks
Climate change and natural resource degradation
are serious problems for Western
Australia Revegetation programs could in theory
absorb carbon dioxide and improve groundwater use
and reduce the rate of salinity increase Rate of
revegetation is dependant on social,
environmental and economic variables
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Contact details
Helen Allison Environmental Science Murdoch
University PERTH, Western Australia 6009 Australia
Emailhallison_at_central.murdoch.edu.au Tel (0)8
9360 6389
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Stocks

Area cleared Ecosystem services
Area affected by salinity
Area planted to trees
Numbers of farmers in age groups- (lt35), (35 - 55), (gt55) Infrastructure
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Decision framework

1. Structural adjustment - bigger farm
2. Management change - best management practice
3. Diversification - commodity range
4. Commodity change -price chasing
5. Land use change

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Eight stages of decision making

1. Anticipation of degradation
2. Seeing degradation
3. Seeking information
4. Weighing the alternatives and risks
5. Making a decision
6. Undertaking a trial
7. Making a change
8. Reaffirming the decision

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The adaptive cycle
Source C.S. Holling (1993)
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Adaptive cycle 3 dimensions
Source Gunderson Holling 2002
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Panarchy
Source Gunderson Holling 2002
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Panarchy in a catchment
Showing how different sub-catchments can be in
different phases of the adaptive cycle
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Interpretation of the adaptive cycle
? Reorganisation Potential high Connectedness low Resilience high ? Uncertainty high Diversity maintained K Conservation Potential high Connectedness high Resilience low Uncertainty low Endogenous strong feedback, lock-in, increasing returns greater returns for increasing efficiency and rigidity
r Exploitation Potential low Connectedness low Resilience high Uncertainty high Exogenous driven because of low connectivity ? Release Potential low Connectedness high Resilience low Connection start to become broken Feedback weakens