Apx Table C. 1: Key Strengths and challenges of extension / suasion / social recognition style incentives
Strengths
� Non-invasive � Informative � Low cost to administer
� Can be used as a stepping off point for engagement and information collection for other more targeted incentive schemes such as grants, subsidies and competitive payments
Challenges
� Likely to only generate small and slow change unless applied in conjunction with regulation or a financial incentive
� Requires landholders to engage voluntarily( so unlikely to attract those that have no history of engagement)
� Start / stop nature could create frustration and disadoption
� Action stops when extension stops so limited application for long term outcomes
C. 1.2
Brokering
Brokering is an incentive mechanism that seeks to lubricate / assist a current market operate better for the environmental outcome. A broker operates within an existing market to reduce the transaction costs of exchange and thereby facilitate more / better environmental transactions. Water brokers in Australia and the United States, government operating as a broker in the Pinelands tradeable development right market in the U. S as well as the Australian BushBroker, BioBanking and EcoFund vegetation offset schemes are all examples of where a broker has emerged or been introduced to reduce the transaction costs of using an existing market for an environmental outcome( Coggan, Buitelaar, Whitten, & Bennett, 2013).
Apx Table C. 2 Key Strengths and challenges of brokering as an incentive
Strengths
� When the markets exist, low cost to implement
� When a market exists, facilitates resources flowing to their highest value use and subsequent efficiencies
Challenges
� Relies on the existence of a market with defined property rights, buyers and sellers and gains from trade.
� No markets to broker into as yet � need to define how they would broker( fee / fee-less)
� Need to assess the cost and benefits of brokering in an existing market( or sponsoring a private party to do so)
C. 1.3
Product differentiation
Another successful approach in this style of incentive has been in product differentiation. Once again, this style of incentive seeks to manipulate a current market such that it operates to send market signals to reflect the public good. A good example of this approach is Banrock Station wine which is marketed based in part on presenting the positive environmental management of Banrock Station wetlands as a consumption attribute of the wine. This is done via including statements about wetland management on wine bottles and donating to local wetland conservation projects worldwide from the purchase of each bottle of Banrock Station wine. Another successful example of market lubrication has occurred in New Zealand through Taupo Beef. In this case, beef producers in the Taupo catchment are regulated to comply with a nitrogen emission cap. In order to meet this cap and remain profitable, producers concentrate on producing a premium beef product which gains a 20-30 % premium price over retail high end beef. The premium nature of the beef profit is enhanced by environmental compliance which is
Landholders driving change: Exploring new incentives | 79