Market-Based Instrument approaches to implementing priority revegetation in the South Australian Murray-Darling Basin

CSIRO advises that the information contained in this publication comprises general statements based on scientific research. The reader is advised and needs to be aware that such information may be incomplete or unable to be used in any specific situation. No reliance or actions must therefore be made on that information without seeking prior expert professional, scientific and technical advice. To the extent permitted by law, CSIRO (including its employees and consultants) excludes all liability to any person for any consequences, including but not limited to all losses, damages, costs, expenses and any other compensation, arising directly or indirectly from using this publication (in part or in whole) and any information or material contained in it. Description: Old man saltbush plantation near Waikerie. Saltbush is an economic way of returning deep rooted perennial vegetation to the landscape which has salinity and wind erosion benefits. Executive Summary Natural resource management targets have been specified for river salinity, biodiversity conservation, and wind erosion mitigation in the South Australian Murray-Darling Basin (INRM Group 2003a,b,c). The revegetation of cleared, privately owned agricultural land with deep rooted perennials has been widely promoted as one approach to satisfy the resource condition targets. Current estimates indicate the scale of revegetation necessary to meet the targets is extensive and associated with high establishment and opportunity costs, largely borne by private landholders. Market based instruments are increasingly being endorsed as cost effective policy instruments to address natural resource management targets in Australia. In response to this policy trend, the SA MDB Integrated Natural Resource Management Group has initiated this research to investigate the potential role of market based approaches in meeting the regional resource condition targets. Despite recent improvements in the analysis of market based instrument performance, simple rules and evaluation protocols to identify a priori the relative advantages over other policy instruments have not yet emerged. In this report we evaluate the potential of three classes of market based instruments to motivate private revegetation of deep-rooted perennials of sufficient scale to achieve resource condition targets in the SA Murray-Darling Basin. We describe a typology of both non-market and market based instruments and evaluate them against an extended set of performance criteria. The review both underpins later analytical results and provides policy decision support, highlighting the diversity of market based instruments, the need for careful design and evaluation, and the current trend of designing instrument blends for complex environmental …