On 2 December 2005 Australian Government Ministers on behalf of the Natural Resource Management Ministerial Council announced that up to $5 million in extra funding will be provided by Australian, State and Territory governments for round two of the National Market Based Instruments Pilot Programme.
At the 24 November 2006 meeting of the Natural Resource Management Ministerial Council it was agreed that the following nine projects would be funded under Round 2.
Round 2 National Market Based Instruments Pilot Programme projects
| Auctions and beyond: Enhancing the cost-effectiveness of the Catchment Care Programme |
| Lead Organisations: |
Onkaparinga Catchment Water Management Authority and CSIRO Land and Water. |
| National Action Plan Region: |
Mt Lofty-Kangaroo Island-Northern Agricultural District, SA |
| Project description: |
This project aims to improve the cost-effectiveness of the Round One Pilot - Catchment Care: Developing an Auction Process for Biodiversity and Water Quality Gains - through:
- enhanced measurement of environmental benefits and
- the use of an improved bid selection algorithm that incorporates biophysical synergies and landholder bids.
The pilot will consider a number of auction design alternatives such as one price versus price discrimination formats and participation incentives. |
| Targeting Environmental Flow Sourcing for Salinity Benefits |
| Lead Organisations: |
CSIRO, Goulburn Murray Water and the Victorian Department of Sustainability and Environment. |
| National Action Plan Region: |
Lower Murray, Vic |
| Project description: |
This project aims to develop a mechanism that will source water to improve river salinity and improve infrastructure reconfiguration. It will test alternative auction structures that might be used to integrate the different demands placed on irrigators. It will test alternatives to encourage high rates of participation. |
| Design Auctions with Outcome Bonuses: An Application to Ground Nesting Birds in the Murray Catchment |
| Lead Organisations: |
CSIRO and the Murray Catchment |
| National Action Plan Region: |
Murray, NSW |
| Project description: |
This project aims to improve contract design for conservation contracts auctioned to private landholders. In particular, it proposes to test alternative input-based and outcome-based contracts. |
| Multiple Environmental Instruments: Offsets with Auctions |
| Lead Organisation: |
Victorian Department of Primary Industries |
| National Action Plan Region: |
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| Project description: |
This project aims to develop a process to design and refine offsets markets. The pilot proposes to use experimental economics to test and refine various elements needed to operate a successful offset market. It will examine the use of auctions to organise landholders on the supply side of the offset market and explore how developers (buyers of offsets) interact in a formal offset market.
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| Auction for Landscape Recovery under Uncertainty |
| Lead Organisation: |
University of Western Australia |
| National Action Plan Region: |
Avon, WA |
| Project description: |
This project aims to build on the results achieved from the Round One pilot (Auction for Landscape Recovery) by:
- exploring improvements that might be made to auction and contract design particularly in the light of uncertain outcomes;
- exploring alternative ways of ranking contracts received in an auction to better reflect uncertainty and incomplete information available about species persistence;
- improving the way contracts are monitored in situation where the actions of landholders are difficult to observe.
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| Optimising the Efficiency of Conservation Tenders under Varying Degrees of Heterogeneity |
| Lead Organisation: |
University of Central Queensland |
| National Action Plan Region: |
Burdekin-Fitzroy, Qld |
| Project description: |
This project aims to explore alternative ways of improving participation rates in an auction. The pilot will examine the tradeoffs associated with:
- broadening the scope of a natural resource management programme (therefore attracting more participation) and
- sharpening the natural resource management focus (reduced participation).
The pilot will also develop a diverse set of market based instruments for implementation in the Burdekin dry tropics area. |
| Improving Water Quality Discharge from the Lockyer Creek |
| Lead Organisations: |
Griffith University; Queensland Department of Natural Resources, Mines and Water; Queensland Environmental Protection Agency; Morton Bay Waterways and Catchment Partnership and South East Queensland Catchments Incorporated. |
| National Action Plan Region: |
Lockyer-Burnett-Mary, Qld |
| Project description: |
This project aims to explore the ways market based instruments could be used to improve the quality of water entering the Lockyer Creek catchment. This is important, as the suspended solids and associated nitrogen and phosphorus exiting the catchment significantly impact on the water quality of Moreton Bay, the cost of treating water for Brisbane’s urban use at the Mt Crosby treatment plant and the potential use of Brisbane’s grey water for irrigation in the catchment. The project will complement other projects in the wider catchment. |
| Issues of Enforcement and Regulation in the Application of Market Based Instruments |
| Lead Organisations: |
Griffith University; Queensland Department of Natural Resources, Mines and Water; Queensland Environmental Protection Agency; Morton Bay Waterways and Catchment Partnership and South East Queensland Catchments Incorporated. |
| National Action Plan Region: |
Lockyer-Burnett-Mary, Qld |
| Project description: |
This project aims to explore enforcement and regulation strategies that agencies can employ to improve compliance in water quality point and diffuse trading schemes. For point sources, evidence to date suggests that the price of permits in the market, rather than the characteristics of the firm, determine its compliance choices, which has important implications for how these programmes should be enforces. The focus of this project is to evaluate enforcement and regulation strategies in point-source trading programmes. |
