Uncertainty, monitoring, and the design of conservation contracts for farmland in Western Australia

Bronwyn Crowe

    Research output: ThesisDoctoral Thesis

    306 Downloads (Pure)


    [Truncated abstract] Major conservation programs of the Australian government provided A$4.8 billion towards work on private agricultural land between 1990 and 2009, with another A$2.25 billion planned for 2009 to 2014 (Kingwell et al. 2008). There has been concern that environmental outcomes achieved by the previous suite of conservation programs were not substantial. Criticisms include poor selection of projects, poor selection of policy mechanisms, poor project design, and a lack of monitoring and enforcement. This study addresses the last of these issues, which is judged to be a relative gap in the existing research literature. The analysis considers cases where landholders receive payments from a program to undertake conservation works. Monitoring assists the conservation organisation to improve subsequent decision making, as well as enabling them to ensure compliance with existing contracts. Without sufficient monitoring and enforcement, there is an increased risk that some landholders could receive payments without fully undertaking the agreed works. The conservation organisation is faced with a number of choices about how to design monitoring and enforcement strategies that will potentially alter the program's cost-efficiency and environmental effectiveness. Specifically, the conservation organisation must determine whether to base the payment mechanism on the landholder's actions (payment for actions) or the environmental outcomes realised as a result of those actions (payment for outcomes). Next, they must decide on various details of the payment: its timing, the amount, and the level of action or outcomes required to qualify for payment. Finally, they must select the level of investment in monitoring, taking account of the trade-off between cost and accuracy of that monitoring. This research attempts to provide insights into these questions, using a combination of theoretical models and a case study region in the wheatbelt of Western Australia. Firstly, a survey of landholders in the case-study region explores their costs, motivations and participation in conservation programs. The effect of the landholders' management actions on the condition of native vegetation was estimated using aerial imagery. The conservation organisation’s optimal investment in payment-for-actions and payment-for-outcomes contracts was determined using partially observable Markov-chain decision process analysis. The optimal payment amount, required actions or outcomes, and outcome of the contract was analysed using a principal-agent model. The analysis examined a hypothetical perfect monitoring process, a relatively accurate but expensive field monitoring process, and a cheap but inaccurate remote monitoring process...
    Original languageEnglish
    QualificationDoctor of Philosophy
    Publication statusUnpublished - 2010


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