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Catchment Care Tender TrialCatchment Care Tender TrialAn Auction Process for Biodiversity and An Auction Process for Biodiversity and

Water Quality GainsWater Quality Gains

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Aims

• To develop and trial an auction system for distributing funds for on-ground NRM actions by landholders in the Onkaparinga Catchment.

• To broaden the focus to consider areas of catchment as well as riparian environments.

• To compare the cost-effectiveness on an auction system versus existing programs (WMAP).

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Catchment Care Tender Trial features

• The trial aims to deliver ‘best value for money’ by buying priority watercourse protection/rehabilitation, and biodiversity protection actions from the lowest bidders.

• Objective was for greater efficiency and effectiveness in the investment to achieve catchment Health (water quality and biodiversity) outcomes.

• The Board identifies the type of environmental services it wants to “buy”, while landholders then offer to “sell” these environmental services to the Board. In so doing, the Board creates a marketwithin which landholders offer to “sell” their environmental services.

• Through the Auction process, landholders communicate to the Board what they think is a fair price to pay for their management actions to protect or rehabilitate watercourses, and biodiversity assets.

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Catchment Care Risk Analysis Framework

Two fundamental characteristics of each site are scored in the risk analysis framework:1. Environmental Values

2. Threats

Risk Score = Value x Threat

– Sites with high environmental value and high threats are at highest risk

– Sites with the lowest risk are those with low environmental value and subject to little or no threat

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Catchment Care Risk Analysis Framework

• Landholders propose actions to reduce threats– Stock Exclusion, Non-Engineered Structures, Revegetation, Dam

Modification, and Weed Eradication– e.g. fencing off a stream bank from cattle can reduce the bank erosion

threat

• Impact Score = Risk Score x Threat Reduction– Equals risk score x threat reduction achieved by landholder actions

– Measure of both the effectiveness of landholder actions in reducing threat and the inherent risk of the site

• Environmental Benefits (EB) = Impact Score x Area– Measure of impact of landholder actions and their magnitude (area over

which they occur)

• Cost Effectiveness (EB/$) = Environmental Benefits / Bid Price– Bids are ranked and selected for funding in order of cost effectiveness

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Catchment Care Risk Analysis Framework

GEOMORPHOLOGY wgeo

ENVIRONMENTALVALUES

wbank

Weed Eradication

Non-engineeredStructures

StockExclusion

THREATS

RISK

BEDINSTABILITY

LANDHOLDER ACTIONS

HYDROLOGY

wbed

RISK

Weights

BANKINSTABILITY

StockExclusion

Weights

Revegetation

DAMS andOFFTAKES

DamModification

PATCH SIZE

INVASIVE WEEDPRESENCE

WEED % COVER

REMNANT VEGETATION

Remnant Vegetation Conservation Significance (wsig)

Remnant VegetationCondition (wcond)

Landscape Connectivity (wland)

wdams

GRAZINGPRESSURE

wpsize

w%cover

wwpres

wgraz

Revegetation

whydro

wveg

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Promotion and Expression of Interest Period

• 220 landholders contacted by direct mail out.• Advertisements placed in local newspapers.• 52 landholders

contacted the Board over the 7 week EOI period.

• Information packs were sent to 42 landholders.

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Site Assessment - 1

• Field officers completed 42 site visits over a six week period.• Site visits involved meeting with landholder to discuss pilot

and record project site environmental values and threats

Character Value Threat Geomorphology Rarity of the stream type in the Board’s

area and it’s importance to riverine ecological processes

Stream bank erosion and bed erosion and sedimentation.

Hydrology Degree of hydrological disturbance when measured against pre-dam development conditions.

Existence and operation of on stream dams and off takes.

Remnant vegetation

Conservation significance and condition of vegetation associations (not individual species) and connection with surrounding landscape

Size of “patch”, type of weeds and % cover, grazing pressure.

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Site Assessment - 2

• Field officer develops a broad action plan in consultation with the landholder and notes location of recommended actions on aerial photograph of property.

• Landholder is provided with a copy of the recommended actions and aerial photograph and is responsible for compiling the Site Action Plan, complete with funds required.

• Board provided further assistance and supporting material to help landholder develop their bid.

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Bid Development and submission

29 bids were received

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Bid Selection and Contracting

• Need to select the most cost effective bids up to the funding limit that maximise the environmental benefit for the funds

• Calculate cost effectiveness as environmental benefits per dollar– Cost effectiveness = EBtotal / Cost

The 22 bids with the highest rank are funded, as they offer best environmental benefits per dollar

$166,100$5,30072226

$160,800$3,6008925

$157,200$4,000123524

$153,200$3,300151223

$149,900$1,200185122

$148,700$4,70021521

.....

.....

$5,800$4,10033162

$1,700$1,70038431

Cumulative Cost

Financial Support Request

Cost Effectiveness

(EB/$)

Tender ID

Number

Cumulative No. of Bids

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Successful bidsActions

MBI No. Weed Control

Stock exclusion

Reveg. Exotic Tree Control

Dam Mod. Bed erosion control

Bank erosion control

Project cost

MBI-003 a r r r r r r $2,340

MBI-005 a r a a r r r $11,400

MBI-006 a a a a r r r $7,675

MBI-009 a r r a r r r $495

MBI-012 a a a r a r r $19,900

MBI-016 a r a r r r r $2,219.80

MBI-017 a r r a r r r $1,348.75

MBI-018 a r a r r r r $19,730

MBI-022 a r a r r r r $3,760 MBI-025 r a a r r r r $12,515

MBI-026 r a a r r r r $6,690

MBI-027 a r r a r r r $5,000

MBI-030 a a r a r r r $15,400

MBI-031 a a a r r r r $3,940

MBI-032 a a a r r r r $9,240

MBI-034 a r r a r r a $11,575

MBI-040 a r a a r r r $6,049 SUBTOTAL 15 7 11 8 1 0 1 $139,277.60

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Bid Selection

Environmental Beneifts per Dollar

0

500

1,000

1,500

2,000

2,500

3,000

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29

Tender Rank

EB

/$

• Bids were ranked by determining which offer the greatest number of Environmental Benefit units per dollar (EB/$)

Highest EB/$ = 2,700

Lowest EB/$ = 1

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In summary…………

• 17 bids accepted totalling $139,278, ranging from $495 to $19,730.

• On this basis of historical comparison, and simulations run by CSIRO, MBI has achieved a 25% improvement in efficiency when compared to the Boards Current WMAP.

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Some Lessons/ Issues

• Threat Reduction component of algorithm is really a best guess, and based on promised actions (doubt about actual margin of change).

• Some actions which could be considered DOC, have been funded through this process; may blunt effectiveness of coercive measures.

• Some participants had relatively low levels of familiarity with some management actions (techniques).

• There is some doubt that custodians will actually achieve what they set out in their bid.

• Good intentions are not likely to translate to optimal outcomes without significant input/back up from the Board.

• Need to be more prescriptive when recommending a plan of action for landholders.