Australian environmental policies need a major rethink: Part 2

Published 20140909

A previous post argued that despite the raft of government environmental policies over the past thirty years, despite over 100 million hectares of farm land being transferred to environmental conservation, and despite the millions of trees planted on farms over the same timeframe, environmental scientists and environmental groups claim that the Australian environment continues to be degraded. They variously claim that species loss is continuing and perhaps increasing, land degradation is endemic, and native vegetation is being destroyed. Given this, is there is clearly a need to implement different policies, so what might those policies look like?

The starting point in developing new policies to address the future management of the Australian environment must surely be the need to have clear objectives in mind, and processes in place to measure performance in achieving that objective. Agreeing on an overall objective is clearly not a simple process, but surely it is time to recognise that an objective that seeks restoration of the Australian environment to a pre-1788 state is utopian, unrealistic, and unachievable. A much more realistic objective would be to implement policies that seek to optimise the future productive capacity of Australia’s natural resource base, acknowledging the need to consider economic, social and environmental impacts, and recognising that the environment is dynamic and constantly changing. 

Being clear on objectives and agreeing on appropriate indicators is a good starting point, but when it comes to future legislative or regulatory measures, some home truths are very evident. The first is that neither the Australian nor state governments have any appetite to lock up even more land for conservation, and nor are they willing to pay for its maintenance. This means that the role of private landholders, and especially farmers, will be critical to any future improved environmental outcomes. The second, and related home truth is that implementing a regime of regulatory controls over private land that impose all of the costs of public good conservation outcomes on farmers will never result in improved environmental outcomes. In fact, all it will do is seriously alienate the very group that the community will increasingly rely on in order to achieve improved environmental outcomes.

Ultimately, the Australian community will need to understand that improvements in public-good environmental outcomes on private land impose a cost on the owner of that land, and that at the very least that cost for the landholder will have to be shared, if not fully recompensed. Those who counterclaim that Australian farmers should expect to bear this cost as part of their ownership responsibilities might like to reflect on the fact, firstly, that Australian farmers receive virtually the lowest levels of government subsidies of any farmers globally (as again confirmed by the OECD just three days ago), and secondly, that continuing to impose increasingly restrictive controls over landuse on farms will impede both farm productivity and environmental outcomes, will be increasingly unenforceable, and will also ratchet up the administrative and regulatory costs.

The alternative approaches that have been adopted by governments internationally focus on creating long-term ‘markets’ for the provision of  environmental services by private landholders. These models create real financial value for landholders who deliver environmental services, while at the same time force governments and the community to make decisions about the trade-off between preserving the environment and using the land for other productive purposes. While there has been some trials of these models in Australia, inevitably they have been short-lived and ad hoc in their approach, and have delivered quite limited benefits. They have also suffered due to scientists and administrators seeking perfection, rather than being pragmatic and refining programs over time.

Taking all this into consideration, how might such a model operate in relation to issues such as native vegetation and threatened species conservation, which are two of the most contentious environmental issues that have impacted on landholders in Australia over the past two decades?

A pragmatic approach could be to develop targets for the amount of land that needs to be reserved purely to maintain the sustainability of farm land at a bioregional level. This would, in effect, determine the minimum proportion of land that each farmer owns which they would be required to prudently retain in a largely natural state in order to maintain the sustainability of their land (the private benefit component). 

Within that constraint, farmers would then be free to manage their own land optimally, identifying those areas they believe are best suited for conservation, and those areas best suited to production, and changing these over time as situations dictate. In effect, this requirement would reflect existing obligations under legislation such as the Soil Conservation Act, as well as obligations to manage pests and weeds, but would do away with current restrictions imposed by native vegetation and threatened species legislation on privately-owned farmland. 

Landholders with insufficient areas set aside for conservation, or who did not wish to set aside some of their own land should, over time, be able or eventually required to purchase or lease extra areas of conservation land, owned by other landholders in that region, in order to meet their minimum requirements. Under such arrangements, existing areas of land currently under native vegetation and not used for farming would gain value, restoring equity between farmers who have conservatively managed their land, and those who have cleared ‘fence-to-fence’. Under such a model in Brazil, land retained for conservation purposes sells for virtually the same value as farming land.

While a desire for simplicity suggests that using a measure like the proportion of land in conservation as a standard requirement is a preferred option, better outcomes could be achieved using an environmental benefits index or biodiversity points system. This would increase the value of areas of conservation land that have higher biodiversity or conservation values. This might mean, for example, that a landholder who owns an area of conservation land with higher biodiversity values gains some discount on the proportion of total land owned that is required to be retained for conservation. The key requirement for any scoring system such as this is that the system is transparent and robust, with independent third party assessment processes based on published guidelines. 

In the USA, the Conservation Reserve Program has operated using an Environmental Benefits Index for more than thirty years. The Victorian Government has developed the concept of ‘habitat hectares‘ using such a system, the result being that an area of high conservation land is credited with more habitat hectares than the same area of land that does not have high conservation value.

Critics of such a system might claim that freeing up farmers to manage which areas of land they retain in conservation and which areas they use for farming on their farm would create the potential that current habitat for threatened species might be destroyed. A biodiversity rating system for conservation land would obviously curtail this to a large degree, as land containing habitat for threatened species would gain a high ranking on any environmental scoring system, and hence that land would be of much more value to the landholder if it was retained for conservation, rather than used for farming.

The option also exists that Governments could retain the right to restrict private landuse for the purposes of conservation of threatened species, but only on the basis that the government enters into a long-term conservation agreement with the landholder under mutually agreeable funding arrangements. This is the approach used under the Conservation Reserve Program operated by the US Government.

Making changes such as are proposed here would require a pragmatic approach by both governments and landholders, and ideally a staged implementation so that lessons could be learnt and progressively incorporated. 

Critics will undoubtedly claim it gives too much freedom to farmers, and places at risk the changes that have been made over the past twenty years. Yet the fact remains that despite almost 100 million hectares ( 20%) of Australian agricultural land being converted from agricultural to conservation use over the last thirty years, and despite the heavy-handed and cumbersome regulatory arrangements under current biodiversity legislation, experts and conservation groups still claim that species are becoming extinct and the environment is suffering. If this is correct, then to argue for a continuation of these existing regulations in the expectation of a different outcome surely meets the definition of insanity.

Policy settings that create a long-term market for conservation services and place real financial value on the environmental outcomes achieved by landholders, while at the same time addressing the inherent inequity of current policies, seem to be a much more logical and effective way to address these issues. 

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