What incentive mechanisms are available for NRM change?
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Queensland's regional NRM bodies can use incentives to encourage landholders to engage in beneficial environmental practices. Incentive mechanisms have the potential to achieve NRM outcomes more efficiently than some of the more traditional policies and laws.
While there are some downsides, the perceived benefits of incentive mechanisms over other mechanisms include:
- incentives can be more cost-effective
- incentives are less prescriptive, offering landholders greater flexibility
- incentives encourage more diverse and innovative responses
- incentives can deliver continued improvements over time.
Which incentives can you implement directly?
Regional NRM bodies in Queensland can directly implement the following incentive mechanisms:
Grants
Grants are funds allocated to carry out a specified action. A devolved grant is when one body gives funds to another smaller body to run its own grants scheme. Applicants may state the cost of their project when applying or the grant may be a fixed sum.
Subsidies
Subsidies are payments made to reduce the cost of environmentally beneficial goods or services. For example, an NRM body may subsidise the cost of fencing a private property to exclude feral animals.
Stewardship payments
Stewardship payments are payments made to a landholder for carrying out actions that maintain environmental values or improve environmental outcomes on their property. Payment is based on the landholder providing a public service, beyond the 'duty of care'. Stewardship payments can be allocated through auctions and tenders (see below).
Auctions and competitive tenders
With auctions and tenders, landholders submit bids to undertake environmentally beneficial activities on their property for a nominated price. Examples of desired outcomes (the 'product' being bought and sold) are improved water quality and biodiversity. Winning bids are the ones that offer the best ecological value for money.
Negotiated outcomes
A negotiated outcome approach can be useful for achieving landscape outcomes. A variety of incentive mechanisms are used, matching each landholder to the incentive that suits their needs. An Indigenous land use agreement is an example of a negotiated outcome.
Suasive instruments
Suasive instruments are aimed at changing people's environmental perceptions and priorities. They include education, training, providing information, and social recognition. The FarmBis program is an example of a suasive instrument.
Which incentives can you implement indirectly?
Regional NRM bodies in Queensland can work with other groups, such as local governments, who have the legal authority to implement the incentives listed below. For advice on applying indirect incentives, refer also to the fact sheet, How do you develop effective partnerships in regional NRM?
Rate rebates and tax concessions
A local government can encourage environmentally beneficial activities by offering rate rebates to landholders. State governments can offer tax concessions such as land tax rebates for conservation covenants. The Australian Government can offer income tax deductions, for example, for donations of land to conservation groups.
Cap and trade schemes
Cap and trade schemes can be used to control pollution or resource use. For example, emission trading is a cap and trade scheme that provides economic incentives for achieving reductions in the emissions of pollutants.
Offset schemes
Offset schemes encourage landholders to counterbalance any polluting or degrading activities by engaging in environmentally beneficial activities.
Voluntary conservation covenants and agreements
Conservation covenants are legally binding agreements between a statutory authority and a landholder who agrees to improve their NRM practices. A covenant can last for a specified length of time or can be attached to the title of the land, binding future landholders.
Useful resources
For more detailed explanations and examples of the direct and indirect incentives listed above, access the following reports:
- SE05 Round 1 Market Based Instruments Pilot Programs - Overview and Implications for Regional NRM Groups in Queensland
- Choosing between incentive mechanisms for natural resource management: a practical guide for regional NRM bodies in Queensland
- The Queensland Government's NRM Incentives Database is a fully searchable database of available incentives
Related topics
- How do you choose the right market-based incentive?
- How do you design a competitive tender?
- How do you design metrics?
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Last updated 05 January 2009