EcoTender: Auction for multiple environmental outcomes
Final report for MBI project 20
Department of Primary Industries, Victoria
M Eigenraam, L Strappazzon, N Lansdell, A Ha, C Beverly, J Todd
February 2006
PDF file
About this report
Market-based instruments (MBIs) are policy mechanisms that can be used to manage environmental problems and assets in a more cost-effective way than current prescriptive approaches, at least theoretically. The National Market-based Instruments Program has been implemented to test designs of MBIs on real environmental problems. $5 million has been allocated to the program in the first round to trial ten MBI designs across Australia. The Victorian Department of Primary Industries is leading a trial called the ‘Multiple-Outcome Auction of Land-Use Change’ or the EcoTender Pilot.
EcoTender is designed to use a BushTender style auction mechanism to encourage private landholders to manage salinity, water quality, water quantity and biodiversity on their land. The trial is designed to test the feasibility of using one mechanism to simultaneously encourage land-use change for multiple environmental purposes.
EcoTender represents a significant advance towards implementing a comprehensive market-based approach to managing environmental problems. The design of a successful pilot requires implementation of an auction mechanism that can process the information elicited from landholders to ensure cost effective use of government funds.
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