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Up-front costs
On-going maintenance payments( if required) or other public costs requested in the timeperiod for the benefits to be maintained
Agreed discount rate to be applied to the time-period under consideration for the incentive
Whether there is an upper threshold limit for costs to be provided and if so what this is. In theory the upper limit is not important( provided the benefit threshold is met and the project is the best in terms of benefit / cost comparison) but in practice there are often reasons for setting a threshold( e. g. political considerations, perceptions of equity and opportunity for participation, reduced risk).
Landholder obligations � �
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Minimum practice standards below which an incentive would not be offered
Binding agreement which extend in time beyond the current landholder ownership or leasehold arrangements to maintain the public benefits in the long term and include clearly documented expectations about the landholder’ s obligations as a condition of accepting incentive payments. This includes agreement regarding compliance monitoring and inspection.
Natural Decisions have developed a riparian benefit: cost score calculator which is being used in Victoria to provide a more defensible basis for riparian incentives. Such a calculator could be developed / adapted to provide a more robust basis for the LDC project to assess erosion projects. The calculator is a spreadsheet tool with a user manual and has been well-tested for practicality and useability.
A. 4
Conclusions
Incentive payments to landholders appear sound to consider for practices that have sufficiently high public benefits, are technically feasible to address, and have a threshold of estimated sediment load reduction per public cost( which considers both upfront and maintenance or other costs required to maintain the benefits over the time period of the incentive).
Other things being equal, practices having upfront costs that are small or at least not excessive and where landholders can be reasonably expected to maintain the benefits at little or no cost are the practices where direct financial incentives to landholders will work well.
It is proposed that receiving significant levels of incentives( a threshold would need to be agreed) should also come with binding responsibilities which extend in time beyond the current landholder ownership or leasehold arrangements to maintain the public benefits in the long term. Clearly documented expectations about the landholder’ s obligations as a condition of accepting incentive payments are also required as part of a binding agreement along with landholder agreement for compliance monitoring and inspections.
Where it is unreasonable to expect landholders to be able to maintain benefits following an initial incentive( from a cost or technical feasibility point of view), direct financial incentives to landholders may not be practical or realistic. In such cases a more innovative conservation
62 | Landholders driving change: Exploring new incentives